Grow Places

GP 33: Economics to Reflect Modern Life: with Leading Economist Bridget Rosewell CBE

• Grow Places • Season 1 • Episode 33

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Discover how traditional economics is being reshaped to meet the complexities of modern life with the pioneering insights of Bridget Rosewell CBE. Bridget shares her journey from the classrooms of Oxford University to leading infrastructure projects like Crossrail, where she champions a more human-centered approach to economic modelling. Her insights reveal the transformative potential of integrating human behaviour and social factors into economic frameworks, providing fresh perspectives on infrastructure planning and societal growth.

As we navigate the pressing issue of housing affordability, we unravel the intricate dynamics of land costs, planning constraints, and strategic development. By exploring models like the Oxford-Cambridge arc and the potential of Compulsory Purchase Orders, we uncover pathways to sustainable housing growth that prioritize both supply and rental sector enhancements. Our conversation also delves into the multifaceted nature of the rental market, advocating for diverse rental options and long-term tenancies to effectively tackle the housing crisis.

In our exploration of post-COVID economic trends and generational shifts, we examine how changing work expectations are reshaping societies. Bridget offers insights into the evolving definitions of work-life balance among Gen Z and millennials, and how these shifts are influencing productivity and public services. Additionally, our discussion on infrastructure investment highlights the promising yet risky ventures in carbon capture storage and sustainable aviation fuel, emphasizing the crucial role of government funding in pioneering these forward-looking sectors. Join us as we uncover the motivations that drive careers in economics and infrastructure, where problem-solving and persuasion play pivotal roles in shaping the future.

Speaker 1:

Hello and welcome to the Grow Places podcast, where we explore the virtuous circle of people, growth and place Brought to you by Grow Places and hosted by our founder, tom Larson.

Speaker 2:

Bridget, thank you very much for joining me on this podcast today. How are you?

Speaker 3:

I'm very well, thank you.

Speaker 2:

Bridget, it'd be great if you introduce yourself in a second, but I want to highlight something that's on your website, which is BridgetRosewellcom, which is you're about, bridget is changing the face of economics to reflect modern life. So I'd love to kind of frame a conversation around that, in the sense of what we do, which we can come on to.

Speaker 3:

Okay, that's fine. Do you want me to explain what I mean?

Speaker 2:

by that, yeah your background.

Speaker 3:

So I'm trained as an economist, you know, back in the day, a long time ago, and I taught economics at Oxford University, and then I realised I was teaching things I didn't think were actually true, or were only true under very limited circumstances, and so I kind of moved away into thinking about how we could do economics better, and that really means with more uncertainty and with more variability in behaviour, and indeed, particularly that how you behave and I behave actually reflects one another. We're influenced by the people around us, we're influenced by the context that we live in, and that isn't reflected at all in standard economics, where everybody's very much an individual and they make decisions based on their own individual preferences. And actually, when you think about it, we don't do that, do we? We're affected by families and all sorts of things. So an economics which was more human and more reflective of the way people actually think and behave is something I became extremely interested in, and certainly and something that I tried to kind of introduce into some of the jobs that I was involved with, for example, things like I worked a lot on Crossrail, now the Elizabeth line, and in there there was a sort of we put some something into it about capacity constraints and about the benefit of getting more people together where they affect one another, which wasn't in the standard book of rules, and that was one of the ways in which we got the Elizabeth line over the line and of course it's now very successful. So I'm quite proud of that successful.

Speaker 3:

So that's you know, I'm quite proud of that, and so that's a sort of a real life example of trying to add a little bit of humanity, I guess, into the way that economists think and into the way the decision making, particularly in the public sector, is made, where cost benefit analysis is a fabulous concept. I mean, I really think thinking about costs and benefits is really important, but you have to be sure you're thinking about all the costs and all the benefits, not just kind of sit yourself in a silo. So I've written about this particularly in the context of infrastructure, and then I've really sort of moved away a bit from actually the doing of those sorts of things into a more portfolio position. So I'm Senior Advisor to Volterra, but I'm also Chairman of Flood Re Reinsurance Company, I'm on the board of the National Infrastructure Bank, I'm on the board of Northumbrian Water and I chair the M6 toll road.

