The UK’s finance sector is one of the world’s largest, producing over 7 per cent of
national economic output. World-leading in terms of technological innovation,
expertise and global reach, it employs around 1.1 million people across the UK;
is responsible for a roughly £60 billion trade surplus in financial services,
equivalent to around 3 per cent of GDP; and contributes more than £24.4 billion
to the Exchequer in taxation.88 Half of the world’s financial firms have their
European headquarters in London; around 78 per cent of European capital
markets and investment banking revenues come from the UK; and 46 per cent
of equity in the whole of the EU is raised in the City of London.89 This is, on any
account, a hugely successful part of the UK economy.
Yet the UK performs very poorly by international standards on investment.
Investment is the engine of any economy; it drives both productivity and income
growth. But at around 17 per cent of GDP, the rate of public and private investment
in the UK economy is around 5 per cent below the OECD average. This gap has
widened over the past 50 years; indeed, the UK investment rate has been falling
for most of the past 30 years (see figure 3.5). A similar gap exists for private
sector investment alone: corporate investment in fixed assets (not including
construction) fell from 11 per cent of GDP in 1997 to just 8 per cent in 2014 – well
below the rate of capital depreciation, meaning that the stock of business capital
is actually falling. The comparable rate of corporate investment in the US in 2014,
for example, was 12 per cent.
How many very expensive steel mills do you need to invest capital in to build the world’s premiere financial marketplace?
Are these people really this damn incompetent?