Boris Johnson Creates His Own Davos-on-Thames

(Bloomberg Opinion) -- “Not going to Davos” is the new “going to Davos.” Like Groucho Marx refusing to join any club that would have him as a member, the annual Swiss junket for world leaders, billionaires and chief executives is becoming famous for people rethinking their former enthusiasm.

After a handful of conspicuous absentees at the last event, U.K. Prime Minister Boris Johnson — who has repackaged his Conservative Party into a National Health Service-loving bastion of the working classes — wants it known that his team won’t be swigging champagne with the Davos set in January. Decrying climate change while flying in on a private jet and eating $43 hot dogs isn’t in tune with Johnson’s new electoral base in England’s Brexit-supporting industrial heartlands.

Johnson certainly deserves credit for his straight-faced willingness to pose as Anti-Davos Man, even after regularly attending the event throughout his eight-year tenure as London’s mayor. Equally, his public distancing himself from the plutocrats doesn’t mean he’ll be shunning the Leave-backing hedge funds closer to home in London’s Mayfair district.

Looking at his previous interviews on the slopes, Johnson showed great skill in preaching to the Davos choir. He promoted the City as a magnet for global finance, talked up the arrival of talented European Union migrants as an incentive to build more homes, and dismissed the chances of Brexit as “vanishingly small.” How times, and Johnson’s political colors, have changed. 

Some believe that Johnson snubbing Davos is a worrying sign for foreign investment in Britain. Rupert Harrison, an adviser to former prime minister David Cameron who now works for BlackRock Inc., says the decision is “ridiculous”; where else can Johnson better make the case for his vaunted “Global Britain?” The prime minister wants to borrow more and spend more, all while splitting from his country’s biggest trading partner, so you might think he’d want to seize any chance to promote inward investment.

Still, Harrison might be overdoing the angst. Foreign investment has fallen since the Brexit referendum, but Johnson’s amicable withdrawal deal with the EU and his parliamentary majority should ease the uncertainty and release pent-up investment (unless next year’s trade talks go belly up), according to Dan Hanson of Bloomberg Economics. Neither is the U.K. especially hard up: Gilt markets could easily absorb Johnson’s borrowing plans, as my colleague Marcus Ashworth has written.

If anything, Johnson appears to be building a new community of elite backers in London — a sort of Davos-on-Thames. A BBC analysis of campaign funding found that the Tories raised 12.2 million pounds ($16 million) of big donations in November, three times what Jeremy Corbyn’s Labour Party managed. Donors included City of London financiers such as Peter Hargreaves, Russian oligarchs and the wife of a Syrian-born arms fixer. The recasting of the Tories along euroskeptic, nationalistic lines may have chased away the “socially concerned” FTSE-100 bosses who populate the chalets of Davos, but hedge funds and wealthy entrepreneurs love the possibility of post-Brexit deregulation, and even a persistently weak pound.

Last January, the left-winger Corbyn was tearing into the Conservatives for sending ministers to “the billionaires’ jamboree in Davos.” That Johnson now claims to share his disdain shows how far the Tories have been forced to change by Brexit and their new blue-collar supporters. It doesn’t mean they’ve abandoned their financier friends.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Lionel Laurent is a Bloomberg Opinion columnist covering Brussels. He previously worked at Reuters and Forbes.

©2019 Bloomberg L.P.

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