Several key industries have fallen back to production levels last seen in the 1950s. Car production has dropped to its 1952 level at around 700,000 vehicles a year—down by nearly 1 million in a decade—while steel is a shadow of its former output. Even cement is falling back, being increasingly switched to imports. Housebuilding is far below its 1950s’ and 1960s’ levels. The fertiliser industry has closed. Net zero technology is overwhelmingly imported (e.g. the batteries, solar panels, wind turbines, critical minerals and now EVs ), now mostly from China.

Why? Deindustrialisation has multiple causes, exacerbated by the highest industrial electricity prices in the developed world. New digital technologies and data centres are highly energy‑intensive and need reliable, non-intermittent, round‑the‑clock electricity. The idea that we can simply become Singapore-on-Thames, relying on finance, law, tech, and hospitality, is at best naive. Traditional service sectors face rising costs from recent tax and wage policies, and global finance is becoming more fragmented and less open. Meanwhile, the UK continues to rely heavily on foreign investors to fund essential infrastructure, from water and energy to roads.

The UK needs to focus on three big areas: competitive business taxes; affordable and globally competitive energy prices; and major investment in skills. Raising employers' national insurance, raising the minimum wage, increasing workers’ rights and signing ever-higher contracts for offshore wind leave what is left of UK industry reaching for the exit. Instead, we need a switch from business costs and taxes to consumers. It isn’t sustainable for voters to enjoy 21st‑century living standards with 1950s’ outputs. It will take a brave politician to tell the public some of these basic facts of life.

Many people in the Labour Party support bringing utilities like water (in particular, Thames Water) and electricity transmission back into public ownership. Supporters often present nationalisation as a simple fix: no greedy investors, no dividends, and lower bills. But, in reality, nationalisation is far more complicated and involves real trade-offs that are often glossed over.

Financial risks of running these industries do not disappear when the state takes over. Under private ownership, investors bear the risk and expect returns through dividends and interest. Under nationalisation, that risk shifts to customers and taxpayers instead. If the government still borrows to fund investment, interest payments remain. If it wants to avoid borrowing, then customers would have to pay higher bills now to fund upgrades and maintenance — a return to the “pay-as-you-go” model used after the Second World War.

Nationalisation also wouldn’t automatically improve how these industries are run. The state once had strong expertise in managing utilities, but that capacity largely no longer exists. There is a risk that governments use nationalised industries for political goals, such as freezing prices, which can lead to underinvestment and reduce service quality. Anyone arguing for nationalisation needs to be honest that it likely means higher bills today, real financial risk for the public, and no guarantee of better performance.

As 2026 begins, and people look ahead to what it might bring, this podcast focuses on the likely, more profound, economic and geopolitical shifts expected by 2030 – now less than five years’ away. Immediate questions revolve around UK elections, leadership changes, and ongoing conflicts like Ukraine and Taiwan, but infrastructure, technology and economic planning require a longer-term perspective. By 2030, the world is likely to be more fragmented into economic and political blocs, with China, Russia, and the US reinforcing self-sufficiency, and emerging economies like India and Indonesia gaining prominence. Climate change progress is expected to remain minimal, and technological revolutions in AI and quantum computing may either transform industries or deliver incremental changes.

Of the possible shifts in the next five years, a significant global financial correction before 2030 appears the most likely, driven by unsustainable market valuations, private equity vulnerabilities, and mounting government debt. The aftermath could involve serious inflation and currency debasement, as governments resort to aggressive monetary interventions. This scenario would reshape political and economic models, potentially leading to more state intervention and less private sector influence.

Looking ahead, three possible trajectories for the UK and similar economies are outlined: continued muddling through with incremental adjustments; a radical re-set akin to a “Thatcher moment” to curb public spending and debt; or a protectionist “fortress Britain” approach emphasising self-sufficiency. Each path carries profound implications for trade, growth, and political stability. But financial markets seem most likely to act as the catalyst for systemic change before 2030.

