CapX by Sam Richards
Britain’s a great country, but in recent years something’s felt… wrong.
It’s no coincidence that this feeling coincides with the end of a decade that has seen the slowest economic growth in Britain since the Industrial Revolution.
While much of the current squeeze on households – rising inflation, soaring energy bills and climbing interest rates – can be explained by events such as the war in Ukraine and the coronavirus pandemic, Britain’s ability to weather them has been seriously hampered by sustained poor economic growth.
It’s also why we’re slipping further and further behind our peers. The typical British family is now £6,800 worse off than a German family, £13,500 worse off than an American family, and, if we continue our current trajectory, is set to be poorer than a Polish family by the early 2030s.
We’re not the first people to point out that Britain’s economy is sclerotic. Famously, growth was a central aim of the ill-fated Truss administration.
Before that, Keir Starmer spoke of growth as a core mission of a future Labour Government. It seems there’s an emerging consensus that our poor growth is a problem, and potentially even some agreement on how best to tackle it.
It’s our view that a major factor causing Britain’s poor growth is our failure to build.
Our politics and, in particular, our planning system mean that Britain’s infrastructure, like trains, roads, housing, and power stations, is not up to scratch. This is having a major impact on our productivity and, in turn, our ability to grow. It means people and businesses face higher costs, potential agglomeration benefits are lost, and opportunities to create leading new industries are missed.
Even the things Britain does build are beset by delays and cost far more than they should. Take Crossrail – it cost £19bn to build and took 23 years. In comparison, Madrid was able to build an entire metro-system from scratch in 4 years for just £4bn – ten times less on a per mile basis than Crossrail.
We see the same happening with our energy infrastructure. The Hornsea 3 wind farm off the Norfolk coast is a good example. When finished, it will be the largest offshore wind farm in the world, generating enough electricity to power three million homes, while creating 5,000 jobs. Yet the project has been delayed four times, and isn’t set to come online till 2027, despite originally being proposed in 2016.
If we’re to reduce our reliance on foreign gas and slash bills, we need to address the bottlenecks in our planning system preventing new supply of energy from being built. It is, to give one example, utterly baffling that the Government looks set to keep the effective ban on onshore wind farms at the same time as forking out billions to cap household and business energy bills this winter.
Too often policy mistakes, like the continued ban on onshore wind, happen because politicians listen to a vocal minority of voters opposed to building. In fact, polling we’ve commissioned shows there is majority support for new wind and solar projects.
Over the last few months, we’ve been meeting with businesses and voters across the country, hearing their views on what they think has gone wrong with the British economy. Many of these people share our frustration with the state of the economy, and want Britain to get back to building again.
There is a coalition for economic growth in Britain. It just needs a voice.
That’s why we’re launching Britain Remade, a new campaign for economic growth.
The campaign will act as a broker between politicians and people who want things like reliable local transport links, affordable energy bills, and a home to call their own.
And we’ll keep talking to people across every part of the country over the next few months, while developing policy positions on areas such as energy, transport, and housing.
Britain used to be a country that used our expertise in science and engineering to build things. We built the first railways, the first coal-fired power station, and the first commercial nuclear power station. We believe we can do it again.
But it requires building a movement large enough to ensure Westminster, and other decision makers, hear the voices of those who support pro-growth policies like building new clean energy, new homes, new roads and new railways.
Let’s get back to what we’re good at– join us at Britain Remade.