Speaker 2:

Amazing. So plenty of spare time as well then, bridget, absolutely Lots of spare time to dig the vegetables and walk the dog Absolutely.

Speaker 2:

No, that's brilliant and I'm really grateful to have this conversation. Um, because we are we're a property developer. Um, we specialize in sort of transformative neighborhood scale projects, so relatively big in terms of urban projects, you know, master plans, collection of buildings, but not necessarily big in your scale in terms of crossrail or big infrastructure projects. Uh, so we're really interested in people and place and and how that dynamic interacts. You know, the theme of this podcast is exploring the virtuous circle between people, growth and place and this idea that as people grow, that enables growth in places and that supports growth in people. Um, so it'd be great to get your, your thoughts on that and and um, just one thing you know, I see what we do in the built environment, where we're very much sort of straddled, straddling the present.

Speaker 2:

How do we make things work today, but with a view to you know where things might go in sort of 5, 10, 15 years? And that dynamic is ever-changing and is ever a challenge. And what I think the crux of what we want to try to do is to sort of try to understand what people and society and business are trying to do. And then, how does the built environment support that? What does the built environment need to do to enable those things to flourish? Support that. What does the built environment need to do to enable those things to flourish? Um, so, from from your perspective, from from your your lens of how you know, what are the things in in that which really kind of stand out to you? What are the challenges and the questions that we should really be asking and discussing?

Speaker 3:

so I think gosh lots, um. One is how we do plans, uh, and the whole planning the process, because after a plan is something you deliver. Planning is actually what we're doing most of the time and, of course, the first thing that happens to a plan is reality gets in the way and it doesn't really work like that. So we could talk about planning. I think that's absolutely one of the key things that we're not doing very well. I think that the other one I suppose it's related to that it's the way in which different pieces integrate with one another or don't. And one of the things I did very early when I first got interested in infrastructure and transport, actually is doing High speed one many years ago, and in particular, the ebbs fleet development, which I was involved in doing.

Speaker 3:

A planning permission for so 10 million square feet was the sort of uh the mantra, if you like that you wanted to achieve. But what was the right mix? How did you get? How do you get something that would work as a place with a train station at its kind of heart, if you but that would offer residential, it would offer entertainment facilities, it would have offices, it would have hotels, it could be a proper place if you've got that kind of mix right. But then you're also thinking of something that's going to happen over 30 years. So in that period you know that the world will change. People used to. I used to talk about the software when people say, well, I haven't, you know what about this software stuff? And you think when you originally did a plan for, say, heathrow, people would have thought software is something to do with toilet paper, and now that's a whole key area of UK industry. So you know that new things will come along. You don't know what they're going to be and so you need to allow space for that sort of mix to shift as circumstances shift.

Speaker 3:

And too often, coming back to planning, planning becomes a plan and you can't move it.

Speaker 3:

And indeed when we did EBSFLEET, we pushed for a flexible planning permission. So it could be between this and this on resi and that and that on B1 and this and this on other things, all adding up within the same envelope. But the thing would evolve as the world evolved and as markets changed and so on and so forth, and that I think it's the only time it's ever been done, actually, but we did get it through and I still think that's to build more flexibility in to reflect changing circumstances rather than thinking, as economists certainly used to, that you can produce a forecast and then we will plan for that forecast because obviously we know how the world is going to evolve. If there's one thing we've learned over the last decade or two is we don't know how the world is going to evolve and therefore we must build flexibility in. I was a commissioner with the National Infrastructure Commission and very much tried to push that what we called adaptive planning and adaptive attitude to thinking about our infrastructure needs.

Speaker 2:

Yeah, super interesting, and because there are lots of building forms which will be adaptable. So you know, commercial buildings could change to residential or to leisure and to other things.

