L&G CEO: 2019 is full of opportunities but Irish backstop could spark a recession

Michael Lloyd

February 13, 2019

If the UK doesn’t sort out the Irish backstop in Brexit negotiations there could be a recession, Nigel Wilson, group chief executive of Legal & General, has warned.

However, he said he was still very optimistic about business in 2019.

Wilson (pictured), who was speaking at L&G’s Business Quality Awards last week, said: “It’s a tiny little problem, and as a business problem we could sort it out in a very short period of time, but we risk plunging the whole of the economies into a recession if we don’t get ourselves over the line, both from a European perspective and UK perspective.

“But the world is still an amazing place, there’s plenty of business to do. The media at the moment is just so much doom and gloom but that’s not what we’re seeing. Legal & General has a tremendously positive view on the world.

“We believe the UK remains a great place to invest and we will continue to invest in all our businesses. Lots of industries are in decline while ours has huge upside opportunities.

“I’m incredibly optimistic not just for Legal & General but I think the political cloud lying across the United States, the UK and Ireland and Europe will be lifted in the next year and as a consequence of that we’ve seen real opportunities for growth not just in Legal and General but for all business in this space.”

He said there’s about £224bn of trade between the UK and Europe, £220bn largely through the English ports while £4bn of the £224bn goes across the Irish border.

Wilson pointed to rates still being very low and low unemployment figures as positives for the year ahead, while he saw underinvested cities as a huge opportunity.

He added: “We’ve been talking about AI replacing jobs for a long time and mass unemployment as a consequence of that. We now have 32.5 million people working in Great Britain, which is higher than we’ve ever been, and unemployment is at a 40-year low.

“There’s this massive upside opportunity we have at the moment that we’re not embracing. We know there’s huge underinvestment right across Britain, from Glasgow, Edinburgh, Newcastle, Leeds, Manchester, Birmingham.

“We’ve invested about £15bn so far in the regeneration of those cities and could easily invest another £1bn. Rates are incredibly low. People are able to invest.

“Politicians have to step up and figure out what’s the right thing to do from a societal point of view and if they do that there’s masses of pent up demand for investment and we’ll see better jobs being created, a better society being created and a lot more houses being built.”

Wilson said that there’s massive tech changes across the industry, adding that L&G has embraced technology and made major changes to its business model over the last 10 years.

Wilson said: “We have to be absolutely relentless in continuing to change our model and serve customers better. We can’t take it for granted at all. We need to work hard to get to customers. Ours and everyone’s’ business has to change.”

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