Wales needs less talk and more action – L&G boss
Decision makers in Wales need more of a “doing culture” like Manchester when it comes to supporting business investment says chief executive of financial services giant Legal & General Nigel Wilson.
And Mr Wilson said it was vital that investors took a more enlightened view by backing new technologies such as renewables, as well as assets that will create real jobs.
While he said that political tribalism remains an issue in the UK, he believes that Wales needs to up its game from “talking” about economic boosting projects to delivering them. However, he said that L&G was not looking for any government handouts, but only for politicians to ensure things happened as quickly as possible from a decision-making and planning perspective.
And while not a devolved matter he said it would be difficult to justify UK Government backing for the Swansea Bay Tidal Lagoon project, which its backers plan as an effective pilot before a series of larger lagoons, because of the required high subsidy cost.
He believes that rapid advances in renewable technologies, like in wind and solar, and advances in battery storage, meant the future offered the prospect of a non-government subsidised green energy sector.
L&G employs more than 1,000 people in Cardiff, where hundreds more jobs could be created over the next few years.
And through its Regeneration Investment Organisation partnership it is backing the Central Square regeneration scheme in the centre of the capital with a £400m investment into the project which is being delivered by Rightacres.
Other potential investments are on L&G’s radar in Wales, as are potentially up to 200 projects UK-wide
Mr Wilson said that while Manchester has delivered on projects such as investment and expansion of routes at its airport, as well as attracting significant backing from investors including from China, Wales was in danger of falling behind.
Mr Wilson said: “Manchester has done a great job because they are doers. It is a doing community. Wales has been a talking community. And they have to move.”
He said that L&G, which will see the first of its new modular houses rolling off the production line at its factory in Selby, was looking to back new technologies in areas such as renewables. And it is also exploring investing in the life sciences and wellbeing sectors
Mr Wilson said; “We are getting on with stuff. We want them [government] to positively influence and we don’t need them to give us money. The world is awash with money. The government is always thinking that people are coming to us for handouts.
“We don’t want any Treasury guarantees as we are going to do it economically and guarantees have political risks associated to them.
“What matters is the people at the end of the day and it is not the money... the money is there.
“So do these people want to make things happen or are they just going to faff around and have these endless meetings? Sometimes it’s like in through the outdoor, chatter, chatter, chatter and nothing happens.”
He said that Wales and the UK could learn from the transformation of economies such as Malaysia and Singapore.
Mr Wilson added:“Go to Malaysia and it is an incredibly dynamic economy at the moment, which was based on rubber 20 to 30 years ago. And go to Singapore and it is unrecognisable for what it was.
“They have people with committed energies, drive and vision to get things done. We have had whingeing and moaning political infighting in major urban areas for 50 years.”
On tidal lagoons he said: The problem we have at the moment is that a lot of the projects that are being put forward we think are difficult in terms of being economically and socially viable.
“We are very committed to clean, green and cheap energy. But a lot of stuff we have at the moment can be clean and green, but, ultimately they are not cheap. And someone has to pay for that and it is often almost everybody in society.”
And he believes the proposed £18bn EDF-backed new nuclear power station at Hinckley Point, which will require a UK Government subsidy – based on a strike price of £92.50p per megawatt hour - couldn’t be justified.
Asked if he believes the project will proceed he said: “I hope not as it is completely and utterly a waste of money. All those projects that are in the too expensive box shouldn’t be allowed to happen. Instead we should be working on how do we use wind, solar, and ground heat. There is lots of free heat and energy available. If we bought a coffee for £1 and then here is some for £4 who would buy it? So why would you buy energy at such a ridiculously high price?”
“What we think is going to happen is that in a decade there will not be a National Grid in a recognised form, but a series of localised grids and greater battery storage. So we think there are better ways of deploying capital and getting R&D into Wales to build businesses for the future.”
Mr Wilson said that there was an imbalance in the current funding model globally, with too much of an emphasis on bank debt.
He added: “It is not about investing badly in old antiquated methods of doing things, but investing in the new and real assets that create real jobs. The world is polarising at the moment. What do the big companies like Apple, Facebook, Amazon and Microsoft have in common? They were all started by US college students and some of them didn’t finish college because they got so excited about it.
“So we [UK] need to ensure that the geeks meet the money and universities work more closely with business.
“We need to funnel equity into the world. We are obsessed with banks. We don’t need more debt in the world, we need more equity and we need more money going into startups.”