Wednesday, May 1, 2024

How bad is bad?

The Readout with Allegra Stratton

British political anoraks have just one more decent sleep before three nights of insomnia, as the local election results will dribble out over Thursday, Friday and Saturday. (My tip as a veteran of political all-nighters: get an early night with magnesium sleep spray tonight.) 

Fellow Readout writer Ailbhe Rea, together with Isabella Ward, has been out on the election trail in this great piece of shoe-leather journalism (though I hope they'll have been in trainers) to try to figure out what it all means.

There are more than 2,500 council seats up for grabs, as well as two mayoral battles that will be totemic in different ways in the Tees Valley and the West Midlands. The incumbents, Ben Houchen and Andy Street respectively, are both big candidates. As the former CEO of John Lewis, Andy Street brought C-suite cred to running a region that includes the UK's second-biggest city; while Tees Valley mayor Ben Houchen is a large laconic character.

Andy Street, mayor of the West Midlands Photographer: Hollie Adams/Bloomberg

As Ailbhe and Isabella point out, the harvest of results is unlikely to be pretty for the Tories. But even though they are set to lose between 400 and 500 out of 900-odd council seats that the Tories are defending, analysts suggest Rishi Sunak's fate hangs on these two mayoral fights.

Here's the piece: "It's a mark of the personal standing of the two men — both in office since 2017 — that they're in with a shout. The Tories trail Labour in some national polls by over 20 points, and neither candidate serves an area that could be described as a Conservative heartland." Houchen's fiefdom is traditionally Labour, while Street straddles a broadly equal number of Tory and Labour parliamentary constituencies.

Rishi Sunak speaks to Tees Valley Mayor Ben Houchen in 2022. Photographer: Owen Humphreys/PA Images/Getty Images

Houchen, in particular, is a test of the cement gluing together the Red Wall. The "levelling up" agenda lost its way almost immediately after Boris Johnson achieved his historic realignment at the last general election, with the government unsure how to deliver for these voters within a single parliament. Should it be quick wins with new hospitals and schools in their area or a longer-term project to lift investment and living standard? The latter was probably the more sensible option, but tricky to pull off in one parliament, before the next appointment with voters.  

Amidst this indecision, Houchen just got on with it. He took Teesside airport into public ownership, attracted an outpost of the Treasury and a freeport to the area, and began regenerating the steelworks that used to lie like a slain dragon visible all around the area (although Labour has also alleged corruption here). He is also one of the most effective defenders of the green agenda, which makes sense given for his patch it means jobs and investment. To me, he's one of the more interesting politicians out there.

Tomorrow night we see if these two big beasts can buck the polling trend. Just as striking will be what the turnout is. The "majority" of voters in those regions spoken to for the piece did not plan to vote at all. For them, these contests just don't matter enough. If only Sunak could say the same.

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What just happened

The stories you need to know about this evening

Rwanda going nowhere

The first migrant has left the UK for Rwanda. The unnamed man was not on one of those whose flights which have been subject to a year of parliamentary battle royale, but was with a separate scheme – he was paid £3,000 to voluntarily relocate and went on a commercial flight. This came the same day as official numbers show that immigration has dropped sharply after visa curbs. This might have represented a different type of migration, but it was no less a problem for the government.

Andrew Marr writing in the New Statesman quotes a Labour source as saying they are likely to continue the scheme while they negotiate different returns agreements.

This has caused consternation among their followers, with respected commentators warning it could be toxic to Labour's coalition of voters, some of whom want firmness on illegal immigration but a considerable number will want a softening — including those it needs to win back in Scotland. Indeed, their problems could be very similar to those that hit a Tory government trying to service both the Red (keen for a migration crackdown) and Blue Walls (more liberal). 

It reminds me of this piece from Bloomberg a fortnight ago, which looks at countries facing migration problems across the globe. New Zealand – that famously open and tolerant set of islands – is cracking down as its population reached a record high, putting intolerable pressure on housing and public services. Keir Starmer may find, like the leaders of all the countries Bloomberg visits in this piece, that he has actually fewer options than he thought.

The big number

0.4%
UK house prices unexpectedly dropped by 0.4% in April, the second monthly fall in a row, according to Nationwide.

How Ozempic gobbled up Denmark's economy

One key story, every weekday

The Novo Nordisk headquarters in Copenhagen. Photographer: Carsten Snejbjerg/Bloomberg

There is no escaping Ozempic and Wegovy. The diabetes and obesity drugs are a global phenomenon. They've won over the rich and famous, generated billions in sales and blown open a new market for weight loss drugs, which Goldman Sachs estimates will reach $100 billion a year by 2030.

The development of semaglutide, the key ingredient in the medicines, has also transformed their maker, Novo Nordisk, into Europe's most valuable company, with profound implications for its home country of Denmark. Novo's market capitalization of more than $570 billion is bigger than the Danish economy. Its philanthropic foundation is now the world's largest, with assets twice those of the Gates Foundation.

Little in Denmark can escape Novo's gravitational pull.

Read The Big Take.

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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 Bloomberg UK on X.

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