Legal & General chief Nigel Wilson’s well-aimed rocket at government

Jeremy Hunt should invite the outgoing CEO in for a coffee, says James Moore

Legal & General chief executive Nigel Wilson (PA Archive)

“We have to recognise we’ve starved our economy of growth equity and the consequence is we are a low growth, low productivity, low wage economy fraught by political infighting. This has to change.”

Ouch!

CEOs usually choose their words carefully when it comes to politics; mustn’t upset the children in Westminster. Legal & General boss Nigel Wilson has clearly decided Britain’s problems run so deep that diplomatic language won’t do any longer.

Did it matter that all those comments – aired on the Today programme for maximum impact – came as the group unveiled his valedictory results? (They beat expectations, in stark contrast to Britain’s political class.)

You could argue that being on his way out gives him greater freedom to speak. On the other hand, many CEOs prefer bland platitudes at the end of their tenure; they like the baubles such as seats on the boards of worthy bodies, the leadership of commissions and what have you. Outspoken comments won’t help with that, certainly not under the current hypersensitive administration.

I doubt Sir Nigel is too worried. What he said was grounded in a deep personal conviction. He genuinely believes in Britain and its potential as a place to do business. The crippling effect on the economy of a lack of investment is something that has long exercised him. He believes “mission-led” businesses should play a key role in fixing that.

A polymath, MIT graduate, and one of the UK’s best CEOs, he’s also a Brexit-y type from the northeast who cannot easily be dismissed by Westminster as being part of a lefty Remoaner establishment. That, and the fact that he’s broadly correct.

Empty boosterism and railing against people “talking Britain down” can’t disguise inconvenient facts. They’re there in the numbers.

A substantial corps of Tory MPs still believe the solution lies in Liz Truss’s sugar rush of tax cuts, which would somehow miraculously turn Britain into the foggy equivalent of an Asian tiger economy.

Sir Nigel prefers regulation that would allow people like him to put money to work. “We need the government to step up and put rules and policies in place that allow us to invest in the real economy in the UK,” he says.

Some of his fire could easily have been turned closer to his home. British business is bad at investment, in the creation of “growth equity”. When cutting corporation tax was all the rage as a means of change, British business consistently finished towards the bottom of international league tables. The bung from tax cuts was spent on short-term sweeties for shareholders. There is still an attitude problem here, one that isn’t evident in Asia’s successful economies, or in Germany – or even in the US where the quarterly results cycle ostensibly encourages short-term thinking.

But that doesn’t invalidate his criticism of government.

Chancellor Jeremy Hunt does appear to have recognised that hiking corporation tax by 6p in the pound at the same time as Rishi Sunak’s “super deduction” tax break is removed is sub-optimal, especially with the economy in relatively poor health. Plans to address this are being formulated.

Upon his appointment, Hunt managed to stabilise the markets and restore some degree of confidence after the bomb Truss and and Kwarteng dropped on the economy.

But securing the future is a much bigger challenge; Hunt has work to do there. Perhaps he should invite Sir Nigel in for a coffee? He once turned down the offer of a ministerial red box but that doesn’t mean he can’t contribute.