Speaker 2:

There are other building types that are more fixed, aren't there? In terms of, if you were building housing from day one, that would be slightly more fixed than building offices from day one. So do you see sort of particularly in the UK context, are there any nothing's certain, as you say, but are there any sort of trends that you think that are going to shape the amount of space, the type of space, the mix of uses that we're going to need in our places going forwards, particularly not just from a commercial perspective, but actually much more from kind of like you know how to improve people's quality of life? What, what services, what infrastructure are we going to need to provide in a future facing way to meet those demands? And do you think we fundamentally need to be developing, we need to be building more space, more of these uses?

Speaker 3:

So one of the things that's really I've always reflected I used to live in a Victorian terrorist house which was built for a very different social structure and a very different mix of people who would be living in it. Admittedly, there was a covenant which said I couldn't use it. I couldn't run a gaming house from it there was nobody to impose the covenant, but it was there in the d's, it was quite funny or run a lodging house, um. So you know what? We want this neighborhood to be respectable. It was wandsworth, um, it is respectable. So, but those, those have proved to be very versatile and and lots of people like living in them because they've got good space, they've got great height, good height of ceiling, good size of room.

Speaker 3:

So some of those things around building standards, that houses that people want to live in, and we do get, I think you know we get fixated on things. You know there has to be a gap between the houses and sometimes it's ridiculously small gap. You need good, sound insulation if you're going to build a set of terraces, but they are very flexible and they're a good use of land. So flexibility. The other thing is that, of course, one of the things that is now the case in water. Companies have a duty to provide water if you get planning permission, but there's no duty to establish whether there's enough water. So we need to be much more thoughtful about. In fact, I think it's Anglia and Cambridge Water who have now come back and said actually, we can't supply water to those houses that you want to build, we just can't. We haven't got the water. So being more aware of some of those other constraints, but also, alongside that, of course, you know that there's no requirement to provide high quality internet access. But that's what everybody needs, and the other part of it is the energy requirements of the properties as well. But these are all things that have been evolving and are evolving, continuing to evolve very quickly.

Speaker 3:

I think we should be much more open to district heating solutions. For example, you can do a ground source deep district heating solution, which can be very effective. We're oversensitive to oh, will it be hot enough? I have air source heat pumps. They're fine. It's hotter in the summer. The water's hotter in the summer than it is in winter, but it's okay, and we just need to be more reflective of all of those other pieces. Water flood, obviously, I would say that with floodry, but that's one of the reasons I got involved with floodry, because I was very conscious that changing weather patterns are having an impact Energy, internet access.

Speaker 3:

Have we thought, when we were thinking about a development, about all of those aspects? And then walkability? So when I was first with the National Infrastructure Commission and we did some work, which involved going around and visiting Milton Keynes, I was with the architect member and we were both horrified that nobody seemed to have thought about what you would do if you had a buggy and where the bus stops might be and how you would get from this bit of Milton Keynes into that bit of Milton Keynes if you didn't have a car. So walkability, I think, is almost more important. Walkability and not too far to get to a local shop or whatever.

Speaker 3:

I think there's not enough attention paid. There's much more attention paid to oh, you can only have a local shop because we mustn't damage the town centre. But if nobody can get to the town centre, actually it's not very relevant, is it? And lots of? I live out in the East Midlands now and I'm a bit horrified that huge developments are being put in place with very, very little in the way of local shopping, doctors or you know, or any of the things which people need to be able to walk to, and nursery schools, primary schools, all of those sorts of things, and we can do the child yield calculation, but I'm not sure we ever think about the geography well enough, particularly if you go outside a metropolitan area yeah, no, it's a, it's a really um.

Speaker 2:

It's a really interesting challenge because you know that point I made about focusing on trying to make something work in the present and particularly present economical conditions versus kind of looking forward about kind of what, what are people going to need in the future? Um, and it's very difficult to make developments kind of looking forward about kind of what are people going to need in the future, and it's very difficult to make developments kind of viable at the moment, to make them stack up, particularly if you go outside of London.

Speaker 2:

we've been trying to do a development of 2000 homes in the east of England and the price of the houses that you can achieve is not really what you can build them for. So there's a kind of fundamental mismatch. That's before you even factor in the contributions to build schools or to build other infrastructure and it's partly because the land's so expensive.

Speaker 3:

Yeah, actually.

Speaker 2:

There's no land value in some of these cases.

Speaker 3:

Yeah.

