Legal & General CEO Sees Potential to Invest $24 Billion in U.K.Kevin Crowley
Legal & General Group Plc, the biggest manager of U.K. pension assets, could invest 15 billion pounds ($24 billion) in infrastructure if the government revised its planning and energy policies, Chief Executive Officer Nigel Wilson said.
The insurer would spend the money on housing, roads, airports and shale gas projects were the government to grant developers more planning permission and commit to a long-term energy plan, Wilson said in an interview on Bloomberg Television’s The Pulse with Guy Johnson and Francine Lacqua today.
“We just happen to have not coherent policies in a lot of areas and we need to unblock those things that are blocking the growth: housing, energy, transport,” Wilson, 56, said. “The land is available, the capital is available. There just has to be the political will.”
The U.K. economy grew 0.3 percent in the first quarter, as Britain avoided a triple-dip recession following the financial crisis. While recent economic data shows the improvement, with U.K. jobless claims falling more than economists forecast in May, the country is still growing slower than it could be because of government policy, Wilson said.
“Policy at the moment is just driving up London house prices, which are ridiculously high and London rents which are ridiculously high,” he said. “We need a policy for the whole country that works.”
With 15 billion pounds, Legal & General could build 127,500 new homes, according to London-based real estate consulting firm Davis Langdon, more than the total built in the U.K. in 2011. That sum would also build 27 hospitals, based on the 545 million-pound cost of the Queen Elizabeth hospital, which opened in Birmingham in 2010.
The government’s infrastructure plan “is working” and investment has risen since 2010, when it came into power, a Treasury spokeswoman said in a statement in March.
The insurer, which has already invested 3 billion pounds in infrastructure, would spend the money on “housing, increasing energy capacity in the U.K., reducing the cost of energy to make our industries much more competitive, lots of nudging of transport infrastructure,” Wilson said.
The firm’s senior management “are strong supporters of shale gas,” he said. “You can see the very positive impact it’s having in America with gas prices making the U.S. economy much more competitive. The same can happen over here.”