Boris Johnson will not be prepared to risk his prospects of re-election by returning to austerity in the wake of the coronavirus crisis, in spite of the Conservative Party’s “ideology”, a leading fund manager has declared.

James Anderson, joint manager of the £10 billion Scottish Mortgage Investment Trust, meanwhile also lamented a lack of attractive companies on the UK stock market and underlined the speed at which the global transition from fossil fuels to renewable energy is occurring.

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Baillie Gifford partner Mr Anderson highlighted his belief that one major thing that had changed with the coronavirus crisis was that governments around the world would no longer be able to say they were unable to borrow money and go back to austerity.

He flagged the UK austerity programme implemented in the wake of the global financial crisis when George Osborne was chancellor of the exchequer and the “ideology” of the Tories then as well as that of the Conservative Party today in this context.

Mr Anderson said: “The UK, in that way, will be one of the test cases.”

However, referring to the Prime Minister and his adviser Dominic Cummings, Mr Anderson added: “Do I believe Boris Johnson and his lovely adviser are going to be prepared to risk not being re-elected by clamping down on public expenditure? I don’t.”

He added: “My bet at the moment, even in the UK, is that austerity doesn’t work any longer.”

Mulling what the coronavirus pandemic had actually changed people’s minds about, Mr Anderson said: “The big one, the most systemic one I think isn’t being thought about enough is it seems pretty unlikely that governments almost anywhere are going to be able to say ‘we are not going to be able to borrow money’ or ‘we should go back, in the British [sense], to austerity'.”

Noting that people were currently talking about an analogy with 2010 when fiscal policy was tightened dramatically, Mr Anderson said: “I don’t think that is particularly likely.”

Flagging major developments in a European context, Mr Anderson noted that the Spanish government was “underwriting universal basic income” and he flagged the “obvious willingness of Germany and France to underwrite aid for southern Europe” in a way they had refused to do a decade ago.

He flagged a “probable path” where countries would continue to print money, and keep interest rates down and the cost of capital “very low” and “austerity doesn’t come back”.

Mr Anderson added: “When there is a crisis, people pick up the ideas that happen to be around. I do think that modern monetary theory and the like is an idea that happens to be around at the moment. It will be a very convenient one for many governments to adopt.”

Scottish Mortgage’s stock market capitalisation rose above £10bn for the first time in May, and it is now the largest investment trust listed on the London Stock Exchange.

Over the 10 years to March 31, Scottish Mortgage achieved a total return on net asset value of 360.8 per cent. This was way ahead of a 128.1% total return on the FTSE All-World Index over the same period.

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The trust’s investments include Californian electric vehicle and energy storage systems pioneer Tesla, led by Elon Musk. It also has a stake in Mr Musk’s SpaceX venture. Scottish Mortgage’s other investments include Bytedance, the Chinese company behind the TikTok social media platform, and US online retail giant Amazon.

Mr Anderson highlighted Tesla as the biggest contributor overall to Scottish Mortgage’s performance last year.

Flagging the transition in energy, Mr Anderson said: “This is a train that is moving with enormous power and speed.”

He added: “We are very much trying to find additional investments that have the competitive advantage to really exploit this theme well. I have been rather frustrated it has only been Tesla up until now.”

Mr Anderson flagged a 99% plunge in the cost of solar power over the last 40 years.

He said: “Even the cost of leaving traditional generation facilities, coal and gas, on is going to require more expenditures than building solar and wind from scratch.”

Scottish Mortgage’s exposure to companies focused on the digitalisation of the global economy has stood it in good stead amid the coronavirus crisis, as people have turned even more to online solutions.

Mr Anderson noted Scottish Mortgage was finding that “there are more companies that are adjusting to this digital-driven world”, noting this was “broadening out” beyond the very big companies.

However, he said: “I am probably more pessimistic now than I have been about the British stock market’s ability to throw up companies that are able to participate in this extraordinary pace of change.”

Mr Anderson declared: “I think it is quite surprising to be honest. I think in a way that has got worse.”

He added: “I don’t see an Elon Musk around, do you?”

Scottish Mortgage’s exposure to the UK stock market has reduced dramatically in recent years. UK equities accounted for just 1.7% of total assets at March 31, down from 46.1% 15 years earlier.

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Asked how he believed Brexit would develop, and whether he believed a trade deal would ultimately be agreed between the UK and European Union, Mr Anderson replied: “I am quite pessimistic as I still think we are approaching it with a fairly great degree of arrogance and an inability to recognise where power lies in this relationship.”

He added: “Our policy isn’t determined by that. We have such little exposure to Britain. It is not a big issue for us.”

Mr Johnson pledged the UK would leave the European single market by the end of this year, ahead of his decisive election victory

last December.