Speaker 2:

Even with that regard. So I just wonder like how do you see any kind of ways that we can almost systemic, ways that we can kind of address this in terms of the finance side of things or the way that we can make projects happen? Because it does feel like maybe what we need in terms of housing and additional cities and towns is quite difficult to achieve in some respects at the moment.

Speaker 3:

I think there's two bits to it. One is, let's say, the cost of the land in the first place, which means that the margin is gone before you've even, as you said, you can't then make beautiful. It's much harder to afford all the other bits and pieces, but I do think good design is not. It doesn't add cost. We had long arguments, um, about this at the nic. Oh well, you know, you add in the design and then it's more expensive. If you start with the design, it needn't to be more expensive, so you can still make attractive places that people actually want to live, want to live in. The question is can they afford to live in it?

Speaker 3:

Of course, regardless, and I think one of the problems has been because the planning system has been so tight.

Speaker 3:

Then land prices go up because there's so little land to be, and then there's an incentive to land bank because you don't know where the next bit of land is going to be able to come from and you pay more and more for it and the result is you've got less and less in order to actually build the house with and, as you say, you come up with something which isn't viable, and the only alternative to that I guess would be CPO, and maybe that is the way that we have to go.

Speaker 3:

But you have to be really careful about that because you know taking people's property rights away for a start, and also you need to be really sure that those are the right places. Too often I think we're built in places because we can rather than because we should, and you know, I point at point places built around me, um, which you think really did. We have to build it like that, on the, on the, on that piece of land which actually has been flooded quite regularly, or indeed because you put those affordable houses there. Now the football field is flooding yeah, yeah.

Speaker 2:

So where do you think those right places are? I don't necessarily mean giving me specific names of towns, but you know sort of um strategically, where do you think those?

Speaker 3:

well, I think that well, we did a piece of work on this on from between the oxford to cambridge uh, work that we did um, which we called ox cam because I wanted to get the milton keens bit in there as well. It's not just about professors and stuff like that, it's about actually affordable, making it possible for there to be enough houses that people can live in these places without breaking the bank, and some areas of Oxfordshire and Cambridgeshire the house price ratio is something like 13 times average incomes rather than the five or six and it was three, after all, when I bought my first house. So we identified actually a variety of different sorts of places. So you could identify places where you could put a settlement that would be big enough to support facilities and so on, and also sort of separate.

Speaker 3:

You could identify edge of town, you could identify smaller places but edge of village, which would actually still be feasible, and after that we got a million homes over a 20 to 30 year period by kind of, you know, a big area, obviously, all of that distance and with quite a lot of things ruled out, like floodplain, like SSSIs, like already built, you know, industrial areas concentrated on brownfield, quite a lot of redundant airfields in that sort of area actually on brownfield. Quite a lot of redundant airfields in that sort of area actually. So if you're imaginative about it and you do the work, you can identify places where it would be feasible and it wouldn't be popular with everybody. But on the other hand, if you want places to be able to sustain children and grandchildren being able to afford to live in in in areas, then that's where you need to go down that road.

Speaker 2:

Yeah, yeah, absolutely so. Do you see this primarily as a supply issue? When we talk about, you know, the affordability crisis, housing crisis, these themes? Do you see that it is a supply and demand imbalance, or do you think there's other factors as well?

Speaker 3:

I think the biggest single factor is a supply challenge, but it's certainly not the only one. So the other piece of this is the availability of property to rent and indeed the private rented market. The successive governments have made it more and more difficult for private rented landlords, particularly in London. That's a really important way that people arrive and they can get somewhere to live and they can sort of slowly build up the deposit and everything or tap up mum and dad to get themselves sorted out over time. But to do that you need that variety of tenures and you need a variety of sort of, if you like, small scale and bigger scale and so on. And again, you know well, a hundred years ago the rental market was huge. Not many people bought, but you'd have long-term tenancies and people willing to invest in those long-term tenancies as well as people willing to take them up.

