UK’s standing in the world has diminished, Tony Blair says in BBC interview

Former British prime minister Tony Blair believes the country's standing in the world has diminished over the past decade and that Keir Starmer has come to power at a time of “anxiety” for the nation.

Mr Blair made the remark during a wide-ranging interview with the BBC scheduled to be broadcast on Wednesday night, which comes after Mr Starmer said “things will get worse before they get better”.

The BBC's Amol Rajan asked Mr Blair – the last Labour Party leader before Mr Starmer to win a general election – if he thought the new Prime Minister had a “mandate” to govern, or if his majority in this summer’s poll was due more to apathy with the Conservative Party.

“Yeah, I think he’s got a mandate, of course. I mean, I think what you’re saying, not in these words, is that the zeitgeist is different,” Mr Blair said.

The MPs in the new Labour cabinet – in pictures

He said there was a “pretty optimistic” spirit across the country when he came to power near the turn of the millennium, as he attempted to “lead the change” on racial and sex equality and devolution.

In contrast, he described the mood facing Mr Starmer's government in the UK today as “very different”. “I think it’s more anxious. But it’s still a zeitgeist,” he said. “And I think in the new government coming in and people wanting a sense of stability, wanting long-term problems solved and sorted out, you know … for sure there’s a mandate there.”

During the interview, Mr Blair was asked to describe Britain’s standing in the world compared with 20 years ago when he was prime minister.

Mr Blair said that his foreign policy was “based on three pillars”: being the US’s “strongest ally”, being a “key” player in Europe, and the now-scrapped Department for International Development.

“The truth of the matter is we are weaker on all three now. I mean, the Department of International Development is gone. Its budget’s been cut. We’re out of Europe, obviously. So we are no longer key players there,” he added.

“Are we America’s strongest ally? Well, that’s the question today. I mean, I think that our security and military still have a very, very close relationship, but politically, it's a lot more open to question.”

During the interview, Mr Blair was also asked about his views on immigration policy and extremism, and he claimed the Vladimir Putin he knew while serving as prime minister “would never have engaged in such a folly as Ukraine”.

Mr Starmer set a sober tone before Parliament’s return from the summer recess, in a speech in which he warned that the government’s coming Budget would be “painful” and asked the country to “accept short-term pain for long-term good”.

He also said there was a need to be “honest with people about the choices that we face”.

In a phrase which somewhat echoed the pop song Things Can Only Get Better by D: Ream, used by Mr Blair’s New Labour in their 1997 election campaign, Mr Starmer added: “How tough this will be and, frankly, things will get worse before they get better.”

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

UK’s standing in the world has diminished, Tony Blair says in BBC interview

Former prime minister says his foreign policy was very different to the one Labour has taken over

The MPs in the new Labour cabinet – in pictures