Leading Through Disruption In Conversation with Lord David Cameron

Good morning everybody and once again welcome. My name is Hadley Gamble. I'm the chief international anchor for IMI and it is a thrill and a privilege to be seated next to Lord David Cameron, the former prime minister of the United Kingdom. Um Lord Cameron, I just want to kick off by getting you to set the scene for us. in your mind, how do you see the the sort of fintech ecosystem today, whether you're sitting in London or right here in the UAE?

I think it's first of all, it's great to be here. I sometimes think of this as my second home as I teach at NYU in in Abu Dhabi and it's great to be here for finance week. I think in terms of the ecosystem, I think Abu Dhabi and London both have some key advantages. So here obviously you've got deep pools of capital in London. We've got one of the global financial centers, but you don't become a fintech center unless you also do a whole bunch of other things which I think both Abu Dhabi and London have done.

When I was prime minister back in 2010, we could see the development of this fintech ecosystem. And we said to the companies, what is it you want and need? And it was, you know, faster broadband, visas for entrepreneurs, open up banking information so we can create new apps, give us a regulatory sandbox so we can try out new ideas. So it's not one thing. It's a whole bunch of things.

And I can see that that's exactly what you're doing here in Abu Dhabi. It's what we did in in London. And I think the competition is healthy. I think you're reminding us how we now need to go back and work out even more things to do to attract more businesses, more entrepreneurs and and build more more more unicorns, which ultimately is is what this is about.

How worried are you by the fact that we have an exodus of Brits coming to the UAE in terms of loss of talent, but also loss of tax revenue? I am worried about it because ultimately, you know, look, great British entrepreneurs will always travel the world and set up businesses and go into new markets and that's something that my country's done for uh generations. But obviously, I want talented people to think I'm welcome to stay in London. I want to build a business in London. And that means that yes, there are issues about how we tax people, but we've also got to make sure all the other things we got going for us, whether it is our schools, our universities, uh the quality of life, you got to work on all of those things.

So, yes, it is a worry. I don't want to get too political. That's not the the purpose of being on this stage today, but you've got to ask yourself in the modern world, am I doing enough to attract and retain talent? People don't have to build a business in Britain. they can build it somewhere else.

And we got to say to people, we're going to do everything we can to help keep you.

In your mind, what are the things that the current government needs to do to make that a reality because they're clearly failing on that front?

Well, I think that there are some things on taxation that they need to think very carefully about. Uh if we keep freezing tax thresholds, we're going to see people at relatively low amounts of earnings go into effectively paying a 40% rate of tax. So, they got to think about that. But I'd also say there are some things they're doing which they need to do faster. We have seen if you take the London stock market uh we have seen a number of companies exiting and we're not seeing enough of our pension funds investing in our principal uh market.

I mean it's a source of amazement to me that some Australian supers actually put more money into the UK stock market than our own pension funds. Now this has been a longstanding problem. I remember trying to deal with this back when I was prime minister. We haven't yet got it right. We got to work harder at that because ultimately London is one of the great financial centers.

It's interesting in the rankings you're doing here. I think we still rank number two on across but but to maintain that place we got to make sure we're firing on all cylinders and getting pension funds to invest more is is going to be part of that.

Tell me when you think about this a little bit more broadly, the global financial picture. Um there's been a lot of concern obviously in the early days about President Trump's tariffs and yet that seems to be you know driving revenue for the US government. In your mind, how damaging has that policy been? So I think it is damaging because ultimately I'm a believer in free trade and open trade and ultimately tariffs put up prices. They hamper competitiveness.

They hamper productivity. They make it more difficult to uh enter markets. So, you know, I' I'd like us to get back to a world where where organizations like the G20 every year were asking, how do we drive down tariffs? How do we drive down non-tariff trade barriers? And how do we open up markets?

But look, I'm a politician. I recognize the pressure uh that governments feel under. And we have to understand where those pressures come from. The fact is that while globalization has been a great driver for growth and jobs, some people and some places have been left behind by it. And unless politicians like me address those problems, make sure we're leveling up our economy, making sure we're giving training to people that need it.

Unless we do those things, the pressure for tariffs will grow. And I'm also a realist in that look, once you've introduced tariffs, it's quite difficult to row them straight back again. I if you look at the US situation written into their budget now are billions of dollars of revenue that they're going to get from from tariffs and and even if the next president is a you know is a cross between uh you know Adam Smith and Margaret Thatcher it's not going to matter because if you get rid of the tariffs you know you're going to find sorry my microphone is going if you get rid of the tariffs you're going to find you're going to have to put up taxes or cut spending so it's going to take time to get back to a world where we try and encourage uh more free trade and more openness.

Do you think it's going to cost him in the midterms?

Look, I'm not a analyst of American politics, but tariffs do if if economists are right over time, tariffs do put up prices. Putting up prices, you know, causes inflation. Inflation is creates the problems of affordability that are much discussed in America right now. Now, so far, even though the effective tariff rate is 17%, we're back close to the 20% it was in the 1930s, that hasn't yet impacted the price index in the way you'd expect it to. Now, most economists I know say that's because there was a lot of discounting.