Speaker 3:

So that's, I think, an area where we've sort of rather and it used to be insurance companies, after all owned vast swathes of housing and if you look at some of the big estates still in London, they were owned by insurance companies or their trusts and so on, providing good quality accommodation at relatively low prices. And I think we've rather lost the plot on rental. So we go for shared ownership and complicated things that people don't really understand. People understand a mortgage and buying their own house. People understand rent, but these complicated things in between, I think, are quite difficult for many people. You're not quite sure what you're going to come out with it or indeed whether you're going to end up in some sort of negative position as far as debt's concerned. So more housing for rent, yeah.

Speaker 2:

Yeah, absolutely Whether social or not?

Speaker 3:

rent, yeah, yeah, absolutely, whether social or not, actually yeah, and if you have more of it, then you can again get some of those numbers to stack up.

Speaker 2:

Yeah, no, I agree. And when you look at patterns of life, patterns of movement, whether that's patterns of where people live to where they work, you know how do you see looking forwards, how do you see that shaping up across the uk, obviously particularly with you asking me to do a forecast. Well, yeah, well, it's a funny thing, isn't it? Because there's kind of, as you say, there's no way to plan these things, but equally, Okay.

Speaker 3:

So one of the long-term trends. So when I first went to work for the GLA and was doing long-term employment forecasts, so one of the things is, you know, what would it take for an existing trend to change? So if you look at one of the long and in London the case, it was declining manufacturing employment and rise in service employment, and was that going to change? No, probably not. But the manufacturing employment has gone, so we got increasing employment. Actually, very, very simple argument and it worked and it was true because I did that first 20 years ago. Um, that's scary, uh. So, on the other on, on the scary, so what are the trends in households and in population? There's been a long-term trend to more single-person households and there's a long-term trend to people wanting more rooms in the house. When I was growing up, it was normal to share bedrooms. Now people, you know children expect not only their own bedroom but their own screen and tech and everything else, and so it's rather different. More private spaces. So more single-person households, more private space. I don't what would it take for that to change? Well, it has changed, but only really because people can't afford to get out or then they end up coming back, but I would say that those trends are pretty established. We know that family sizes have fallen. There doesn't seem to be and that's worldwide, incidentally, it's not just here. So possibly even population will fall, and that will only not be the case with more and more immigration.

Speaker 3:

What I don't think I understand, and I don't know whether anybody really properly understands, is how that balance of population changes the demand for different kinds of property. So some cultures, for example, have three generations and they would expect to have the grandparents there as well as children. So are we ready for that kind of life, those sorts of life choices, and indeed do we think that? I think that more people will want to have those kind of shared living, as it were? I know from my own friends lots of grandparents who end up having to do childcare for the parents some days a week while the parents are working. And of course that used to be a fairly standard way of doing things when everybody lived and worked in a much closer area. But with working from home, then you can see how that begins to perhaps re-establish itself. So if I was going to see a trend or a shift in trend, it would be that multigenerational living, possibly, and the sort of housing and housing facilities that would be necessary for that.

Speaker 2:

Yeah, yeah, Super interesting. And do you think how do you see the trends around mobility and where people live, where they work in a, you know, in a AI driven, you know, work from home, empowered world that we're in, Empowered?

Speaker 3:

eh, that's nice. I'm glad to know we're going to be empowered. Doesn't always feel that way, does it? Clearly there's more working from home For some.

Speaker 2:

you know, don't forget the kind of things that you and I do For the office, yeah.

Speaker 3:

You can do that kind of thing, but there are many, many jobs for which that is not going to happen and we need to be very clear that everybody needs to get to work wherever it is that they are working and indeed that get to work wherever it is that they are working, and indeed that the face-to-face communication is really important. So I think that the move towards working from home has probably peaked and if it, and it will persist, but it'll be persisting on some days per week, which raises a problem with financing your public transport system, of course, but that's another different problem, I guess. So, because I think people have increasingly become aware that they do need to talk to one another, they need to meet, they need to socialise, and you can't, you know, not everything happens. Only for a small proportion of the population Is it comfortable engaging only on screen.

