British Prime Minister Rishi Sunak on the first day of the Conservative Party Conference, on October 01, in Manchester, England. Getty Images
British Prime Minister Rishi Sunak on the first day of the Conservative Party Conference, on October 01, in Manchester, England. Getty Images
British Prime Minister Rishi Sunak on the first day of the Conservative Party Conference, on October 01, in Manchester, England. Getty Images
British Prime Minister Rishi Sunak on the first day of the Conservative Party Conference, on October 01, in Manchester, England. Getty Images


Sunak's sudden interest in cars smacks of desperation


  • English
  • Arabic

October 04, 2023

Outside a restaurant in Little Italy, that area of lovely restaurants in New York, I once noticed a memorably menacing bumper sticker on a shiny black limousine. It said: “You Touch My Car – I Smash Your Face.” It was (we can agree) a joke as well as a warning. Car drivers can be very protective of the piece of metal, glass and rubber that gets them from A to B.

This week at the Conservative party conference, British Prime Minister Rishi Sunak is not quite echoing the threat on the limousine, but in the language of the tabloid newspaper headlines that he seems to crave, he announced he is “slamming the brakes on the war on motorists”. Outside the British tabloid press, in real life, there is no “war” on British motorists, although the Welsh government has lowered speed limits on a third of roads to 20mph as a safety measure.

Pedestrians – and car drivers are at times pedestrians too – are five times more likely to die if hit by a car going at 30mph than at 20mph. The 20mph limit is in place – or will be soon – in areas of England, Scotland and Wales where up to 28 million people live. I’ve experienced this new speed limit in parts of London, enforced by cameras and warning signs. During central London’s peak working and commuting day – roughly between 7am and 7pm – it’s difficult to go as fast as 20mph because of traffic congestion.

Signs limit traffic to 20 miles per hour on a road in London, on October 01. EPA
Signs limit traffic to 20 miles per hour on a road in London, on October 01. EPA

But recently driving through London to the airport at 5am, on empty roads with no traffic, I did have to keep telling myself to slow down. Most drivers, including me, are tempted by an open road to put their foot down on the accelerator. And the Prime Minister’s sudden interest in cars smacks of desperation even if it is politically interesting.

He is not focusing, for example, on improving public transport which – outside London – can be awful. In London, huge investment in the new Elizabeth Underground line plus co-ordination of trains, the Underground and bus services have paid off. But public transport demands public money, planning, positive thinking and time. Public transport in small towns or rural areas of England and Wales is often so bad that millions have no alternative but to use their cars.

He is not focusing, for example, on improving public transport which – outside London – can be awful.

Mr Sunak sees here the opportunity for votes because his Conservative party surprisingly won a by-election in Boris Johnson’s old constituency on the outskirts of London, after loudly making an issue out of the extending the Ultra Low Emission Zone – or Ulez – which charges drivers for older and more polluting vehicles.

This touched a nerve with some car owners. New Ulez enforcement cameras have been vandalised. They record the number plates of cars to check against a database that shows whether the vehicle is in the most polluting category, in which case the driver can be fined.

London’s Metropolitan Police put the vandalism figure at 160 cameras stolen and 350 damaged. The political question, however, is whether Mr Sunak has found in the gripes of motorists a vote winner for next year’s general election alongside his significant weakening of climate change reduction policies and the fact that he has given the go-ahead for the development of a new oilfield off Shetland.

Presumably, Conservative advisers have tested these measures in private polling or focus groups and found a degree of popularity. Yet there’s a catch. We have, metaphorically at least, been down this road before, faced with a revolt by some motorists over changes to the law – changes that today seem merely common sense.

In the 1970s, the British government controversially enforced the wearing of seat belts. Recently released government communications from that time show that English police forces thought enforcing the new seatbelt law would be a waste of their valuable time. Motoring organisations including the Royal Automobile Club (RAC) lobbied against seat belts.

In papers from the British National Archives, the RAC noted in 1973: "The time for consideration of such a drastic measure has not yet been reached ... [it would be] premature at the present time ... strict enforcement ... would have undesirable effects on relations between police and public, many of whom would justifiably resent prosecutions and convictions ... relating to failure to take precautions which in no way affect the safety of any other road users.”

Now 50 years later, Mr Sunak may be correct that there are votes for his party from some disgruntled motorists. It’s certainly easier to drop speed or environmental restrictions than to put real investment in improving public transport. But like the campaigners against seat belts in 1973, Mr Sunak is putting his party on the wrong side of history.

The respected American pollster Frank Luntz, who’s attending the Conservative party conference, has publicly suggested the party’s "culture wars" rhetoric is a vote loser. He says things look so bad that Conservative MPs with a majority of less than 8,000 “might want to look for another job” before the next election. Mr Luntz is always worth listening to.

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.”

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Updated: October 04, 2023, 7:00 AM