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How to buy friends and influence people

A letter from Davos.

Has Davos “peaked” as a must-attend event for the world’s top business leaders and power brokers, as one Wall Street “heavyweight” rudely suggested to the Financial Times? This year’s event, from 23-27 January, didn’t seem as glitzy as it was in 2012. When David Cameron, George Osborne and Boris Johnson were snapped on 24 January, after their speeches, enjoying pizza and Swiss plonk together at the relatively cheap Alte Post restaurant, it wasn’t a Bullingdon Club reunion, as some in the media have mockingly suggested. The Bullingdon may have served ropey wine but it never served pizza.

Neither is Davos any sort of exclusive club. Unlike the invitation-only Bilderberg Group – an elite and quasisecretive club of self-appointed global business leaders and politicians who meet annually in luxury resort hotels – almost anybody rich enough can pay to join the World Economic Forum at the Swiss mountain resort. Though politicians are not charged, many CEOs, bankers and even billionaires struggle to see the point of spending $71,000 on a “non- VIP” invitation to be an official delegate – especially when, as many well-heeled financiers have told me, you could pay 35 Swiss francs (£25) for a day pass to the Belvedere Hotel, where much of the best partying and behind-closed-doors meetings and lobbying takes place. This year, that included the British business leaders’ lunch, backed by the Confederation of British Industry, at which Johnson spoke out about the need for Cameron to invest more in UK housing, road and rail infrastructure.

That said, for the super-rich, the issue was never the price of a ticket: it was whether the time and travel involved were justified by the schmoozing opportunities on offer.

For many, the answer is yes – as long as you understand that Davos is not about sitting through earnest conference debates about “energy security” or climate change. Davos is about having (often buying) a platform. As the gold-mining mogul Peter Munk told me: “If you put up X million or you are the FT expert and you give coverage, you become a panel member. It’s not because you are smarter than anybody else.”

The Swiss newspapers were full of reports of who had not shown up for the annual jamboree (notably the heads of banks such as RBS). The Obama adminstration has never embraced Davos as Bill Clinton did and there were notable absences this year, such as Eric Schmidt, the executive chairman of Google.

In 2012, he was very much a Tarzan-in-chief of the Davos circus, where the Google presence was unmissable. The moment you stepped into the Belvedere Hotel, you were confronted by the tech giant’s free champagne bar, with its iPad stations so that you could check your email and do some hasty googling on the latest to have slipped you a business card.

Such splashy hospitality was effective in reinforcing Google’s position as the world’s top dog. Yet this year, Google had no bar and a greatly reduced presence. The reason? The company now has its own Zeitgeist conference, held at the Grove hotel in Hertfordshire. This is invitation-only and the media are not welcome – very much the opposite of Davos, where journalistic egos are massaged with offers to chair panels.

So what do the Davos big beasts get for their money? To attend as a “strategic partner”, a company might pay between $250,000 and $1m for a number of executives to attend and sit on panels, along with corporate branding and advertising. You might also get the chance to meet one of the 50 or so heads of state in attendance.

“If you are the global head of a bank, you depend on governments, just as I do in the mining world,” says Peter Munk. “In Davos, you can meet privately in your guarded suite with David Cameron or members of the Russian government. Do you think it is not worth it for the meeting, just for a lousy quarter of a million dollars?”

For Cameron and the other leaders, the point of the event is to feel less lonely at the top. They come to tell themselves that it’s not too late to be taken seriously as a global citizen or remembered for their philanthropy. So they can’t give up Davos, just yet. Munk – who now watches the speeches from a chair in the library of his Swiss chalet – told me that every year, the global elite say this is the last time they will come.

“Even I used to say it – that Davos had changed. That it wasn’t the same – that there were too many people, too many journalists; and yet here I am again in my eighties. And the same people who say Davos is ‘crap’ always come back.”

William Cash is the editor-in-chief of Spear’s wealth management magazine

This article first appeared in the 04 February 2013 issue of the New Statesman, The Intervention Trap

David Young
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The Tories are the zombie party: with an ageing, falling membership, still they stagger on to victory

One Labour MP in Brighton spotted a baby in a red Babygro and said to me: “There’s our next [Labour] prime minister.”

All football clubs have “ultras” – and, increasingly, political parties do, too: although, in the case of political parties, their loudest and angriest supporters are mostly found on the internet. The SNP got there first: in the early days of email, journalists at the Scotsman used to receive bilious missives complaining about its coverage – or, on occasion, lack of coverage – of what the Scottish National Party was up to. The rest soon followed, with Ukip, the Labour Party and even the crushed Liberal Democrats now boasting a furious electronic horde.