Speaker 3:

Most of us actually want to get out and about as well. So I think we might have meet, peak that, but it'll be very wobbly along. There'll be a lot of wobbles along any change in trend towards that. Um, and probably post covid, nobody's going to be sufficiently willing to sit on kind of trains that they used to sit on every day, but they might be willing to do it two or three times a week. That's more or less what I find myself doing yeah, yeah, no, exactly, and some some, some.

Speaker 3:

You go on the train. You think, oh no change here.

Speaker 2:

Then yeah, at certain times of the week, yeah, it can, sometimes a week, sometimes a day, and you think oh right, okay yeah, exactly where's my mask?

Speaker 2:

yeah, no, that that blend and that variety is what you know makes life interesting. Interesting, doesn't it? But also those interactions and um that, how much in your work, how much um study of around sort of the psychology of the different generations do you sort of factor into economics? So, because you know there's the kind of stereotypical? I'm a millennial, so what do? What do I think versus a gen z, versus a baby boomer? You know how much of that do you? Do you factor in um when you're looking at you know economic trends and economic forecasting and particularly it came to mind because of the. You know the work from home debate.

Speaker 2:

Um is interesting and you picked up on the word empowerment. You know if you, if you speak to sort of a gen z, they would expect maybe a certain amount more. You know a series of requirements that they would have when taking a job around. You know the quality of life that they want, the hours that they want to work, which is maybe a different or more onerous set requirements than, say, a baby boomer or even a millennial might have had. And how does that kind of change culture around. You know balance between power of employee and the company, for example.

Speaker 3:

I think what's really interesting about all that is it's not empowerment, it's entitlement.

Speaker 2:

Yeah.

Speaker 3:

Yeah.

Speaker 2:

Yeah.

Speaker 3:

And I think that one of the things the government I think new government really going to struggle with is that they think without economic growth you can't raise the taxes and you can't pay for public services, which everybody feels entitled to. But unless people work harder and work more, they're not going to get the growth. So work smart, sure, but actually I think that there's a bit of a kind of crunch, if you like, around how we're going to generate economic growth without actually people having to, kind of, you know, toe the line. I suppose a bit, but I'm a baby boomer so I did very well out of rising property prices. I've passed a lot of that on to my children. But I expect to work hard, I expect to get up and do things and get on it.

Speaker 3:

So there is maybe, but I've lived through several recessions. I've lived through the risk of unemployment. Right, we haven't had the Gen Z, whatever you want to call them. They haven't experienced really a risk of unemployment. Flat wages, nothing terribly exciting happening on the wage front. But to get higher wages you need higher productivity and I think there's a bit of a conundrum there. There is all of these things, people talking about productivity and how we raise productivity, um and, and a lot of it is sort of then. Oh well, you know a bit more technology and a bit more this and a bit more, but at the end of the day, people have to still deliver.

Speaker 3:

that yeah it's not going to. It's not. There's no one to be waived. Maybe I'm, perhaps I'm just old enough and old-fashioned.

Speaker 2:

Yeah, well, if I think it's a real problem yeah, if I was to, and as I am a millennial, but if I was to empathize with the gen z mindset, maybe what's driving some of that? I think there's a, there's a consensus around, you know, climate and the planet, and there's a consensus around well-being and mental health and productivity and burnout, and those themes seem to be kind of coming through as kind of like well it's, it's actually a choice that I'd. Maybe I'm not as driven or I'm not as um then we won't have professional minded yeah, but so that is that's a choice.

Speaker 3:

It's a choice you could. You can go for that choice. But then if you think that growth is important in order to generate the surplus that you can then spend on public services, then you actually do need to get the growth and the economic performance associated with that. And I would actually challenge some of the. You know being busy is actually quite good for your mental health. You know you're not sitting at home trilling your thumbs, feeling anxious about everything.

Speaker 2:

Get out and do things, yeah, having some purpose.

Speaker 3:

Having some purpose. I absolutely agree that there's a lot that purpose-led organisations and organisations which seem to be doing something useful is probably a theme that is coming through, although I am now beginning to read stuff about, you know, people wanting to get back in the city and make loads of money. Not everybody has the same. You know. We can get these generational shifts, but there's still a huge variety of motivation within any generation, as well as between generations, between generations. So I think that a focus on purpose-driven organisations, that can be climate change, it can be support for other organisations, it can be providing services, but at a price which actually pays for that service.

