Conservative leadership candidate Rishi Sunak said he would not make promises he could not keep when it came to the cost-of-living crisis as he compared his approach to Margaret Thatcher's readiness to say things "that may have been difficult to hear, but were right for the country".
The former chancellor acknowledged Wednesday he is the underdog in the race to become the next prime minister but insisted it was important the public had the chance to debate the "very clear difference" between the two candidates' approaches.
Liz Truss defended herself against accusations her economic proposals were dangerous, saying she was challenging “Treasury orthodoxy”, during the latest hustings event as Mr Sunak used the event to say that millions of UK households could face “destitution” without further aid this winter.
The cost-of living-crisis dominated the latest debate as both candidates clashed at the latest leadership hustings at Birmingham’s National Exhibition Centre.
“This whole language of ‘unfunded’ tax cuts implies the static model, the so-called abacus economics that the Treasury orthodoxy has promoted for years, but it hasn’t worked in our economy because what we have ended up with is high tax, high spending and low growth,” Ms Truss told the audience of Tory members.
“That is not a sustainable model for Britain’s future.”
Ms Truss sought to pitch her proposals as a new economic model before the hustings, claiming that “business as usual” could not go on.
Chancellor Nadhim Zahawi claimed that Ms Truss “understands the economics of growth” as he introduced the foreign secretary.
UK Conservatives on the leadership campaign trail — in pictures
The Sunak campaign has attacked Ms Truss’s economic credibility in the final weeks of the race, after reports suggested she will not ask the independent Office for Budget Responsibility for a forecast before the measures she is planning for next month, if she becomes prime minister.
Conservative Treasury Select Committee chairman Mel Stride, who is backing Mr Sunak, has written to the chancellor and the Office for Budget Responsibility to ask whether work is being carried out to prepare for a potential emergency budget.
During the hustings, Ms Truss criticised the media for “constantly” making comparisons between her and former prime minister Margaret Thatcher, saying that the UK was in a “very different situation” from when the Iron Lady came to power in 1979.
Everything you need to know about Liz Truss — video
But her rival welcomed the support of Baroness Thatcher’s Cabinet ministers.
“I think unfunded tax cuts are wrong and do you know what?” said Mr Sunak.
“Her [Thatcher’s] chancellor Nigel Lawson agrees with me, the head of her policy unit agrees with me, Norman Lamont agrees with me.
“All of these people who understood Margaret Thatcher’s economics are supporting my economic plan because it is the right one for our country and it is a Conservative approach to managing the economy.”
Everything you need to know about Rishi Sunak — video
The former chancellor was earlier forced to fend off the suggestion that he should quit the contest to allow the next prime minister to take charge of the worsening economic situation as soon as possible.
He told broadcasters that tax cuts “may sound attractive at first, but if they risk stoking inflation and actually do nothing to help poorer people and pensioners, then they actually are going to be bad for everyone”.
“I don’t want to put fuel on the fire, I don’t think that is the right approach,” he added.
Mr Sunak also said that he would “fix” the energy market so that electricity companies would not be able to “charge us a very high price based on what’s going on in the natural gas markets”.
Outside the exhibition centre, about 40 protesters gathered at the hustings, chanting “Tory scum — out of Brum”, while party members queued to get in.
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Graduated from the American University of Sharjah
She is the eldest of three brothers and two sisters
Has helped solve 15 cases of electric shocks
Enjoys travelling, reading and horse riding
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.”
