Brexit gives us greater freedom over how the UK economy works. But current investment insurance rules, a legacy of our EU membership, are an obstacle to the ‘race to the top’. We need to remove this roadblock and put public services first
In the heat of the debate around the Northern Ireland Protocol and fisheries, we must not lose sight of the opportunities now open to the UK – which, if addressed, could hold the key to leveling up and greatly benefit our communities.
An example is the EU directive, Solvency II. Originally designed to monitor the amount of capital held by an insurance company to reduce the risk of insolvency; this policy is becoming a massive barrier to unlocking investment that would bring real benefits to British families.
The current rules make it much easier to invest in Amazon or Facebook than in tangible home investments like transport infrastructure or starter homes. This means that investment is often diverted from things like renewable energy and critical infrastructure, which are vital to our transition to net zero.
KPMG has estimated that at least £95bn is being prevented from being reinvested in the UK, which could boost our economy and bring significant change to millions of people.
I hear leading experts tell me that investment in long-term infrastructure and in the public sector can take months or even years to be approved and that the ultimate losers are those who have the least.
I want a strong public sector and I believe it is right for a safety net to exist. I would have been lost without it, as a young boy raised as a single parent in a council house. But the money for the vital investment needed cannot come from the UK government alone and we must recognize the role of private business in driving prosperity across the country.
The current rules make it much easier to invest in Amazon or Facebook than in tangible home investments like transport infrastructure or starter homes.
It’s not just investment that Solvency II hampers – it also makes it more expensive for small businesses to look after the health and well-being of their employees through insurance schemes, which is important in the post-pandemic workplace and can have a tangible effect throughout our communities.
But the old EU rules treat these products unfairly. Employers are put off by higher bonuses, but it is employees who pay the price when they don’t get the support they need and are pushed into the welfare state and away from the labor market – which raises a major risk to the mental and physical health of our citizens and communities.
Making these changes would require simple changes to existing UK law – which, since Brexit, we are now able to make.
I’m often asked what “leveling up” means. For me, it’s about equal opportunity across the country and improving everyone’s chances in life. One way to do this is to harness the power of the private sector to stimulate the economy as a whole and strengthen our public services. It is this partnership that matters when it comes to delivering to areas like mine in Wednesbury, Oldbury and Tipton in my constituency of West Bromwich West.
As we begin a new year, I want to make sure those of us sent to Westminster to find ways to make life easier for voters put Solvency II reform at the top of their lists. We all deserve a better start to 2022, so let’s make it happen now.
More information about Unum
Specialist benefits provider Unum is working with MPs to make it easier for UK SMEs to access insurance products that support the health and wellbeing of their workforce. These changes could impact ridings across the country
Unum offers financial protection in the workplace – including life insurance, critical illness insurance, dental coverage and income protection insurance. At the end of 2020, Unum protected 1.6 million people in the UK and paid claims of £360 million in 2020 – almost £7 million per week in benefits to our customers – delivering safety and peace of mind to individuals and their families.
For more information visit: unum.co.uk
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