UK Prime Minister Boris Johnson during last week's visit to Hilltop Honey in Newtown, Powys, Wales. PA Images
UK Prime Minister Boris Johnson during last week's visit to Hilltop Honey in Newtown, Powys, Wales. PA Images
UK Prime Minister Boris Johnson during last week's visit to Hilltop Honey in Newtown, Powys, Wales. PA Images
UK Prime Minister Boris Johnson during last week's visit to Hilltop Honey in Newtown, Powys, Wales. PA Images


'Partygate' has degraded more than just Boris Johnson's image


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May 23, 2022

Former US president Donald Trump famously said he could shoot someone on Fifth Avenue in New York City and he wouldn’t lose any supporters. PartyGate scandals in the UK are in the endgame and Prime Minister Boris Johnson is in a similar mode of defiance.

The man who was once likened to a "cornered rat" – when troubled he would tear anything apart to escape – faces the download of the Sue Gray report into a party culture at Downing Street to conclude the saga. However it plays out, the whole charade has permanently degraded the institutional strengths that Britain used to rely on for its outsized role in the world.

The country was able to parade a conceit that its rules were clearer, perhaps even cleaner, than all the others. And a stickler-like devotion to doing things the right way was its prime virtue. The long list of parties or gatherings in Downing Street during the series of lockdowns and other social restrictions to cope with Covid-19 now stands objectively as a moral crisis for Mr Johnson and his administration.

The handling of the investigation has turned those into confidence-shredding event for British institution.

The whole saga has coloured how the Johnson government goes about its attempt to govern the country

Consider the American-style political policing that cost £460,000 (almost $575,000) and resulted in 126 fines. This process saw more women than men fined and a disproportionate number of junior staff. Young people who work in Downing Street are not very well paid and the weight of the fines has been heavy for some to bear.

Abruptly the police then closed down the investigation. The suggestion is that, where photographs existed, the cases were easier to solve and so once the new images ran out, so did the police's will to press penalties. Having good lawyers helped and some of those who avoided fines can undoubtedly thank the lawyers for arguing that they were in effect in work mode while in attendance at a party.

The police mistimed every move in the investigation. By announcing that they were getting involved in the first place, they derailed Mrs Gray’s first attempt to get to the heart of the matter. Months have since elapsed in which the public fatigue with the whole issue means Mr Johnson’s political share price now has scandal baked in.

The whole saga has coloured how the Johnson government goes about its attempt to govern the country. Henchman Jacob Rees Mogg has launched a war on the civil service, figuring that few in the public harbour much affinity for the hard-partying bureaucratic elite.

British Minister for Brexit Opportunities Jacob Rees-Mogg speaks at the Conservative Party Spring Conference in Blackpool in March. Reuters
British Minister for Brexit Opportunities Jacob Rees-Mogg speaks at the Conservative Party Spring Conference in Blackpool in March. Reuters

The public was ripened up for the culling exercise by Mr Rees Mogg acting like a 1950s man with a clipboard walking around Whitehall offices checking on how many staff were staying away working from home. Then he came out with his goal of saving more than £5 billion in public administration costs with a reduction of tens of thousands of civil servants from the Crown payroll. The idea is to raise the machine’s efficacy, governance, accountability and return functions to ministers from the arms-length bodies.

It will be hard to convince those at the nub of the cuts that this is anything but efforts at weakening an already weak bureaucracy.

Meanwhile, among the political ranks of the dominant Conservatives, a new era of sleaze has broken out with a handful of seats at risk as MPs accused of sexual abuse are forced to resign.

In contrast to the last episode of scandal and disgrace in the 1990s under former prime minister John Major, the current incumbent is among the most tainted. The idea that the civil servants and the institutions have lost stature is to Mr Johnson’s benefit because he can exploit its weakness.

To address the public backlash in 1995, a leading judge came up with the so-called “Nolan Principles of Public Life”. These are still available on the government website and designed to act as a yardstick for official behaviour. The seven are: Selflessness, Integrity, Objectivity, Accountability, Openness, Honesty and Leadership.

One consequence of having Mr Johnson in Downing Street is that the UK has been cast adrift from the moorings of the standards setting how the constitutional and political system works. Brexit, Covid-19 and the Ukraine war have happened in quick succession but not disguised the disintegration of the system.

PartyGate is the defining moment for Mr Johnson’s Britain because it calcified his leadership to rely on his, and only his, lieutenants by filling time pursuing populist pledges. The gamble is that these pledges resonate at a deep level and sustain support in the face of failures and fractures on the Conservative party’s backbenches in Parliament.

Mr Johnson is right where he wants to be, at the middle of the equilibrium of a broken political scene. Nothing could sum this up better than the predicament of Keir Starmer, the leader of the opposition.

After playing hard for Mr Johnson’s resignation over PartyGate, a gathering that Mr Starmer led has come under renewed scrutiny. The last police investigation still open is looking into if the rules were broken at his late night curry for 20 people.

If he is fined, he has said he will resign. The irony must be so precious for the already-fined but impervious Prime Minister. Politics at its most rat-like.

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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.”

Updated: May 23, 2022, 4:00 AM