There was a lot of importing before the tariffs came in. But over time, those price increases will will come through. And you're going to have this extraordinary trade-off where the government will probably use some of the revenues from tariffs to give people back the money that they need to buy the goods that have gone up in price because of the tariffs. It's not a new argument. We had this argument

in the 1920s in the UK tariffs so we didn't have to put up. Let's use this microphone. I think it might be a bit better.

Tell me this. Um when you think about uh what happens next, there are a lot of conversations about the rise of populism, populism seeping into um politics in your mind and and you put on your your hat not just as a politician but now also as a university professor. um how are governments going to be able to balance this in your mind because you have a lot of very very angry people if you just take the UK as an example there are a lot of worries that this government is killing the middle class um and and there will be push back.

Yeah. Look, I think the rise of populism is a phenomenon right across Europe, United States but also elsewhere. This is very much the subject of the course I teach at at NYU. And and to me you got to look at the causes of the populism. what is driving the rise of whether it's the a party like reform in the UK or the AFD in Germany or Jordan Bardella in France it's happening in every country and to me there are two and a half causes one is this issue of those left behind by globalization and the fact that living standards in the west have been quite stagnant the second I think is this issue of migration particularly illegal migration and the sense that people have that mainstream politicians of left and right have not adequately dealt with this problem in the UK.

It's perfectly clear that the the problem of the small boats coming across the channel. It drives people crazy that their politicians cannot seem to deal with this problem and to crack it. And that's happening right across Europe. I think it was probably the biggest cause of Trump's success in the United States was the the the southern border. The half cause I think is the fact that social media is an enormous amplifier of problems.

And of course when I started back in politics, you know, when I became leader of the Conservative party, the iPhone hadn't been invented. I'm that old, I'm afraid. Um, but but if you think before social media, you had in politics more of an umpire, more of a referee. You had newspapers and television channels that everyone was watching that were effectively saying, you know, she's telling the truth, he's lying, that's fact, that's fiction. Right now with social media, people have their own truth, their own news, and so it amplifies the sense of alienation that various people feel on different sides of politics.

So those are the causes of populism. So I think when you're looking at which countries are going to succeed and deal with these issues, you got to look at who's dealing with the fundamental drivers, who is making sure that prosperity is more widely spread, who's making sure that immigration is properly under control, and if you don't crack the the causes, you're going to see more of the effects.

Do you regret um in terms of the the migration policy under the Conservatives, do you think that that could have been handled differently? I think it was I was very conscious back in 2010 of the need to control better migration. I introduced actually the first time in British politics a a cap on economic migration and uh you know I I think successive governments should have done more to deal with the legal side of things but also this problem of illegal migration particularly the boats coming across the channel that wasn't an issue uh when I was prime minister it's become a huge issue now and I'm quite sure that we're going to have to you know employ some quite novel approaches. We're going to have to break out of some of the lead.

What is a novel approach? You just send people back.

Yeah. I think you've got to be able ultimately to send people back to countries that most people will consider perfectly safe. And currently under our system that's not happening. Then you've got to deal with the fact that some people you cannot send back to Iran or Afghanistan or countries that are completely unsafe. And that's why when I returned to government and I was part of Rushi Sunnak's government and we had the scheme to the agreement with Rwanda which a lot of people thought was you know quite an eccentric idea but actually it was at least an answer to the question where are you going to send people that come from countries where you can't return them because as long as people are able to get on a boat in France get to Britain and not be returned you're going to still have this problem.

So you have to find an answer and to be fair to Rishi Sunnak he did find an answer but it wasn't put in place by the time of the election.

Do you consider the reform party under Nigel Faraj dangerous?

Look I think they are obviously very effective at rising these issues up the agenda but the question is will they actually deal with them? Because what this problem needs, just as the problem of the fact we're not growing very fast at the moment, what it needs is a very detailed plan in terms of the economy. Which regulations are you going to change? Which regulators need to go? Which taxes need to come down?

What plans have you got to whether it's drill for oil in the North Sea or get houses or infrastructure built more quickly? It's an incredibly detailed plan. And so one of the problems with some of the populist parties, great at raising the issue, great at firing people up, but actually when you examine the plan, it tends to fall apart.

Yeah. In your mind, do you see more defections from the Conservative Party to reform on the horizon?

I'm a loyal conservative. I hope not. I think people I want people to, you know, join my party, get involved in my party. I'm a supporter of Chem Badenok. I like what she's doing.

Um, but you know, we had a very bad election. We're in a recovery phase. But ultimately, do I think that center right answers around choice and freedom and the rule of law, uh, helping people to grow businesses, helping people to invest, you know, fundamentally asking the question, how do I make it easier to start a business, grow a business, employ people, grow? That's what we need in our politics, and that's to me what being a conservative is all about. So, I I hope that doesn't happen.

And look, I'm I'm not active in politics at the moment, but I'm supporting from the sidelines.

Supporting from the sidelines. And And if you just take a look back at your tenure as prime minister. Um the most recent data that I've seen is that Brexit has cost the average UK citizen 2,000, right? Um do you regret Brexit?

