British Challenger 2 tanks on exercise in Estonia alongside Estonian, Danish and French forces. Nato countries are looking to increase defence budgets following Russia's invasion of Ukraine. PA
British Challenger 2 tanks on exercise in Estonia alongside Estonian, Danish and French forces. Nato countries are looking to increase defence budgets following Russia's invasion of Ukraine. PA
British Challenger 2 tanks on exercise in Estonia alongside Estonian, Danish and French forces. Nato countries are looking to increase defence budgets following Russia's invasion of Ukraine. PA
British Challenger 2 tanks on exercise in Estonia alongside Estonian, Danish and French forces. Nato countries are looking to increase defence budgets following Russia's invasion of Ukraine. PA

British government warned not to axe 10,000 troops


Thomas Harding
  • English
  • Arabic

Britain’s opposition leader has hinted at support for a major rise in defence spending to combat the growing threat from Russia.

Sir Keir Starmer urged the government to reverse its decision to cut 10,000 personnel from the armed forces at a time when Nato has a major conflict on its borders in Ukraine.

The Labour leader suggested that he could back a massive military cash rise to 3 per cent of GDP that would take Britain’s defence budget from £45 billion to £66 billion ($83bn), making it the third highest spender behind China and America.

There is growing unease in the Conservative Party at the potential cuts to British forces while war is raging on the continent.

Tobias Ellwood, chairman of the Commons defence committee, argued that the government had to “wake up” to Russian belligerence and called for the 3 per cent rise.

Asked if his party would support the Conservative's proposal Sir Keir said it would be considered.

“I do think the government is going to have to come back to Parliament and look again at defence spending and I know many Conservative MPs think that as well,” he told the BBC.

“I would also say the government at the moment is proposing cutting a further 10,000 from our armed services and I think they are wrong to do that and I would call on them not to do it.”

He added that there was a now a “clamour” for the government to rapidly review “defence spending and the defence strategy”.

The Land Forces Day celebrations in Bucharest, Romania. The country is looking to modernise its forces along with other Nato members in light of Russian aggression. Getty Images
The Land Forces Day celebrations in Bucharest, Romania. The country is looking to modernise its forces along with other Nato members in light of Russian aggression. Getty Images

Other countries in Europe have already promised to increase their defence budgets, particularly those bordering Russia.

Poland’s government stated last month that it would move from 2.5 to 3 per cent of GDP while doubling its personnel to 250,000 troops.

Germany has promised a one-off $112 billion rise but has yet to make a commitment to take its defence budget from 1.5 to 2 per cent of GDP.

Even before Ukraine a recent International Institute of Strategic Studies (IISS) report found that European defence spending has grown 4.8 per cent in real terms in 2021, “more than any other region” as a result of Russian aggression.

Britain announced a significant defence increase last year, but like many other countries it has seen a slide in defence finances since the 1950s when it accounted for 8 per cent of GDP.

Ben Wallace, the defence secretary, announced last March a cut of 4,000 soldiers to 72,500 in the British Army, the smallest it has been in 300 years.

Controversially the plan also involved reducing the number of tanks from 227 to 148 upgraded Challenger 3s. The Ukraine war has proven the requirement for heavy armour when used correctly.

Britain raised its defence spending to Kyiv on Tuesday by a further £300 million making a total of £500 million since the war began.

Sir Keir welcomed the announcement. “We support the provision of military equipment and the in principle position of all political parties that we stand up for Ukraine," he said. "Standing against Russian aggression is very important."

Who was Alfred Nobel?

The Nobel Prize was created by wealthy Swedish chemist and entrepreneur Alfred Nobel.

  • In his will he dictated that the bulk of his estate should be used to fund "prizes to those who, during the preceding year, have conferred the greatest benefit to humankind".
  • Nobel is best known as the inventor of dynamite, but also wrote poetry and drama and could speak Russian, French, English and German by the age of 17. The five original prize categories reflect the interests closest to his heart.
  • Nobel died in 1896 but it took until 1901, following a legal battle over his will, before the first prizes were awarded.
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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.”

Company profile

Name:​ One Good Thing ​

Founders:​ Bridgett Lau and Micheal Cooke​

Based in:​ Dubai​​ 

Sector:​ e-commerce​

Size: 5​ employees

Stage: ​Looking for seed funding

Investors:​ ​Self-funded and seeking external investors

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Updated: May 03, 2022, 10:43 AM