Friday, March 3, 2023

Gray area

The Readout With Allegra Stratton

Today, Bloomberg's Joe Mayes reports that Chancellor Jeremy Hunt is set to protect Britons from rising bills by maintaining the government's energy guarantee at £2,500 for another 3 months. Yesterday, Joe reported that the Budget due in a fortnight will have a much needed dose of "hope" served up alongside fiscal restraint.

The Energy Price Guarantee was due to rise to £3,000 on April 1: Jeremy Hunt previously said in February that changing course would be too expensive for the Treasury. However, the week started with the announcement from Ofgem that it will cut the household energy price cap by 23%. And as I wrote in Monday's Readout, the net result would still have been households paying more. So at the week's end, this U-turn from the chancellor will be welcome news for many people struggling with inflated energy prices.

The change in approach could well be a result of extremely effective campaigning by the likes of Martin Lewis. But it could also be the product of an economy which — despite being beset with a myriad of problems — has begun to perform just slightly better than expected.

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What just happened

The stories you need to know about this evening

Gray is the new black

Picture the scene: the Tory party at their bonding exercise pub quiz, fresh from discussing the next election, fist-bumping the Windsor framework, when their mobiles must have started leaping with news that Sue Gray, partygate judge, had jumped ship. 

Gray's departure to the Labour Party looks to be a coup for Keir Starmer. Most civil servants' movements are "bubble stories" but not hers. Her name became known down the Dog & Duck. She became a meme. I'm sure at the back of some people's cupboards there are mugs with "We're waiting for Sue Gray" written on them. 

Sue Gray Photographer: Steve Back/Getty Images Europe

Labour folk I knew in government before 2010 always spoke highly of Gray, and when I came to know her more than a decade later, she was frank, quick, warm, tough. I have a friend working out in the most far flung windiest, wildest part of Scotland who got a call one day from the second Perm Secretary at the Department for Levelling Up: "Sue Gray wants to visit." And so she did. She finds things out for herself. No wonder she considered Keir's offer

But sadly for fans of Gray who want her to be everything her reputation implies — and yes, that includes senior Conservatives — her departure is troubling. When former Chief Secretary to the Treasury Simon Clarke, who had a ring-side seat in the Truss era, says he is "shocked," that's a pretty good gauge of how complicated this is. 

It isn't just about party politics but about how our government works. The idea that you can go straight from being one of the most senior civil servants in the land, integral in a government's approach to a host of sensitive issues, to being chief of staff to the leader of the opposition just doesn't fit. Alex Thomas of the Institute for Government and a former civil servant across a number of departments says that not only does this give critics of Whitehall a "stick," but begs the question: How can she "unknow" information she has spent years amassing at the heart of government?

Spare a thought for government officials who fiercely believe in the principle of an impartial civil service and the concept you keep the show on the road, when the political lot get booted out. By the way, many of these staffers spoke to Gray for her Partygate inquiry because she was the epitome of impartial. Today they may be feeling bruised. Trust is the glue, and after Gray's departure — it is weaker.

Then, yes, the politics of it all: Boris Johnson. Alexander Stafford. Nadine Dorries. Jacob Rees-Mogg. Tory MPs now impugning her motive when investigating the No.10 parties. Personally I think this is far-fetched, but I do think it is reasonable they ask the question. If the week began with Boris Johnson seeming deflated, it has most certainly ended with him coming out swinging

Sue Gray is a loss to government. Let's hope too much else isn't lost to government — principles of impartiality and trust — by the time this all comes to a conclusion.

Countries getting it right on early years child care

The quality and cost of early-years child care have important implications for a nation, from the size of its economy to the performance of students in high school and university. One of the most significant payoffs of a successful child care system is higher female workforce participation. Conversely, mothers' careers bear the brunt of inadequate child care or parental-leave policies. In the UK, the unaffordable cost of child care has women increasingly leaving the labor force and is emerging as a major political issue.

What you need to know tomorrow

Get ahead of the curve

Enforcement investigation. The UK markets watchdog opened an investigation into the London Metal Exchange focusing on potential misconduct during last year's massive nickel short squeeze.

Arm's debut. As Arm prepares for an initial public offering this year, global investment banks are pitching a range of valuations for the chip designer, from $30 billion to $70 billion.

The world of expensive homes. The party may finally be ending for London's luxury property market, according to The Secret Agent. 

Challenge. A billionaire and "close" partner of oligarch Roman Abramovich has become the first person to challenge the UK's Russian sanctions regime in a London court.

Wrap up. The UK is bracing for an arctic blast with temperatures dropping to unusually low levels in the coming days and snow expected in parts of the country early next week.

Setbacks. NatWest has proposed changing its risk models after suffering a string of unexpected losses that left its trading unit in the regulatory "red zone."

The big number 

£100,000
Award given to a woman from a UK court for image-based abuse — the first time in England and Wales a judge has awarded such compensation.

China's new money men

One key story, every weekday

In the last year, Chinese markets have undergone an exodus of foreign investors. Photographer: Andrew Wong/Getty Images

China is about to see its biggest reshuffle of leaders in decades. A generation of internationally respected economic officials will make way for a group of politicians better known for their strong ties with President Xi Jinping, than academic credentials or overseas exposure. 

Read The Big Take.

Allegra Stratton worked for Prime Minister Rishi Sunak when he was chancellor and runs an environmental consultancy, Zeroism.

Please send thoughts, tips and feedback to readout@bloomberg.net. You can follow Allegra on Twitter.

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