‘Cardiff reaching critical mass to compete on a global stage’
The head of one of Britain’s largest financial services firms has called for Chancellor Philip Hammond to deliver a “Budget for devolution” to help Britain’s regional cities such as Cardiff.
In a blog post, Nigel Wilson, group chief executive of Legal & General, said that with the right level of investment, Wales’ capital could compete with global cities such as Frankfurt, Boston and Munich.
Legal & General is involved in the redevelopment of Cardiff ’s Central Square district in parthership with Cardiff-based property developer Rightacres and Cardiff council.
And the FTSE 100 company is also bringing 400 new jobs to the city as part of a redployment from the Home Counties, to add to the 1,300 already employed in the capital.
In his blog post, Mr Wilson, who has been CEO of Legal & General since June 2012 and has a PhD from the Massachusetts Institute of Technology, points out that three-quarters of Britain’s population live in cities and three-quarters of jobs are located in them.
These cities, he adds, face increasing pressure from population growth and demand for housing. Cities and regions, rather than countries and national governments, are the chief drivers of economic growth, he writes.
He refers to the “stunning £400m regeneration” taking place in Cardiff city centre and adds that “[p]rojects of this scale require inspired local political leaders backed by industrial-scale investors.”
Cardiff, Mr Wilson writes, has the “necessary critical mass to flourish and can become a powerful second city, able to compete with the likes of Munich, Frankfurt and Boston.”
And he adds that capital investment is not a barrier, with the world “awash” with money as a result of years of quantitative easing and the “eight trillion dollars of global funds… invested in assets earning a negative nominal return”.
Mr Wilson, who last year received a total salary of £1.97m, said city regeneration projects provide positive long-term returns and “a decent covenant for the private sector”, particularly for long-term pension funds which do not need to worry about daily liquidity.
Projects should work in “positive, constructive collaboration” with civic authorities and leaders, he added.
“It is on this basis that Legal & General has invested in the transformation of Cardiff Central working alongside our development partner Rightacres,” he writes.
He describes Central Square, which is expected to create over 10,000 local jobs, as “one of the UK’s most impressive and transformational regeneration schemes [that] is already delivering major social and economic benefits as well as being a great match for Legal & General’s patient capital.”
The scheme demonstrates that “devolution – with local empowerment – is a powerful catalyst to further progress and prosperity”, Mr Wilson adds.
“After all, it is often the local authorities who are the custodians of the land ripe for redevelopment, and can understand the wider context, challenges and opportunities afforded by their region. They can and should ensure that regeneration delivers better results for residents.”
The 60-year-old businessman said that cities like Cardiff are becoming better at developing their own blueprints for economic growth, retaining talented graduates, encouraging start-ups, and providing an attractive environment for later-life living.
And he said that city devolution deals are “good value for the Government, financially and politically”.
“Devolution creates real winners. A decisive but modest injection of catalytic capital from government can restore and revive a local economy, deliver a vision for the region and, married with institutional capital, achieve a major multiplier effect.
“Centralisation, by contrast, too often drives resource misallocation and fosters a culture of victimhood and blame,” he writes.
The limited room for manouevre that Mr Hammond will have in the forthcoming Budget provides the Chancellor with a “perfect opportunity to announce progress on further city deals,” he adds.
> Legal & General CEO Nigel Wilson