Why is it that this government, and its predecessors, find economic growth so hard to attain? In the UK, growth remains stubbornly low for a number of reasons, and these are not the ones that the government is currently blaming. First, governments avoid hard choices and spread resources too thinly. As Tony Blair said to me many years ago, politicians prefer to have "and" over "or" – in his case, nuclear and renewables. Political instinct favours doing “everything” to please all parts of politicians’ constituencies, but this dilutes investment and prevents large-scale, coordinated programmes. Instead of comprehensive strategies like those seen in China or France, the UK pursues piecemeal, case-by-case projects, resulting in high costs and inefficiencies, such as probably the most expensive nuclear plants in the world (at c. £12 billion per gigawatt). Without focused, long-term infrastructure programmes, growth cannot accelerate.

Beyond this, structural issues compound the problem. Western economies, especially the UK, prioritise consumption over production, rely heavily on welfare spending, and maintain incentive systems that discourage work. High taxes and borrowing further stifle growth, while domestic savings – critical for funding investment – are minimal. Unlike post-war economic miracles in Germany, Japan and China, driven by savings and production, the UK depends on foreign capital and supply chains, leaving its economy vulnerable. A fundamental shift towards production, supported by domestic savings and programme-driven investment, is a prerequisite for sustainable growth.

There are five major lessons from COP30. They are not the ones the climate community has highlighted, but they really matter and will shape the post-COP30 climate change negotiations.

First up is the realisation that it is no longer a European (and UK) game. The shifts in world political and economic power for the first time sidelined the Europeans. There was no UK “climate change leadership” to be taken seriously. It is India, China, Russia and the US that pulled the strings, whether present or not. Second, no major oil and gas producer or coal-burning nation wants to stop. Brazil set the tone: it announced that it wants to be the world’s fourth-largest oil producer, with drilling to start in the mouth of the Amazon. Third, no one wants to cut their carbon consumption, personally or nationally. The Brazilian carbon footprint includes the flights, the new road through the rainforest, the cruise liners for accommodation, as well as the commitment to its own fossil fuels. Fourth, the real action was on the bottom-up trade issues, notably the carbon border adjustment mechanism (CBAM) and the emerging coalition of the willing with the extension of carbon pricing. The fifth lesson is that the temperature is going to go on rising: 30 COPs so far haven’t made a dent in the carbon concentration in the atmosphere, and another 30 COPs probably won’t.

As the Chancellor gears up to deliver the Autumn Budget next week, let’s look behind the headlines at the reality of what is going on with the UK’s economy and lack of growth. Despite what the current government argues (not very different from the previous incumbents), the UK’s economic stagnation is not so much due to a lack of new infrastructure projects or excessive regulation, but rather the chronic failure to maintain existing assets. Essential networks—such as railways, roads, water systems, and mobile connectivity—are in poor condition, creating inefficiencies and costs that ripple through the economy. Instead of prioritising glamorous projects like HS2, the focus should be on ensuring that current systems actually work. Well-maintained infrastructure provides resilience and reduces the disproportionate costs of failures, making it a cornerstone for productivity and growth. This is not a technical challenge but a matter of political priorities and regulatory focus.

Current fiscal rules and political incentives distort spending decisions. The government re-labels maintenance as “investment” to justify borrowing, shifting costs to future generations and encouraging flashy enhancements over essential upkeep. True maintenance should be funded on a pay-as-you-go basis through current bills, ensuring intergenerational fairness and system reliability. Capital maintenance comes first, second, and third, with new projects only after existing infrastructure is robust.

British energy policy, once heralded as a pathway to cheap, secure and decarbonised power, has instead resulted in some of the highest energy costs globally. Despite the optimism of Ed Miliband and before him, Boris Johnson, Britain’s energy system is heavily dependent on foreign supply chains, finance and ownership. The shift to intermittent renewables like wind and solar has doubled infrastructure needs, while long-term contracts lock in elevated prices until at least 2045. Offshore wind, particularly in Scotland, suffers from grid constraints, leading to payments for unused generation. The government’s approach to nuclear, with its “let’s try one and see if it works” perspective, rather than a fully fledged nuclear programme, has followed an inefficient and costly path, further entrenching high costs.

