Meet our experts
Sir Nigel Wilson
Group Chief Executive
Since early 2021, Legal & General has been tracking the government’s progress in “levelling up” the UK. Through our Rebuilding Britain Index (RBI), we use a combination of quantitative data and our quarterly survey of 20,000 people to assess how well the country is “building back better” following the pandemic.
The sixth report, published this month, comes at a time of increasing economic uncertainty, as the cost of living crisis continues to deepen. Our report shows that 69% of people in the UK are making cutbacks on their household budgeting, while a worrying 13% feel they have nothing else left to cut back on.
We also found that 52% of people plan to decrease expenditure on consumer goods such as clothes and tech; half expect to spend less on holidays and travelling; and 49% will cut back on leisure activities like trips to the cinema. This is likely to cause a knock-on effect that will leave retailers and high street outlets facing additional uncertainty.
Unfortunately, the report also shows that the cost of living crisis is increasing the already stark levels of inequality between different parts of the country, putting the levelling up agenda at risk. For example, only around half of people in Scotland and Wales are confident of maintaining their current lifestyle over the coming year, compared to 72% in London.
With almost half of UK households concerned about being able to keep up their rent or mortgage payments over the next 12 months, there’s no doubt that immediate financial support will be a vital intervention for many. The £15bn package of “targeted government support”, which includes a one-off “cost of living payment” of £650 to vulnerable households who receive universal credit and £400 to all households, will form an important part of that support.
In the longer term, however, our report shows that a structural rethink will be required to address the underlying inequalities that are fuelling the current crisis.
One crucial measure in tackling energy bills is making our homes and offices more energy-efficient, both through ensuring new buildings are of the highest standard, and retrofitting existing ones. Almost two-thirds of respondents described more investment in this area – which of course also plays a key part in tackling climate change – as an attractive or very attractive option to address the cost of living.
Jobs are another key factor. Although unemployment remains low, it’s crucial that jobs are properly paid. More than half of respondents to our survey agreed that government investment in high wage, high value sectors such as technology and engineering was an attractive or very attractive way to tackle rising living costs.
As the report concludes, “Failure to support households through the current cost of living crisis certainly risks setting back levelling-up years. Not tackling the structural root causes of these inequalities now risks setting it back for decades.”
At Legal & General, we believe that private capital has an important role to play in the UK’s levelling up journey, and we’ve already invested more than £30bn in towns and cities across the UK as part of our approach to inclusive capitalism. Going forward, greater collaboration between the new government and public and private sector organisations around the country will be key to attract and enable greater investment.