Keeping London at the forefront of global business
working with and for the whole UK
Jasmine Whitbread’s keynote speech at London Infrastructure Summit 2019
12 September 2019
Good morning everyone, and welcome to the London Infrastructure Summit at this fantastic new stadium.
We have a great day of speakers and sessions coming up. From the Harry Kane of the sharing economy, Jamie Heywood from Uber… to the David Ginola of London government, Tony Travers… and dozens of other premier league-quality participants.
What does the London of the future look like, ten, twenty, fifty years down the line?
It comes down to this: can we imagine it as a success?
Of course, we can.
The London of the future is connected. Not just in terms of transport but in terms of the flows of trade, data and information. It is vibrant, it is multicultural, it is unafraid. It is the world’s strongest magnet for talent.
How do we make this happen?
Infrastructure. Physical and digital.
A London with ground transport links that connect our regions.
A London with air transport links as well-developed as our fellow top-tier nations.
A London friendly to electric vehicles, with a zero-carbon transport network by 2050. Cleaner, healthier, more efficient.
A London – and a UK – where the fourth industrial revolution gets to work. 4G, 5G – even 6G.
This might sound ambitious. But if we’re serious about the UK being a twenty-first century trading nation then really it is just the baseline.
Look at our competitors and you will see clear, strategic approaches to infrastructure. In China, for example.
They are building or planning 200 additional airports around the country.
They have earmarked almost $120 billion by 2030 for an electric vehicles ecosystem.
Digitally, they have handed out spectrum free of charge. Meaning industry has more money to invest in coverage.
We must learn from that approach.
Everyone knows that we have been working with decades of underinvestment in infrastructure – even if the purse strings have been loosened slightly over the past few years.
The majority of the businesses we polled last week said the transport network is no more reliable than it was five years ago and that – for the majority – it remains an issue. About half of respondents had been impacted by traffic congestion, railway maintenance or tube delays in the last month alone.
Then there’s the compounding impact of poor digital connectivity on the move, where a mere 16% are very satisfied with the connection they get.
Hardly a recipe for success.
But we can change this picture.
London businesses are clear that moves to invest in infrastructure now – from upgrades to the Piccadilly line, through to electric vehicles and great 5G and full fibre connectivity – would boost confidence.
The National Infrastructure Commission has recommended that 1 and 1.2% of GDP annually is spent on infrastructure.
A very modest ambition. Too modest, if you ask me.
But a new report from London First and WPI shows that if we had spent even at that level since 1995, we would have invested about £80 billion more than we actually have done in our transport network.
And quite aside from the immediate impact of a smoother-running economy, investment in infrastructure brings with it a whole raft of secondary benefits for public policy.
For example, if you double the number of workers in a travel-to-work area, local productivity increases by 4%-8%.
Likewise, infrastructure projects also unlock land for development: Crossrail 2 and the Bakerloo Line extension will pave the way for 225,000 new homes.
Part of the problem is that the public and political debate is trapped in a jungle of myths that serve only to cloud judgement. And there are three that I find particularly annoying.
Myth one: investing in infrastructure is unaffordable. The biggest myth of all. And yet cost-benefit analysis consistently proves that spending on infrastructure is one of the most efficient ways to stimulate an economy.
HS2, for example, will bring over £92 billion of benefits for the UK economy. Jobs, homes, contracts for SMEs.
Crossrail, at least £42 billion.
And accelerated 5G rollout would see a £15.7 billion increase in annual business revenue by 2025.
Anyway, there are plenty of different models for paying for infrastructure.
Our report with Arcadis cautions against a crude public versus private financing debate, as it ignores the benefits of private capital, not least stable investment streams, transfer of risk and putting in place the incentives that encourage good asset management.
Myth two: it’s a zero-sum game, North versus South.
You hear this all the time with HS2 in particular: that all it does is drain talent from the North. Or a pound spent in London is a pound swiped from somewhere else.
Not true. HS2 directly benefits plans to connect Northern cities with high-speed rail … which is one of the reasons that Northern businesses and leaders are HS2’s biggest evangelists. We’ve been working with business groups in the North and the Midlands to jointly press government to commit to greater infrastructure across the UK.
Myth three: the UK can’t ‘do’ infrastructure.