This trajectory poses serious risks to the UK economy. Energy-intensive industries are closing, and few new ones are emerging, as high energy prices deter investment. Britain’s apparent success in reducing carbon emissions masks a growing reliance on imported carbon-intensive goods. Without radical policy reform – renegotiating contracts, restructuring pricing, and rethinking energy strategy – Britain faces a future of permanently high energy costs and diminished industrial competitiveness. What is needed now is not our politicians flying off to yet another COP, this time in Brazil (with access by a new road cut through the Amazon rainforest), but honesty and humility in global climate discussions, urging leaders to learn from Britain’s missteps rather than emulate them.

The UK’s infrastructure costs are amongst the highest globally, making ambitious projects—like new nuclear plants, HS2, and airport expansions—extremely expensive. Hinkley and Sizewell nuclear stations together may end up costing more than the original full costs of HS2, and a new Heathrow runway could reach £40 billion. Even basic upgrades, like sewage tanks and reservoirs, are far pricier than elsewhere. While some projects, such as the Elizabeth Line and Thames Tideway, have been delivered efficiently, these are rare exceptions.

The main drivers of high costs are higher costs of capital (due to high interest rates and inflation), low labour productivity, and fragmented project delivery. The UK often builds infrastructure as isolated projects rather than as part of coordinated programmes, which prevents investment in supply chains and skills. France’s programme of nuclear power stations building in the 1980s is an example of how things could be done. Unlike countries that use the state’s balance sheet or commit to long-term programmes, the UK’s piecemeal approach keeps costs high, discourages investors, and limits what can actually be delivered. Without smarter regulation and better planning, these high costs will continue to hold back progress.

Few people have much good to say about the water industry, and the blame game is fully engaged. But what to do? There are four possible options: continue with minimal reform; implement the recommendations of the recent Independent Commission on Water, led by Sir Jon Cunliffe; nationalise the industry; or adopt a catchment-based regulatory model. The Cunliffe Commission advocates: abolishing Ofwat, merging its functions with the Environment Agency, and introducing a supervision model akin to banking regulation. The former is not thought through, not least its neglect of the EA. The latter adds even more layers of regulation. It will be costly and there is a serious risk of regulatory capture, all the while not addressing the core issues of public distrust and investor reluctance.

The right approach is Catchment Regulation Model, using digital mapping and AI-enhanced data to guide environmental interventions. It encourages participation by all the parties, including through competitive bidding for projects (as opposed to financial engineering). It is the one route that can create a sustainable, transparent, and inclusive framework for the next 35 years. However, as the government reflects on the recommendations in the final Cunliffe Commission report, continued superficial reforms, particularly in the case of Thames Water, sadly look more likely, kicking the problems down the road.

Why when solar and wind are supposed to be nine times cheaper than gas are electricity prices in the UK amongst the highest in the world? Why when the UK is supposed to be a fast track to this promised cheap net zero electricity by 2030 are large industrial users struggling? Why is Grangemouth in trouble? Why is the steel industry in such bad shape that it has be bailed out and nationalised? Why have fertiliser and petrochemical companies and now biofuels all reached for the exit? The UK’s dash for renewables is supposed to be creating a clean-energy superpower, based upon “home-grown” energy, whereas in fact almost all of the supply chain is imported.

Renewables are not cheap when their system costs are properly measured. Marginal costs might be near zero, but a renewables-based system already needs almost twice the capacity as the old coal plus gas plus nuclear system, even though demand has fallen. To produce roughly the same amount of firm power, a renewables-based system already requires lots of new transmission lines, which were not needed in the past for the same demand, as well as a host of upgrades. It requires batteries and storage and lots of back-up gas standing mostly idle, as well relying heavily on imported electricity via the interconnectors to keep the lights on. Renewables are not like-for-like and the wholesale price for firm power should not be compared with the contract for differences (CfD) price for intermittent generation. The nine times cheaper claim relies on leaving almost all the relevant costs out of the comparison.

It's time for some energy and climate realism and some honesty about the costs and consequences of the net zero 2030 target.