Britain's economy is “not working”. Here are two main reasons.

And in rural Cambridgeshire, a British semiconductor start-up was ready to expand beyond its laboratory and open a manufacturing base. But the company's ambitions came with unexpected costs to provide enough electricity for the new site. Potential bill? one million pound.

Paragraf makes chips using graphene, an extremely thin carbon. Its devices could be used to check for defects in electric car batteries to prevent fires, or work in quantum computers. Following the acquisition of the site in 2023, Paragraf has made plans to increase its weekly manufacturing capabilities from tens of thousands of devices to millions.

But the cost of increasing power supplies to the site, the result of years of underinvestment in Britain's electricity grid, diverts money – and time – from hiring and purchasing equipment, said Simon Thomas, Paragraph's chief executive.

“The biggest advantage we have when you're a company like ours is the speed at which you can move,” he said. He added that the delay “doesn't just affect what you can do now, it affects how successful you will be in the future.” “It's very frustrating.”

Across the country, complaints about the lack of investment in Britain then reached a fever pitch More than a decade – Low economic growth and stagnant wages.

Raoul Rubarel, director of Boston Consulting Group's Growth Center and a former special adviser to the British government, said there was an “overriding sense that things are not going well” in the economy. This includes a lack of affordable housing, poor public services including transportation, and long hospital waiting times.

With the economy expected to be essentially stable this year, two ideas have emerged to revitalize it: accelerating the modernization of the electrical grid and making it easier for new construction to gain planning consent. Analysts and lawmakers hope these initiatives can unleash infrastructure investment, cut carbon emissions and deliver much-needed productivity growth.

Addressing obstacles

The problem is big: in the past five years, the number of requests to connect to the electricity grid – many for solar generation and storage – has increased tenfold, with waiting times of up to 15 years. Lack of investment is constrained Cheap energy flow From Scottish wind farms to population centers in England, adding delays for those who need high power, such as laboratories and factories. Laws that give local planning authorities too much power are blamed for Britain's housing shortage and hampering the construction of towers needed to transmit electricity from offshore wind farms. Residents' objections to noisy construction and changes to the landscape were a stumbling block.

Planning and network communications are the foundations on which everything else is built, Mr. Ruparel said. He added that a functioning grid that provides reliable, low-cost energy and a planning system that allows for the construction of all types of infrastructure “are essential to having a productive economy and a more efficient economy.”

Planning and network communications, once relatively niche concerns, have become of mainstream importance. At the opposition Labor Party's annual conference this autumn, Keir Starmer, the party's leader, promised to “demolish” Britain's “restrictive” planning system and get the electricity grid moving “much faster” if he wins the race for prime minister in the election. The next general election is expected in 2024. Jeremy Hunt, the Chancellor of the Exchequer, said planning and network reforms were among the most important changes in the latest Budget update to revive growth.

“We want to go faster than some of the infrastructure allows us,” said Natasha Conway, research director at chip maker Paragraph, which spun out of the University of Cambridge six years ago.

The company, which has about 120 employees, manufactures sensors used to measure magnetic fields. Attracted by the CHIPES Act, which provides subsidies to semiconductor manufacturers, she considered setting up production in the United States. But in the end, Thomas chose to stay in Britain and set up a local manufacturing company.

“Graphene was isolated and invented here in the UK,” he said. “Are we going to let all the value go somewhere else?”

But securing enough electricity was not easy.

After months of searching for a location that would provide them with the power they needed, Mr. Thomas said, he settled on a warehouse located 10 miles from the laboratory that would need power improvements. Instead of waiting for an upgrade arranged by the local council, the company went ahead by paying the network operator to install a connection to the main network. The company said this solution would allow work to start sooner but would carry costs of up to £1 million ($1.27 million), including the price of upgrades to the first laboratory. Paragraph expects initial production to begin by the second half of 2024, about a year and a half after acquiring the site.

In November, the government announced measures to speed up planning approval for major projects and disrupt the NIMBY movement. These moves would, among other things, give communities financial benefits for approving network infrastructure projects in their area and change the first-come, first-served waiting list for network connections to remove stalled projects.

The National Infrastructure Commission, which advises the government, has welcomed the plans. Many of the reforms were drawn from the special committee's recommendations, but the group wants the government to go further in compensating people when important projects such as housing developments or electricity transmission facilities are built nearby.

John Armitt, chairman of the committee, said the country needed to overcome “the desire to maintain a chocolate-box image of Britain, which is good for tourists who come and look at quaint old villages”. “There must be more to Britain's future than that.”

The inability to build major projects – such as the government's decision in October to cut a key part of a planned high-speed rail line, citing delays and overspending – affects investors' “view of whether the UK is a worthwhile place to be.” no”. Mr. Armit said.

Britain needs more investment: the Commission estimates at least £70 billion a year in the 2030s, an increase from an average of about £55 billion a year over the past decade.

The rules discourage investment

One way the British government has kept investors away is by changing planning procedures in 2015, and tightening them further in 2018. So one objection could turn a planning application on its head – effectively banning onshore wind in England. John Fairley was a wind industry consultant at the time.

Mr. Fairley is currently Managing Director of AWGroup, a recently founded land development and renewable energy company It got an onshore wind turbine up and running in Bedfordshire, in eastern England, that would generate enough electricity to power 2,500 homes. Due to planning constraints and delays in connecting to the grid, the project took seven years to complete.

“In the last few months, policy has changed, but it hasn't changed enough,” Fairley said.

The turbine, which was in the planning stage as rules tightened, was able to gain approval in 2017. Since then, the main source of delay has been securing connection to the grid. Advances in wind energy technology have allowed the company to install more powerful turbines, which otherwise would have required a greater connection to the grid. “It takes a long time to do that,” Mr. Fairley said.

Next year, the turbine will be used to directly power an electric vehicle charging station, and the company is planning more projects as it builds residential projects that are powered directly from local renewable energy sources, avoiding the grid burdened with delays.

As Britain seeks to escape a long period of slow growth and loss of productivity while meeting carbon emissions reduction targets, businesses, economists and other experts say the government urgently needs to commit to these reforms.

“There's a lot of recognition” of the problems, Mr. Armit said. “We're great at achieving ambition” but we don't turn it into action, he added, which is particularly worrying in relation to net-zero emissions targets.

“What a lot of people have become increasingly afraid of is that we've set ourselves some difficult goals, and as long as you're 10 years or so away, well, it's pretty easy to throw the can away,” he said. road.”