We constantly run down our projects. How many times have you heard that project ‘x’ will be a disaster, or project ‘y’ is just the sort of thing that would work well somewhere else, but not here?
So yes, Crossrail has been delayed. Just like the Paris metro, Berlin airport, and countless others all over the globe. But it is still the biggest project of its kind in Europe … a game-changer for London transport. The Olympics, the London Array, the London Gateway … all amazing projects. And are more in the pipeline such as the new crossing at Silvertown and the super sewer being built by Thames Tideway. Not to mention the four London airports who have this year all brought forward ambitions expansion plans. We need to talk our capabilities up, not down … building confidence and encouraging investment.
These are all complete red herrings. We need to move beyond them. And realise that functioning, cohesive, nationwide infrastructure is probably the best way to reunite and grow a fractured country at a critical moment in its history.
So: what needs to happen?
From government, three C’s. Cash, confidence, context.
First off, cash. We’ve just had the one-year spending round, which talked of an “infrastructure revolution”. But singularly failed to make any specific commitments, which are so desperately needed.
The government must respond to National Infrastructure Commission and commit to the spending recommendations in its forthcoming infrastructure strategy. And then put this front and centre in the next medium-term spending review.
And another thing. That 1.2% target.
I said before that it was too modest. Well, why not make it the floor, not the ceiling?
The London First report shows that even miniscule percentage differences have a massive compound impact.
For example, spend 1.2% of GDP on infrastructure, rather than just 1%, and you end up with £175bn more investment by 2050.
In the same vein, any consistent underspend must be ringfenced, and allocated to regional authorities for use on local priorities.
The second thing is confidence.
The public debate around infrastructure seems designed specifically to dissuade private investment.
Reviews are springing up, decisions being delayed. Political and regulatory risk is a growing concern. And so too the lack of certainty over freedom of movement and the future status of EU citizens – our members tell us this is now the biggest obstacle in preparing for Brexit.
The knock-on effect of uncertainty is that plans for local and regional investment get pushed back too. And the chances of future investment, even decades down the line, get slimmer.
So many times, on so many subjects, I speak about London needing to do more to maintain its position at the front of the pack. But with infrastructure it’s different – we need to do all this simply to stop ourselves falling behind.
Devolving more responsibility to regional groups and local authorities will help, as business will be dealing with the people who have the most skin in the game.
So, cash and confidence. The third thing is context.
Even if the money, the willpower and the strategy is in place, we need the right people to actually build the roads, railways and networks.
These projects are hugely complicated.
Crossrail is supporting the equivalent of 55,000 full time jobs.
With 5G, it takes serious skill to install large, complex base stations on the sides of skyscrapers.
I would love the UK to supply all these skills.
But we cannot. Which means that the arbitrary salary cap should be adapted. Bring it down, to around £20,000, so technicians and construction workers can come and contribute.
And simultaneously investing in homegrown talent, reforming the apprenticeship levy in order to make it flexible enough to be practical.
Cash, confidence, context.
That’s what government needs to do.
But we too must change.
For example, making construction a more diverse industry.
I remember when I first started at London First. When I asked members what was occupying their thoughts, Diversity and Inclusion was an add-on, at best. Divorced from wider business strategy.
But over the few years it has been integrated into the mainstream. Diversity is now, rightly, seen as a determinant of success. Over a third of the speakers here today are women, miles higher than it would have been a few years ago.
Of course, we need more.
London First is increasingly putting it at the heart of all we do. We push for more diversity on boards, on guestlists, on panels. And we’re identifying how to pull all these threads together to encourage new voices and new talent into the room. New talent like the Mayor’s Young Infrastructure Professional Panel, here today.
It’s about ‘getting a grip’. Identifying a problem, and acting.
Which brings us back to infrastructure.
Other nations will keep on pushing money and effort into attracting the best new and established businesses, the best talent, the best projects.
So, we cannot afford to let up.
London First, on your behalf, will carry on convening, researching, persuading. Amplifying your voice.
And most of all, we will carry on holding the government to account – doing justice to the next generation.
Thank you. Have a great day, enjoy the sessions. And I hope to speak to as many of you as possible.
But for now, please join me in welcoming Donna-Marie Cullen, Executive Director of Tottenham Hotspur, to the stage.