Speaker 3:

All of these are useful. And you know, take a water company. There's sort of this attitude that somehow a profit-making water company is a bad thing, but actually they've invested a lot more in the water services than the previously publicly owned organisations did, and they didn't get set off on the right road by regulators, not by their own attitudes. So, yes, you need to be careful, you need to make sure that regulation is appropriate for the services which are being offered, but here you've got purpose-driven organisations trying to produce clean water and take the shit away.

Speaker 2:

Literally and metaphorically.

Speaker 3:

Literally and metaphorically yeah.

Speaker 2:

Exactly.

Speaker 3:

And several hundred years ago we designed a system to take the shit away which is not actually very effective from the point of view of managing watercourses. But abandoning that well Thames to Hideway is part of trying to abandon that actually and taking less, having a system which intercepts all the sewers so you can remove more of it before it gets in a river. That only costs $4.5 billion. Yeah, exactly which is Well, what's $4.

Speaker 2:

half billion. Yeah, exactly, so, bridget. What do you, what do you think of some of the generically kind of some of the blockers to growth in in infrastructural? Terms yeah and because obviously the infrastructure in theory then enables the private sector to develop housing or offices or whatever it may be. And so how do you see that kind of ecosystem working and delivering the growth that you're talking about?

Speaker 3:

So one of the boards I sit on is the UK Infrastructure Bank, which is publicly owned. It reports into His Majesty's Treasury, it reports into His Majesty's Treasury and we have 22 billion which was allocated as the capital sums to leverage private sector investment, make a small amount of money so that you can recycle the investments, and with a mixture of debt and equity and guarantees and that was set up what, what? Three years ago. Now, it takes time to get that, you know, get everybody employed, and to get a system going, but it's beginning to really, um, kind of be comfortable in its skin, if you like. It tells what it's trying to do, and one of the things that we particularly look for is the thing you know like, for example, calm catcher storage, for example, hydrogen systems, for example, sustainable aviation fuel, where you've got new things which you really need to get going and yet they're very risky. So can you? Is there a tranche of investment that we can provide, paid for by the taxpayer, but with a return, so you get the money back? Not some of it, you won't, but hopefully you get enough on this one that it pays for that one, which would help get some of these new things off the ground, particularly in that zero energy space, but to some extent in regional development as well. We used to call it levelling up, but I don't think we do that anymore I'm not sure what the new term is but absolutely to try and get investments which otherwise people are unwilling to make. We don't have a housing remit, so housing doesn't count, didn't for the National Infrastructure Commission, doesn't for the bank count as investment. But we have made investments in some transport systems, for example buses and zero-carbon buses, and in remediation land remediation, for example and I wonder whether that isn't something which the government could give us some more money to sort of think about, those which would then help close the viability gap. So we're partly about a viability gap and we're partly about a forward financing gap. So in order to make this happen, you need money now, but nobody's willing to give you the money now because it all looks a bit risky. But if you can just close that forward funding gap, you can then get something going, going which will actually become viable. I would like to see us being able to do something of that to close some of the financing gaps on big development viability when just pulling, you know, because you've got all this stuff to pull together and it's going to take a long one. The other problems, of course, for developers is they don't operate the 30-year time scales. How can they? You know they've got to get a payback and you can't sell 300 houses. Well, 300 houses a year, I think, is supposed to be the max on any on a on a on a really big site. But if you want to to do the whole, a whole um local area, it's going to take a long time. Look how long it took Docklands. It's a 30-year program. You're not going to get all of that to happen with private developers. So I think that there's.

Speaker 3:

I'm increasingly thinking I need to think about whether it's more funding for Homes England or whether it's more something like the infrastructure bank where you're thinking. We're thinking actually about payback, not a grant right. It's about an investment which will eventually pay back, which you could maybe we thought about things like roof taxes. They used it in Milton Keynes when they first did that. So for every house you built, you made a contribution which was going to help pay for the infrastructure. So I think we need to be a bit more imaginative.

