British prime minister Theresa May announced on April 18, 2017 that she was calling for a general election to be held on June 8. Dan Kitwood / Getty Images
British prime minister Theresa May announced on April 18, 2017 that she was calling for a general election to be held on June 8. Dan Kitwood / Getty Images
British prime minister Theresa May announced on April 18, 2017 that she was calling for a general election to be held on June 8. Dan Kitwood / Getty Images
British prime minister Theresa May announced on April 18, 2017 that she was calling for a general election to be held on June 8. Dan Kitwood / Getty Images

Britain PM Theresa May calls for snap general election


Colin Randall
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Britain’s prime minister Theresa May sprang a major surprise on Tuesday by calling a snap general election intended to remove parliamentary obstruction to her plans for implementing Brexit.

“The country is coming together but Westminster [the seat of the UK parliament] is not,” Mrs May declared outside her official residence, 10 Downing Street, referring to opposition attempts to frustrate her strategy for UK withdrawal from the European Union.

Any lingering doubt over Brexit, the process for which was formally triggered last month, would be removed by a victory for her Conservative party on June 8, the date chosen by the government as polling day.

It would also take advantage of disarray among the opposition by extending her own mandate to 2022.

Claiming the UK economy had triumphed over the gloomy prediction of “Remainers”, with upbeat news on consumer confidence, employment and growth, she said: “Britain is leaving the European Union and there can be no turning back.”

Last June’s referendum vote, the election of Donald Trump as US president and developments in some of Britain’s neighbouring European countries have shown western public opinion to be volatile, weakening the mainstream parties that have traditionally governed.

But Mrs May’s Conservatives are currently ahead of Labour, the main opposition party, by such a substantial margin — 18 per cent on recent polling — that they start the campaign as clear favourites to win comfortably.

Given the prime minister’s need to strengthen links with non-EU nations and minimise any impact of Brexit on trading with Europe, victory for her would ensure determined efforts to build on close relations with the Arabian Gulf.

Alistair Burt, a former Middle East minister who chairs the UAE All Party Parliamentary Group in the UK, wrote in The National this week that with more than 120,000 British nationals living in "and making a fantastic contribution to the success of the UAE, as well as a million tourists visiting the country last year", there were obvious reasons why the bond deserved to be fostered.

Mr Burt, like Mrs May, campaigned for Remain but accepts the referendum result as a binding expression of popular will.

The prime minister on Tuesday reaffirmed the need for such ties with “old friends” to be developed.

“We want a deep and special partnership between a strong and successful European Union and a UK that is free to chart its own way in the world,” she said. “That means we will regain control of our own money, our own laws and our own borders and be free to strike trade deals with old friends and new partners all around the world.”

On obstacles to a smooth divorce from the EU, she cited Labour threats to vote against the final agreement reached with the EU and the minority Liberal Democrats’ pledge “to grind the business of government to a standstill”.

“The Scottish National Party (SNP) say they will vote against the legislation that formally repeals Britain’s membership,” she said. “And unelected members of the House of Lords have vowed to fight us every step of the way.”

With the Conservatives currently governing with a slim working majority of 17 seats at most, Mrs May is also open to challenge from dissident members of her own party.

“Our opponents believe because the government’s majority is so small, that our resolve will weaken and that they can force us to change course,” she said. “They are wrong. They underestimate our determination to get the job done and I am not prepared to let them endanger the security of millions of working people.”

Without an election, she said, political “game-playing” would continue, putting the toughest phase of withdrawal negotiations on collision course with the next scheduled election in 2020.

“Division in Westminster will risk our ability to make a success of Brexit and cause damaging uncertainty and instability,” she said, accepting that bringing the date forward represented a change in her own view.

Mrs May said the choice facing Britain was between her own “strong leadership” and a “weak and unstable” government led by Labour’s embattled leader Jeremy Corbyn in coalition with two parties bitterly opposed to Brexit, the Liberal Democrats and the Scottish Nationalist Party.

Last June’s decision to leave the EU was carried by 51.9 per cent to 48.1, a margin of under 1.3 million voters. A sizeable proportion of those who wanted Britain to remain a member state continue to make their feelings known.

But Mr Corbyn has proved an unpopular Labour leader and was blamed by some Remain factions for being timid in opposing Brexit during the referendum campaign.

He welcomed Mrs May’s announcement, effectively ensuring that the necessary parliamentary majority for an interim election would be secured on Wednesday.

But one prominent pro-Labour political commentator, Kevin Maguire, said there was no chance of Mr Corbyn turning the snap election into a re-run of the referendum.

He also tweeted the view of one Labour source: “The silver lining is we’ll be shot of Corbyn earlier.”

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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.”