UK in Crisis: Should Covid claim another victim while self-righteous wrath sets the tone?

Blain’s Morning Porridge – Jan 13h 2022: UK in Crisis: Should Covid claim another victim while self-righteous wrath sets the tone?

“My chances of being PM are about as good as the chances of finding Elvis on Mars, or my being reincarnated as an olive.”

This morning:  Boris apologised – but is it too late? Resolving the innumerable crises facing the UK requires political focus, and less of the politically expedient indignation being displayed in parliament. It won’t make anything better, threatens further destabilisation, and diminish the UK’s global competitiveness..  

 The objective of the Morning Porridge is to connect the dots on markets – so let me ask the most pertinent question today: Would you be a buyer of UK plc? Probably not.

The optics from Westminster look terrible. The prospects for the nation look even worse. Its situation normal: FUBAR!

Coronavirus was a terrible and tragic event for innumerable families. Many people are justifiably angry having watched from afar as loved ones died alone. Yet, the events in parliament yesterday were a masterpiece of staged-managed faux indignation. The self-appointed Covid Truth and Reconciliation Committee has a whole list of names pricked, queued for the tumbril, and a terminal appointment on the Tower’s chopping board – like that is going to change anything…

The problem is such grandstanding while the government is on the ropes doesn’t achieve much – except make a bad situation worse. While Boris flounders, we can forget any meaningful effort to deal with the impact of soaring Energy prices on consumers, addressing the insatiable appetite of the NHS for more and more cash to do less and less, and as for the perceived benefits of Brexit? Well, that’s a boat that’s already sailed….

None of the critical crises blighting an increasingly dysfunctional Blighty look likely to be fixed as government lurches from crisis to catastrophe.

Every politician is looking to their own survival or advancement. Prime Minister in Waiting, Rishi Sunak, made sure he was out of London and singularly failed to post support for the PM. The leader of the Scottish Conservatives wisely put the boot in with the first call to resign – knowing Scots will love him for it. Et tu Brute? As new Tory MP spilloried the prime minister in the hope they might be able to hold on to “Red Wall” seats, something extraordinary happened in Parliament yesterday: Labour party leader Sir Kier Starmer looked almost competent and actually scored some telling blows.

The latest polls say Labour is leading the Tories. There was a time that would have caused me to rejoice – but now? Years of Tory rule has shown them mired in scandal, disregard for rules, and arrogance. But Labour shows little sign of a becoming a credible government.

Unless Boris goes against his grain and gives up, the reality is little is likely to change in the short-term. Next week we’ll see a civil servant’s report into the Tory Covid Parties. It might say a few damning things, apologies will be made, and that that will be it.

What happens next will be “interesting”. It’s likely the government will lurch on from crisis to crisis for another 3 years. Boris may or may not fall. Who would really want to take on the reins of power ahead of local elections in May (where the Tories will be spanked), ahead of massive energy bills in Q2 (when the Tories will be blamed), and the possibility inflation plunges the UK into a stagflationary recession later this year?

Who knows? Maybe Boris will remain – and maybe have learnt a lesson.

Yet, improbable as it may seem, this morning I feel deeply sorry for Boris. Who would have thought a lifelong Labour voter like myself would ever say it…

Whenever the opportunity presented itself, I’ve never hesitated to do Boris down, to lambast him for all his innumerable faults, and to repeatedly call him out for the way he’s diminished the office of Prime Minister. Boris makes us look stupid and that does not make Britain a better place..

But this business of the “summer party” at Downing Street? Come on. Is it worth breaking the nation on? Let it rest…

Take off the Covid Indignation Goggles and think about it. The email sent to the 100 Downing Street Staff is entitled: Socially distanced drinks. It specifically says: “this evening”, “in the garden” and “bring your own booze”… That is not a planned party designed to mock the populace.

I can pretty much imagine how it happened. Right through the pandemic staff worked around the clock in the complex of offices beneath the Downing Street residences. On a warm, balmy May evening.. probably as they were discussing easing covid restrictions, someone thought: “it’s a lovely evening… what’s wrong with a little Distanced Social moment with colleagues in the large spacious gardens out the back.” – the same guys they’d been sitting next to all day every day.

Tell me you would not have done it yourself?

We were all depressed about Covid Lockdowns back in May 2020 – and we all remember how wonderful the weather was as we celebrated VE Day. It cheered us up as we struggled with lockdown, doing our part by not mixing with strangers. And I am sure the majority of the staff who gathered 2 meters from each other in the Downing Street Garden felt the same way that day after work drinking the prosecco they’d bought from the newsagent next to Westminster tube station.

I was probably that same week when my wife and I, and our son snuck out on my boat and spent a night moored up on a river elsewhere – out of sight and mind. It was maybe the same week I shared cheeky lagers sitting on the shore after I ran into a chum who works for a major institution while out for a walk. We all kept our moment very quiet and low-key, concerned some Corona-Nazi would report us, or create a stink.

Worse things were done during the Pandemic. There was an almighty scandal in our village when a bunch of yummy-mummies managed to get themselves and their partners vaccinated right at the start of the programme – ahead of everyone else. If they’d kept it quiet no one would care, but they boasted about it. They were foolish to brag, but they were hardly evil incarnate – which is how Boris is now being painted.

Lest we forget, Boris had a pretty bad time with Covid himself.

Yes – Boris should have known better than to go to the “socially distanced gathering”, yes, he probably should have stopped it. But if we really want to hang and quarter Boris the Buffoon.. then stop and ask… “Let he without sin cast the first stone.”

Boris is a complete Richard, but he’s what we’ve got… Have you looked at the alternatives? Sunak lacks experience, and there are questions to be asked. Javid is highly competent, but could he win? If not, and you really, really feel the need to hang Boris, I have one thing to say to you:

 Yes, Prime Minister Gove..

 Please…. No..

Five things to read this morning

FT – Citadel Securities sells $1.2 bn stake to Sequoia and Paradigm

WSJ – Turks Pile Into Bitcoin and Tether To Escape Plunging Lira

WSJ – Fed’s Bullard: Four Interest Rate Rises in 2022 Now Appear Likely

Bberg – For Macron and France, It’s the Economy, Stupide

Bberg – Fed Says Economic Optimism Showing Signs of Cooling in Places

Out of time, and back to the day job..

Bill Blain

Strategist – Shard Capital