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One of the world’s largest infrastructure investors says the UK is no longer an attractive place to invest due to political turmoil and uncertainty about the direction of government policy.
Australia-based IFM Investors, one of Manchester Airport’s largest shareholders and owner of the M6 toll road, said that while it has a wide range of assets across the UK, it will not be able to invest in new infrastructure due to further significant investment in new infrastructure. The company has cooled off. High levels of uncertainty caused by government dysfunction and ineffective planning processes.
“We are happy to invest in the UK, we have significant assets here,” chief strategist Luba Nikulina told the Financial Times. “But in order to make new investments, we need to find economically attractive opportunities, and there aren’t many of them right now.”
She added: “There is political uncertainty in the US, but it’s worse in the UK. We’ve had four prime ministers in four years.” IFM has about $140 billion in assets and owns 35.5% of Manchester Airports Group, which It also owns London Stansted Airport and East Midlands Airport.
Her comments came just days after Prime Minister Rishi Sunak controversially canceled the northern section of the high-profile HS2 rail line, Britain’s flagship infrastructure project, citing rising costs. He said the subsequent £36bn saved would be recycled into other road, rail and bus projects.
Sunak’s claim that he was taking difficult “long-term decisions” in the national interest has been rejected by a number of former prime ministers, including former Conservative prime minister David Cameron.
Cameron said that by canceling a large part of the HS2 plan, Sunak had “thrown aside 15 years of cross-party consensus that had been maintained across six governments and would make consensus-building on any future long-term plan even more difficult.” Difficulty”.
However, a spokesman for Sunak said: “The billions of pounds flowing into UK infrastructure projects from abroad prove that the UK remains one of the best places in the world to invest.
“This week alone we have confirmed Marubeni’s £10bn investment in clean energy schemes, which will create thousands of jobs and mark another wave of pressure on British businesses from the likes of the US, Singapore and India in recent months. A vote of confidence.”
Labor opposition leader Sir Keir Starmer this week pledged to “bulldoze” Britain’s restrictive planning system to boost housing and critical infrastructure projects.
Nikulina said UK infrastructure was struggling to attract the necessary private investment due to uncertainty over post-Brexit policy direction, high costs and labor shortages.
“The biggest concern is uncertainty, which is not a good thing for long-term capital,” she said, adding that turnover in some government departments means “policy making is highly uncertain.”
She said this makes it difficult for investors to participate in infrastructure projects, which are long-term, costly and vulnerable to changes in policy regimes.
The UK government recently pushed back the deadline for a ban on the sale of new petrol and diesel cars from 2030 to 2035, a decision she said meant “the risk-reward profile starts to change if you invest in electric vehicle charging infrastructure”. The opposition Labor Party said it would reinstate the 2030 ban if it won the next election, but refused to commit to reversing the government’s decision on HS2.
Nikulina also pointed to windfall taxes on energy companies as another potential danger for investors.
She said the UK also faces stiff competition from the US market, where infrastructure investment subsidies brought about by the US Inflation Reduction Act have helped make it an attractive destination for investors.
“What we need is a program that is executable and globally competitive, and the US is pushing so hard now that it’s hard for the UK to compete,” she added.
She also blamed the UK’s “very slow and inefficient” planning system, which makes it difficult to get new projects off the ground and stick to timetables and budgets. Nikulina said that while Nimbi Doctrine had potential benefits for the British economy, it also acted as a barrier to infrastructure development. He pointed to barriers to building a new rail line to the airport that would increase the movement of goods outside London.
However, she added that initiatives such as luxury housing reforms are giving investors hope. Housing reform is an initiative launched by Chancellor Jeremy Hunt, which includes plans to shift pension savings into illiquid assets.
“While the government is playing musical chairs, people are finally realizing that the economy needs more investment,” she said.
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