Well, I was I ran the campaign to keep Britain inside the EU on a report. your choice is ultimately

ultimately I lost that campaign and uh obviously I regret the fact that I lost but look I think you have to accept the results of the referendum we're a democracy we put that vote to the people and I think you know in our new circumstances can we make it work being a friend a neighbor and a partner of the EU rather than a member yes I think we can and I would say that Ukraine is sort of living proof of that we're not in the EU but we have probably been the strongest partner together with our European allies at helping Ukraine. Um, and so, you know, if we were a much smaller country, but we are still the sixth largest economy in the world. We got one of the biggest defense budgets, one of the biggest uh, you know, diplomatic networks, one of the most important and impactful uh, aid departments. We are a great partner for Europe in whatever challenge they have. So, we can make that work.

And and while we're, you know, as we're not in the EU, and this is a good point to make at this conference, we should make sure that we don't make the regulatory mistakes that Europe sometimes makes. On AI, I think the European regulation on AI is a mistake. They're trying to pre-eregulate every outcome. I don't think that's going to work. When it comes to fintech, we are more nimble.

We are more creative. When it comes to an area I spend a lot of time on now, which is life sciences, biotech, how we find cures for rare diseases, how we get new novel drugs into patients. You know, we're not in the European medicines agency. We've got our own regulatory body. We should aim to make Britain the most nimble, the best place to develop uh new drugs and treatments and make the most of the situation that we're in.

And I'm not sure in any of those areas we're currently doing that uh as assertively as we should be.

And and just kind of back to that argument when you talk about um you know you regret the election um losing that election. But when people say that was a reckless decision that ultimately led to an economic situation that's been bad for the United Kingdom I don't accept that. Look, if

how

well because in British politics, we had had treaty after treaty giving powers from Westminster to Brussels and politicians kept coming along and promising referendums but never delivering them. In fact, one of the questions I sometimes ask people is can you can you name a political party that between 2001 and 2010 didn't run on an election promising a referendum? Labour promised a referendum in 2005. The Liberals promised a referendum. These things were never delivered and ultimately you can't govern a country and take people with you if you keep promising them a choice and don't give them a choice.

Now I did give people a choice. It wasn't some sudden decision. I announced the referendum two years before the election. Three years before the actual referendum I I went and negotiated a new agreement for Britain in Europe dealing with some of the issues that people were concerned about. But ultimately, as I say, in a democracy, you hold a referendum, you have a debate, you make a decision, you accept that choice, and we're a big enough country to make that relationship work.

There are lots of things we could do to make it work better, and I'm sure we will in the years ahead. Do you believe the UK is better off post Brexit?

I think you can. There's also I there are all sorts of arguments about the figures. Most economists would say that it has been it has had a a bad economic effect and I see no reason to to disagree with that. But ultimately we got to deal with where we are now and what we need to do. Um but I don't accept the idea that somehow this was you know a sudden decision or a decision in an election.

It was a long time in coming because ultimately Britain had been promised referendums. they hadn't been delivered and it was essential that at some stage you have to say to people is this what you want

uh and you can't I think that you know some people say well is there a role for referendums at all in this way and I would say yes there is because of course most decisions should be taken by elected representatives in parliament but when you're talking about the rules under which you're governed when you're talking about the power that the parliament actually has ultimately I think that is a decision that legitimately has to be passed back to the people who who've given you the power in the first place.

What does this government have to do in your mind to bring people back to the UK? Because they've got some pretty stiff competition with the value proposition in the UAE. I

I think the if you look right across Europe, and I include Britain in this, a basic problem is that Europe seems to have fallen out of love with growth. I mean, look at the growth rates across Europe compared with the growth rates in the United States or here. We need to create a more dynamic economy. Uh and we need to do that by changing regulations, by building more homes, by getting infrastructure built more quickly, by encouraging people to start businesses, by encouraging investment. As I say, there's not it's not simple.

There's not like two or three decisions. There's a whole range of plans and decisions that need to be put in place to make our country more competitive, more attractive, more dynamic. And I don't think we should sort of give up and just accept that Europe is heading for museum status. You know, we have a lot of dynamism in our economy. I mean, if you look at issue we're talking about this week, look at fintech.

You know, Britain is still the number one in Europe for creating fintech unicorns, the number one for raising venture funds to put into to to to fintech. Some of the biggest success stories, like for instance, Revolute is a British success story. Um, so there's plenty of dynamism in our in our economies, but we've got to make sure we drive that through the entire economy and it's got to be an economy first approach. I think one of the things the government needs to understand is if you want to achieve something in politics, if it's growth that you've decided is the priority, everything else has to be subservient to that goal. Because it's very hard to get anything done in politics and you won't get it done if you've got multiple.

If you say, "I want growth, but by the way, I'm going to reeregulate the housing market. I want growth, but here's a whole lot of new regulation in the labor market." You won't get the growth.

So, the message is don't give up on the UK yet.

Don't.

Lord Cameron, thank you so much for joining us.

Thanks. It's been great to be with you.