The British government presented its plans for brutal spending cuts today, slashing nearly half a million public sector jobs and taking the axe to welfare as it battles a record deficit.
Finance minister George Osborne said the Conservative-Liberal Democrat coalition would make "unavoidable" cuts of £83 billion (Dh480bn) by 2014-15 under the comprehensive spending review.
"Today is the day that Britain steps back from the brink. It is a hard road but it leads to a better future," Mr Osborne told parliament as he delivered the review.
Prime minister David Cameron's coalition came to power in May saying it had to take drastic action to to eliminate Britain's £154.7bn deficit - a legacy of the previous Labour government and the recession.
"The action we have taken since May has taken Britain out of the financial danger zone," Mr Osborne said.
He confirmed the government would cut 490,000 public sector jobs over four years. News of the job losses leaked when a minister was photographed last night reading confidential briefing papers in his car.
Mr Osborne said the job losses were "unavoidable when the country has run out of money".
Government departments saw their budgets cut, with the Foreign Office achieving savings of 24 per cent by reducing London-based diplomats, Osborne said.
Police spending would fall by four per cent each year while the budgets of the Home Office and Ministry of Justice would each fall by six per cent a year, he added.
Mr Osborne also announced measures to tackle the huge welfare budget, which accounts for a third of state spending, saying that the state pension age would rise to 66 by 2020, saving more than £5bn a year.
The minister, known as the Chancellor of the Exchequer, said the government was ushering in the "greatest reform to the welfare state for a generation".
Britain's Queen Elizabeth II will also feel the pinch, with royal household spending falling by 14 per cent in 2012/2013 and the queen agreeing to a one-year suspension of government payments under the so-called 'civil list'.
The government had already promised that healthcare and international development aid would be protected from the cuts.
The Labour opposition, unions and some economists say the cuts are too steep and risk plunging the fragile economy back into recession, from which it emerged at the end of last year.
The government is "taking the biggest gamble in a generation with growth, with people's jobs and people's livelihoods," the leader of the opposition Labour party, Ed Miliband, told parliament shortly before the announcement.
The coalition started the cuts process yesterday, announcing that it would shrink the country's armed forces, scrap key assets like a flagship aircraft carrier and reduce the defence budget by eight per cent.
Mr Cameron said 17,000 service personnel would go from the British Army, Royal Air Force and Royal Navy by 2015 - but vowed there would be "no cut whatsoever" to the level of support for forces in Afghanistan.
The International Monetary Fund has endorsed Osborne's spending cuts plans, and European governments facing major protests at their own austerity plans are watching closely to see if Britain's work.
Mr Osborne's announcement today came as official data showed British public sector overspending widened in September to £16.2bn, a record monthly high.
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Dubai World Cup factbox
Most wins by a trainer: Godolphin’s Saeed bin Suroor(9)
Most wins by a jockey: Jerry Bailey(4)
Most wins by an owner: Godolphin(9)
Most wins by a horse: Godolphin’s Thunder Snow(2)
Essentials
The flights
Etihad (etihad.ae) and flydubai (flydubai.com) fly direct to Baku three times a week from Dh1,250 return, including taxes.
The stay
A seven-night “Fundamental Detox” programme at the Chenot Palace (chenotpalace.com/en) costs from €3,000 (Dh13,197) per person, including taxes, accommodation, 3 medical consultations, 2 nutritional consultations, a detox diet, a body composition analysis, a bio-energetic check-up, four Chenot bio-energetic treatments, six Chenot energetic massages, six hydro-aromatherapy treatments, six phyto-mud treatments, six hydro-jet treatments and access to the gym, indoor pool, sauna and steam room. Additional tests and treatments cost extra.
Specs
Engine: Dual-motor all-wheel-drive electric
Range: Up to 610km
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The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
Brief scores:
Manchester United 4
Young 13', Mata 28', Lukaku 42', Rashford 82'
Fulham 1
Kamara 67' (pen),
Red card: Anguissa (68')
Man of the match: Juan Mata (Man Utd)
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Match info
Wolves 0
Arsenal 2 (Saka 43', Lacazette 85')
Man of the match: Shkodran Mustafi (Arsenal)
Blackpink World Tour [Born Pink] In Cinemas
Starring: Rose, Jisoo, Jennie, Lisa
Directors: Min Geun, Oh Yoon-Dong
Rating: 3/5
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.”
Manchester City transfers:
OUTS
Pablo Zabaleta, Bacary Sagna, Gael Clichy, Willy Caballero and Jesus Navas (all released)
INS
Ederson (Benfica) £34.7m, Bernardo Silva (Monaco) £43m
ON THEIR WAY OUT?
Joe Hart, Eliaquim Mangala, Samir Nasri, Wilfried Bony, Fabian Delph, Nolito and Kelechi Iheanacho
ON THEIR WAY IN?
Dani Alves (Juventus), Alexis Sanchez (Arsenal)