Tuesday, May 30, 2023

Sunak's Long Covid

The Readout With Alex Wickham.

Hi, I'm Alex Wickham, Bloomberg's senior government reporter based in London. Here's today's Readout.

It is fair to say that rehashing arguments about how the government handled the Covid pandemic is not one of Rishi Sunak's famous "five priorities" for Britain.

Put it another way: a year or so out from an election, the prime minister desperately wants to be focusing on how he's delivering on the key policy areas that voters care about. Instead, all Westminster wants to talk about is whether his government is covering up ministers' WhatsApp messages and personal diaries sought by the official Covid inquiry, or more specifically, those of his predecessor, Boris Johnson. The risk for Sunak is voters start to ask those questions again, too.

That said, things aren't going much better on the first of his five priorities: shop price inflation accelerated to 9% this month, the British Retail Consortium said today.

Meanwhile, a Treasury kite flown over the weekend suggesting the government is looking at a food price cap is being widely panned. Inflation looks sticky and increasingly domestic.

Put simply, this is the nightmare for Sunak: the longer inflation takes to come down, the longer the cost-of-living crisis and mortgage pain goes on, the longer Tory MPs will have to wait for tax cuts, and the less likely it is Sunak can avoid defeat at the next election.

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What just happened

The stories you need to know about this evening

What's going on with the Covid Inquiry?

With the Covid pandemic over and no shortage of new and current crises facing the UK, it's worth asking why stories about years-old Boris Johnson corona WhatsApps are leading the news.

Boris Johnson Photographer: House of Commons/UK Parliament/PA Wire

The answer is that this is not a story about the past, but the future. Journalists can sense it.

What's clear from the skirmishes between the government, Johnson and the Covid Inquiry over the last few days is that the investigation's chair, Baroness Hallett, is not going to whitewash what ministers got wrong during Covid.

That means the evidence she obtains could be highly embarrassing for the likes of Johnson, former Health Secretary Matt Hancock, and those whose decisions affected the lives of Britons during the pandemic.

Of course, that includes the then-chancellor of the exchequer, the man who railed against lockdown restrictions from within Cabinet, who designed the controversial "Eat Out to Help Out" scheme that many think simply helped spread the virus: Rishi Sunak.

Rishi Sunak and Boris Johnson at a Covid press conference  Photographer: WPA Pool/Getty Images Europe

Many of those who took the key decisions during Covid are no longer in power. Sunak still is, and he has to fight an election on the government's record.

While other opinions are available, the general narrative in Westminster is broadly that the Johnson-Sunak government was around a week or so late with the first lockdown in March 2020, and repeated the mistake again later that year when another wave of Covid hit.

At that point, the perceived wisdom is that ministers led by Johnson and Sunak decided it was preferable to protect the economy rather than go into another lockdown. Eventually they u-turned, but not before thousands more people lost their lives. That's essentially the number one charge on which the inquiry will be passing judgment.

So you can see why this story is of acute political importance in the months ahead. Imagine if, a few months before a general election, the probe uncovered bombshell evidence detailing exactly how mistakes were made that resulted in Britons losing their lives.

A WhatsApp message here about why businesses had to be saved at all costs, even if it meant an increase in deaths. Minutes of a meeting there where ministers downplayed the advice of medical experts. You get the idea.

Some voters, perhaps especially the more business-minded ones, might have some sympathy with the monumental choices ministers had to make. Others who lost relatives might be less forgiving.

That could become a major election issue. At a time when Sunak needs absolutely everything to go right for his government to have any prospect of staying in office next time round, it could be the final straw that sees Britons elect a Labour government next year.

Asked by reporters today if the government was covering up its actions, Sunak's spokesman replied: "No."

But exactly how much information to hand over to the inquiry is something that's been concerning ministers and civil servants for months.

The reality is the government would quite like it if the inquiry took an age to hear evidence and report back.

The immediate risk is that voters see that and make up their own minds.

The property slowdown hits Canary Wharf

The Canary Wharf financial district in London. Photographer: Chris Ratcliffe/Bloomberg

Canary Wharf has become the latest symbol of the global real estate downturn, with Moody's downgrading its debt and forecasting a challenging funding environment for at least the next year.

Canary Wharf has more than £1.4 billion of debt coming due in 2024 and 2025 against the backdrop of a "difficult operating and funding environment for real estate companies" Moody's said. 

Read more from Jack Sidders.

What we've been reading

What next? Re-elected President Recep Tayyip Erdogan promised a team with "international credibility" to manage Turkey's finances.

Price war. The world's largest solar manufacturer slashed prices for a key component, stoking a price war. 

Ruled illegal. A court in Japan ruled the country's lack of recognition for same-sex marriage violates the constitution.

Snub to big money. Italy's top football league, Serie A, plans to sidestep private equity firms by developing and selling its own media rights.

What they said 

"Run, don't walk... Either you are running for food, or you are running from becoming food."
Jensen Huang
CEO of Nvidia
Huang spoke at National Taiwan University at the weekend, before his company reached the $1 trillion market capitalization landmark.

Winklevoss twins try to pivot

One key story, every weekday

The Winklevoss twins, OG Bitcoiners, face a raft of challenges in a changed crypto landscape.
Photo illustration: 731; Getty Images (2) 

Since going all-in on Bitcoin over a decade ago, Tyler and Cameron Winklevoss have had their share of ups and downs. But these days, issues around the billionaire twins' Gemini crypto exchange just seem to keep piling up.

Read The Big Take.

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

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