The exception is the Conservative Party. Britain’s table-topping team might have its first majority in 18 years and is widely expected in Westminster to remain in power for another decade. But it doesn’t have any fans. The party’s conference in Manchester, like Labour’s in Brighton, will be full to bursting. But where the Labour shindig is chock-full of members, trade unionists and hangers-on from the charitable sector, the Conservative gathering is a more corporate affair: at the fringes I attended last year, lobbyists outnumbered members by four to one. At one, the journalist Peter Oborne demanded to know how many people in the room were party members. It was standing room only – but just four people put their hands up.

During Grant Shapps’s stint at Conservative headquarters, serious attempts were made to revive membership. Shapps, a figure who is underrated because of his online blunders, and his co-chair Andrew Feldman were able to reverse some of the decline, but they were running just to stand still. Some of the biggest increases in membership came in urban centres where the Tories are not in contention to win a seat.

All this made the 2015 election win the triumph of a husk. A party with a membership in long-term and perhaps irreversible decline, which in many seats had no activists at all, delivered crushing defeats to its opponents across England and Wales.

Like José Mourinho’s sides, which, he once boasted, won “without the ball”, the Conservatives won without members. In Cumbria the party had no ground campaign and two paper candidates. But letters written by the Defence Secretary, Michael Fallon, were posted to every household where someone was employed making Trident submarines, warning that their jobs would be under threat under a Labour government. This helped the Tories come close to taking out both Labour MPs, John Woodcock in Barrow and Furness and Jamie Reed in Copeland. It was no small feat: Labour has held Barrow since 1992 and has won Copeland at every election it has fought.

The Tories have become the zombies of British politics: still moving though dead from the neck down. And not only moving, but thriving. One Labour MP in Brighton spotted a baby in a red Babygro and said to me: “There’s our next [Labour] prime minister.” His Conservative counterparts also believe that their rivals are out of power for at least a decade.

Yet there are more threats to the zombie Tories than commonly believed. The European referendum will cause endless trouble for their whips over the coming years. And for all there’s a spring in the Conservative step at the moment, the party has a majority of only 12 in the Commons. Parliamentary defeats could easily become commonplace. But now that Labour has elected Jeremy Corbyn – either a more consensual or a more chaotic leader than his predecessors, depending on your perspective – division within parties will become a feature, rather than a quirk, at Westminster. There will be “splits” aplenty on both sides of the House.

The bigger threat to Tory hegemony is the spending cuts to come, and the still vulnerable state of the British economy. In the last parliament, George Osborne’s cuts fell predominantly on the poorest and those working in the public sector. They were accompanied by an extravagant outlay to affluent retirees. As my colleague Helen Lewis wrote last week, over the next five years, cuts will fall on the sharp-elbowed middle classes, not just the vulnerable. Reductions in tax credits, so popular among voters in the abstract, may prove just as toxic as the poll tax and the abolition of the 10p bottom income-tax rate – both of which were popular until they were actually implemented.

Added to that, the British economy has what the economist Stephen King calls “the Titanic problem”: a surplus of icebergs, a deficit of lifeboats. Many of the levers used by Gordon Brown and Mervyn King in the last recession are not available to David Cameron and the chief of the Bank of England, Mark Carney: debt-funded fiscal stimulus is off the table because the public finances are already in the red. Interest rates are already at rock bottom.

Yet against that grim backdrop, the Conservatives retain the two trump cards that allowed them to win in May: questions about Labour’s economic competence, and the personal allure of David Cameron. The public is still convinced that the cuts are the result of “the mess” left by Labour, however unfair that charge may be. If a second crisis strikes, it could still be the Tories who feel the benefit, if they can convince voters that the poor state of the finances is still the result of New Labour excess rather than Cameroon failure.

As for Cameron, in 2015 it was his lead over Ed Miliband as Britons’ preferred prime minister that helped the Conservatives over the line. This time, it is his withdrawal from politics which could hand the Tories a victory even if the economy tanks or cuts become widely unpopular. He could absorb the hatred for the failures and the U-turns, and then hand over to a fresher face. Nicky Morgan or a Sajid Javid, say, could yet repeat John Major’s trick in 1992, breathing life into a seemingly doomed Conservative project. For Labour, the Tory zombie remains frustratingly lively. 

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.

This article first appeared in the 01 October 2015 issue of the New Statesman, The Tory tide