How Brexit gives us the opportunity to put public services first
Solvency II - an EU directive - is acting as a roadblock to unlocking investment in transport infrastructure and starter homes, says Shaun Bailey MP
Brexit gives us greater freedom over how the British economy works. But current insurance rules on investment, a legacy from our membership of the EU, are a hindrance to ‘Levelling Up’. We need to remove this roadblock and put public services first
In the heat of debate around the Northern Ireland Protocol and fisheries, we shouldn’t lose sight of the opportunities now open to the United Kingdom –which, if addressed, could hold the key to Levelling Up and hugely benefit our communities.
One example is the EU Directive, Solvency II. Originally designed to monitor the amount of capital an insurance company holds to reduce the risk of insolvency; this policy is becoming a massive roadblock to unlocking the investment that would deliver real benefits for UK families.
Current rules make it much easier to invest in Amazon or Facebook than in tangible investments at home like transport infrastructure, or starter homes. It means investment is often skewed away from things like renewable energy and critical infrastructure, which are vital to our transition for net zero.
KPMG have estimated that at least £95bn is being held back from being reinvested in the UK which could boost our economy and deliver meaningful change to millions of people.
I hear from leading experts about how investment in long term infrastructure and in the public sector can take months to years to be approved and the ultimate losers are those with the least.
I want a strong public sector and believe it’s right that a safety net exists. I would have been lost without it, as a young lad raised in a single parent household in a council house. But the money for the vital investment needed can’t come from the UK Government alone and we must recognise the role of private companies in driving prosperity across the country.
Current rules make it much easier to invest in Amazon or Facebook than in tangible investments at home like transport infrastructure, or starter homes.
It’s not just investment that Solvency II is hindering – it’s also making it more expensive for small businesses to look after their employees’ health and wellbeing through insurance schemes, something that’s 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 premiums, but it’s employees who pay the price when they don’t get the support they need and are pushed towards the welfare state and away from the job market – posing a major risk for the mental and physical health of our citizens and communities.
To make these changes would require simple edits to existing UK legislation – which, since Brexit, we are now able to make.
I’m often asked what ‘levelling up’ means. To me, it’s about equal opportunities across the country and improving life chances for everyone. One way in which we can achieve this is by harnessing the power of the private sector to boost the overall economy and strengthen our public services. It’s this partnership that matters when it comes to delivering in areas like mine in Wednesbury, Oldbury and Tipton, in my constituency of West Bromwich West.
As we begin a new year, I want to ensure that those of us sent to Westminster to find ways to make the lives of constituents easier put the reform of Solvency II at that top of their lists. We all deserve a better start to 2022 so let’s make that happen now.
More information on Unum
Specialist employee benefits provider Unum is working with MPs to make it easier for Britain’s SMEs to access insurance products that support the health and wellbeing of their workforce. These changes could have an impact in constituencies across the country
Unum offers financial protection through the workplace – including life insurance, critical illness, dental cover, and income protection insurance. At the end of 2020, Unum protected 1.6 million people in the UK and paid claims of £360 million during 2020 – almost £7 million a week in benefits to our customers – providing security and peace of mind to individuals and their families.
To find out more visit: unum.co.uk
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