Response by Lord Sassoon to Kuwaiti Finance Minister Dr Nayef Falah Al Hajraf on the sixtieth anniversary of the Kuwait Investment Office
This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government
Speech by the Commercial Secretary to the Treasury.
28 November, Lancaster House, London
Your Royal Highness, Your Highness, Your Excellencies, my Lords, Ladies and Gentlemen.
I am delighted to be here today to respond, on behalf of Her Majesty’s Government, to His Excellency Dr Nayef Falah Al Hajraf’s very kind words.
The Government welcomes the Kuwait Investment Office’s (KIO) commitment to invest in British infrastructure for the first time and to make London the base for more of its international business.
The Government is very proud of the longstanding ties between Kuwait and the UK. And we are particularly proud of our close financial ties going back 60 years to 1952 when the Kuwait Investment Office made the City of London its home.
It was also, of course, the year when Her Majesty the Queen ascended to the throne.
So this year in Britain we have both celebrated the last sixty years and, with a degree of British modesty and understatement, we have also celebrated what it is we think that makes Britain, Great Britain.
One of the key virtues, I believe, that underpins Britain’s success is a combination of foresight and prudence.
So too, in Kuwait, looking back 60 years we can see that the late Amir of Kuwait was both a wise and prudent leader.
And I would like tell you another story from 1952 that illustrates the noble principles that have guided both the City of London and the creation of Kuwait’s financial institutions. A story which demonstrates our mutual values.
We have just heard something of the story of the KIO. But in 1952, the National Bank of Kuwait was also founded. This prestigious bank was created when a prominent Kuwaiti merchant went to a British bank to open a Letter of Guarantee. Much to his surprise, his request was rejected.
Not only was this well-known merchant shocked by his treatment but news of this was soon all over town. But it was this incident which gave rise to the idea of having a national bank with a mission to serve the national needs, to help the economic growth of the country and to look after the people’s savings.
In fact, a meeting was held with the late Amir of Kuwait, who congratulated the promoters of the new bank on the idea and promised them his complete support.
And so, by Amiri decree, the National Bank of Kuwait opened for business in November 1952. And NBK has grown over 60 years to become one of the largest and most profitable banks in the region.
So 2012 marks sixty years of several key development in Kuwait’s financial story, both here and in Kuwait itself.
And Kuwait’s vote of confidence in London in 1952 was all the more significant when you recall the state of Britain then.
A Britain still recovering from the effects of world war; food rationing still in place; regular smogs in London so thick you sometimes couldn’t drive a car on the side streets; and London having not yet in 1952 regained from New York its position as the world’s leading international financial centre.
But Kuwait wasn’t deterred by any of this - for which we are very grateful. The KIO showed the way and other sovereign wealth funds have followed their example over the past 60 years.
For the UK, free trade and investment flows are at the heart of what we stand for as a nation. Successive governments have ensured that the UK is the most open economy for foreign investments. And the UK has been the most consistent voice arguing for free global trade and investment flows.
And only this week, the appointment of Mark Carney, the finest central banker of his generation, to be Governor of the Bank of England has been widely applauded as a further sign of the UK’s openness. So now, in 2012, after 60 years, we are honoured, Your Highness, to join in Kuwait’s celebration of the successes of the KIO in London.
Looking ahead, I am delighted to see that the KIO is working carefully on further areas for investment that the UK Government sees as critically important - infrastructure and energy. Just as we have done in the past, we hope to work proactively with you, our ally and our friend, on this important agenda.
Our principles remain the same as they did in 1952. We welcome our friends’ investment in the UK. And we work hard so that when you invest in the UK, you know your money is protected for the long-term and that your return is reliable. These are things which are rare in today’s markets.
We will also work very hard to see that the KIO is still based in London 60 years from now, still creating successes for the people of Kuwait and still investing in the UK.
But overall, Your Highness, we hope that we can once more celebrate the great friendship between Kuwait and the UK, sharing the principles of financial prudence, wise investment and long term security for the prosperity of all.