With the UK economy grappling with stagnant growth, high energy costs, and declining investment appeal, Chancellor Rachel Reeves faces mounting pressure to deliver bold solutions in tomorrow’s Spring Statement.
While long-term initiatives like planning reform and major infrastructure projects offer promise, they will take years to yield tangible results. The challenge now is finding immediate, high-impact strategies to stimulate economic activity and restore investor confidence.
From energy security and housing supply to taxation reform and capital market revitalisation, Phil Jenkins, CEO of international corporate finance firm Centrus , explores actionable policies that he believes could provide a much-needed boost to the UK’s economic trajectory—both now and in the years ahead in the following analysis:
“With the continued grim news around stagnant UK economic growth and falling living standards, Chancellor Rachel Reeves must be desperate for some economic growth rabbits to pull out of the hat at the upcoming spring statement. While planning reform and a willingness to proceed with major infrastructure projects such as the 3rd runway at Heathrow are to be welcomed, these changes will take years or even decades to translate into tangible growth and a more vibrant economy. So what could the Chancellor do to provide some more immediate defibrillation to a flat-lining UK economy?”
Energy
“UK businesses and households are suffering from energy prices which are amongst the highest in the world. This is having a crippling impact on UK manufacturing in particular and neither is it aligned with the Government’s strategy to make the UK a leader in AI and Quantum Computing, both of which require vast amounts of energy.
“The UK has a national engineering champion in the shape of Rolls Royce which is trying to carve out a niche in Small Modular Reactors. Supporting Rolls Royce with an ambitious orderbook and ensuring that planning and regulatory rules are aligned to this programme would boost the UK’s reliable, baseload energy production while creating a cluster of global energy/engineering expertise and providing a boost to UK exports. If the fiscal position necessitates, then this would provide a far better return on the £22bn of investment earmarked for Carbon Capture & Storage.”
Housing
“While the Government has ambitious targets around the delivery of 1.5m homes, there is scepticism in the market as to the ability to deliver on this ambition. Of particular importance here is the ability to deliver a significant uptick in the number of affordable homes, given the capacity constraints being experienced by the housing association sector. New models and approaches have been developed to leverage very significant volumes of institutional capital alongside Government grants, which require a fresh approach from MHCLG and HM Treasury but without the need for significantly higher volumes of overall public funding. These could facilitate a new wave of housebuilding to resolve the UK’s housing crisis.”
Taxation
“The UK is languishing near to the very bottom of the OECD tax competitiveness rankings. This makes the UK a less attractive destination for investment and wealth creation, as evidenced by the on-going exodus of high-net-worth individuals and entrepreneurs to more welcoming tax destinations. A radical simplification of the UK’s absurdly complex tax code, a clear statement of intent to reduce personal and corporate taxation over a ten year period and aggressive tax incentives to support inward investment in key industries would provide a boost to sentiment and economic confidence, even if the effects were phased.”
Capital Markets
“UK listed equity markets are dying a slow death, with intervention needed to arrest and reverse this decline. This is of vital importance given the need for investment in growth businesses and sectors. Firstly, stamp duty on transactions in UK shares should be ditched in order to remove the absurd position where it is cheaper for UK investors to trade in overseas equities than in UK shares. Secondly, where the UK Government provides tax breaks, it isn’t unreasonable for it to require that at least part of these pools of capital should be invested in domestic capital markets. This might not be welcomed by the market purists but needs must. Finally, the newly established National Wealth Fund should be bolstered by the proceeds of the sale of the remaining NatWest shares held by the Government as well as the c£4bn of Bitcoin seized from criminal activities. The NWF should then be mandated along with the Bank of England to invest in UK listed equity markets with a particular focus on a deregulated and competitive junior market, specifically aimed at high growth companies and sectors.
“Creating a Bitcoin Reserve within the NWF and removing regulatory barriers would also help the UK and the City of London to become a global leader in finance of the future such as blockchain, DeFi and digital finance, re-invigorating the City of London and ensuring that it remains a leading global financial powerhouse.”