Speaker 3:

Land value taxation is really difficult to make work, partly because it actually doesn't. You know, it'll help fill a gap, but it won't fill the whole thing. It won't pay for a new train line, for example. There's just not enough in there to make that work. I used to be quite keen on land value taxation and then I became a bit more skeptical that the amount of administration and measurement and argument, if you like, was going to be was was worth the benefit that you would get out of it yeah, yeah, just just sort of stepping back for a second bridget for you personally, why?

Speaker 2:

why have you kind of dedicated your life to, to economics and infrastructure and and what? What's that kind of um? Yeah do you have a sense of what you've done, why you've done that or what's driven you to do that?

Speaker 3:

it's completely accidental. Um, I went to study economics because I'd never studied economics and I thought it might be interesting. So I did PPE philosophy, politics and economics at Oxford, knowing nothing about any of them. When I finished my degree, I wanted to stay in Oxford because I was getting married. That's the only reason. So I went and talked to somebody and said go and do the MPhil in economics. I said all right then. So I became an economist entirely by accident. I didn't have a game plan. I still don't have a game plan.

Speaker 3:

The word dedicated, I don't think that's me. So, and then I was teaching and then thinking, no, I don't quite like this, so I don't think I quite believe it, but I don't know how to do anything else. So went out into the consultancy world and because of you know, as things change, as things happened, I became fascinated by infrastructure and by property. When I discovered how properties were valued, for example, I thought, really, you do it that way, oh, that's interesting. So most of it is because of thinking oh, either that's an interesting problem, I don't know how to do it, let's have a think or that's an interesting problem and I don't think you should be doing it that way, so challenging the way that we were evaluating or appraising transport investments, for example, to take into account more things, was thinking that doesn't make any sense the way that we're doing it. We need to take into account more things. Let's think about how we would do that and then becoming fascinated by the challenge of persuading people that we should do it differently. So I suppose it's the gentle art of persuasion that I'm really kind of fascinated by.

Speaker 3:

And then my interest to sort of stick with infrastructure, I suppose in a way, because it affects everybody, whether it's the ability to have clean water, to have the sewage empty, the, the um energy, you know all of that. It's absolutely crucial. I I wanted to put soil into the infrastructure thing because, um, the ability to grow food is also very important, so, yeah, so I suppose it's that fundamental thing. It's also it's long-term investment, it's geographically specific and neither of those things were dealt very well by standard economics. So I suppose, yeah, I'm interested in changing economics, partly because of the way it's used in public policy, but equally I'm interested in changing economics, partly because of the way it's used in public policy, but equally I'm interested in those sort of long term, specific things which then turn out not to be dealt with very well by standard economics. Time and space are really it's really agnostic about time and space.

Speaker 2:

But we're not. Yeah, do see that. Uh, the field of economics is it becoming more I was gonna use the word practical, maybe that's not, that's not the right expression but less theoretical, more about kind of what's actually kind of happening. You mentioned the earlier about where you go.

Speaker 3:

Yeah, yeah, some areas of academic life. Now I don't think it has, but I mean, I don't actually have that much to do with theoretical economics these days. It's more trying to problem solve, and in the process there may be bits that I need to kind of. You know, I find if I'm trying to solve a particular problem, I might well find that the way that I thought about in some area of government rests on some piece of theory that I think is wrong or needs developing or something. So then I'll kind of go after it if you like, but it's more. I'm practical yet. So I will be responding to the stuff that I'm dealing with rather than trying to produce a new theory of everything Exactly.

Speaker 2:

There's a book. There isn't there.

Speaker 3:

There is a book there.

Speaker 2:

Good, bridget, I'm really grateful for you.

Speaker 3:

Well, they keep finding new elements of the theory of everything and not being sure they've got one. So you know, if you can't do it for physics, we certainly can't do it for economics.

Speaker 2:

Yeah exactly, Bridget. I'm really grateful for you giving your time to have this conversation.

Speaker 3:

I've enjoyed it. It's good.

Speaker 2:

Thank you, thank you.

Speaker 1:

Thank you for listening to the Grow Places podcast. For more information, visit growplacescom and follow us at. We Grow Places across all social channels. See you next time.