In the countryside of Cambridgeshire, a British semiconductor start-up was eager to expand beyond its lab and open a manufacturing base. However, the company’s plans came with unexpected costs to bring enough electricity to the new site with a potential bill of one million pounds. Paragraf, the company behind the endeavor, manufactures chips using graphene, an ultrathin carbon. Their devices can be used to check for defects in electric vehicle batteries to prevent fires or work in quantum computers. After acquiring the site in 2023, Paragraf made plans to ramp up its weekly manufacturing capabilities from tens of thousands of devices to millions. Unfortunately, the cost of increasing the power supply to the location is diverting money and time from hiring and equipment purchases, according to Simon Thomas, Paragraf’s chief executive. Delays are frustrating and affecting the company’s pace and potential future success, he commented.

Up and down the country, complaints about the lack of investment in Britain are reaching a peak after more than a decade of low economic growth and wage stagnation. Raoul Ruparel, the director for Boston Consulting Group’s Center for Growth, noted, “There’s an ‘overriding sense of things not working’ in the economy.” Analysts and lawmakers hope that accelerating electrical grid upgrades and making it easier for new construction to win planning approval will reignite the economy, which is expected to essentially flatline this year.

Tackling the logjams

The problem is substantial: In the past five years, the number of applications to connect to the electricity grid has increased tenfold, leading to waits of up to 15 years. The underinvestment is restricting the flow of cheap energy from Scottish wind farms to population centers in England and adding to the delays for those with high power needs, like laboratories and factories. Planning and grid connections are fundamental to a productive and efficient economy, according to Mr. Ruparel. These topics have taken on mainstream importance and are key elements in the push to revive growth. Paragraf, a company with about 120 employees, “want to go faster than some of the infrastructure will let us,” said Natasha Conway, the chip maker’s research director.

The company, with about 120 employees, makes sensors that are used to measure magnetic fields. Attracted by the CHIPS Act, which provides subsidies to semiconductor makers, it had considered setting up production in the United States. In the end, though, Mr. Thomas chose to stick to Britain and establish a domestic manufacturing business. “Securing enough electricity has not been easy,” he said.

Inability to get major projects built, such as the government’s decision in October to cut a key part of a planned high-speed rail line, affects “the view of investors as to whether or not the U.K. is a worthwhile place to come,” said John Armitt, the chair of the commission. “There has got to be more to Britain in the future than that.”

Rules discourage investment

One way the British government turned off investors was by changing planning measures in 2015, and tightening them further in 2018, so that a single objection could upend a planning application — essentially banning onshore wind in England. John Fairlie was a consultant in the wind industry at the time.

Mr. Fairlie is currently a managing director at AWGroup and noted ““policy has changed, but it has not changed enough.” The turbine, which had been in the planning process as rules were tightening, was able to win approval in 2017. Since then, the main source of delays has been securing a grid connection. As Britain seeks to escape from a long stretch of slow growth and lost productivity, companies, economists and other experts say the government urgently needs to commit to these reforms.