Charlotte Street Partners

DAILY BRIEFING

DAILY BRIEFING

Return of the Cameo King

Written by Scott Reid, associate partner
Edited by Kevin Pringle, partner

11 January 2022 

Good morning,

Farage is back. Again.

Or perhaps, following his call in last week’s Telegraph that a revolt on the right is brewing and he’s ready to be part of it, it’s more accurate to say that the former UKIP, Brexit and Reform Party leader never really left.

After all, he’s been busy for an absent man. Since his last supposed return in November, Farage has interviewed Donald Trump on his own designs for a second run at power, taken on a daily primetime slot for GB News, and, for that special someone, has offered (now discontinued) personalised video messages via Cameo for £75 a pop.

I scoff but the UK political establishment underestimates Farage at their peril. The reason being his unique ability to connect a vast constellation of seemingly disconnected issues where the government is on the ropes, and to do so loudly and frequently. Anger over a botched Brexit and refugee Channel crossings? Tick. A referendum on net-zero? Check. A threat to defy future lockdowns? Farage is your guy.

Yesterday, Farage was front-and-centre in supporting Novak Djokovic’s successful appeal to have his Australian visa restored after failing to comply with vaccination rules on entry to the country, even flying to a snowy Belgrade at short-notice to interview the Djokovic family. A resulting Twitter spat with Sir Andy Murray which features on many of this morning’s front pages shows Farage’s continuing knack to make the most of a controversy.

The threat to the government, and the prime minister in particular, is that these issues present an emergent worldview which poses problems on the Conservative benches. Where once some of Boris Johnson’s loudest cheerleaders saw him as the populist who delivered Brexit, he is now a big state, lockdown-loving persona non-grata, too, trigger happy in his moves to subsidise green energy through higher bills and tax rises. The party’s right wing is taking note: Steve Baker, an MP who was instrumental in Johnson’s rise to power, has railed against the current net-zero strategy and that his constituents are not going to vote to make themselves “poorer and colder”.

Farage thinks the cost-of-living crisis that many expect in 2022 is the powder keg that will ignite government opposition. He writes that if Reform Party leader Richard Tice can seed the message that 25% of rising electricity bills subsidise green energies, and that a five per cent VAT energy rate has, despite promises, not been removed, then the party has “a big chance”.

He may be onto something. Yesterday, YouGov polling suggested up to a third of voters expect their energy bills to become unaffordable this year. That matters for the Red Wall seats where Johnson won his majority. As Aditya Chakrabortty writes in The Guardian, “In true-blue Woking, only 6% of households are in fuel poverty; in Workington, by contrast, which went Tory only in 2019, that proportion is nearly 14%.”

And with suggestions today that a £1 billion green levy which would add £29 to the average annual energy bill may be dropped after all, Farage’s strategy seems to be getting through.

News

Over 100 people were invited to a drinks party in Number 10 during lockdown last May, an email obtained by ITV News has revealed. The email titled ‘Socially Distanced Drinks!’ was sent by the principal private secretary to the prime minister, Martin Reynolds, and included speechwriters, press officers and the door team at number 10. The gathering on May 20, 2020, is separately reported by the BBC to have been attended by around 30 people including the prime minister and his wife Carrie Johnson, according to witnesses.

The UK government is reported to be pressuring its scientists to approve a reduction in the Covid isolation in England to five days. The move comes after the UK Health Security Agency acknowledged wrongdoing in miscalculating data from the US, which had led to the UK imposing a seven day isolation initially. In Scotland today, first minister Nicola Sturgeon is expected to announce plans that will allow a greater size of crowds at sporting events as moves towards “learning to live” with coronavirus.

Scottish Labour leader Anas Sarwar has challenged suggestions that some candidates for his party in Scotland could stand on a platform in support of a second independence referendum. Sarwar said that the power to select candidates rested with Scottish Labour “alone” and that his party was committed to reforming the UK. His comments challenged sources close to UK Labour leader Sir Keir Starmer reported in The Sunday Times that “You don’t have to have a binary position; you can have people with different stances.”

The past seven years were Earth’s hottest on record according to the latest annual data released by the EU’s climate watchdog. The Corpernicus Climate Change Service (C3S) found that levels of carbon dioxide and methane grew year-on-year with no signs of slowing, with concentrations of methane in particular growing “very substantially”.

Business and economy

Housebuilders will be forced to cover the costs of fixing unsafe cladding, the UK government has announced. Speaking to the House of Commons yesterday, housing secretary Michael Gove confirmed no leaseholder in a building higher than 11m “will ever face any costs” associated with cladding replacements, addressing housebuilders who abused the system that the government was “coming for you”.

KPMG has confessed to misleading the Financial Reporting Council over its role in auditing the outsourcer Carillion which collapsed in 2018. In a statement issued yesterday at the start of a five week disciplinary tribunal into the behaviour of the auditor and six employees, chief executive Jon Holt said it was “clear” misconduct had occurred, including the creation of fake documents.

Companies raised $101 billion on the global bond markets in the first week of 2021, marking the second best year on record. Although the figure for 2021 was slightly higher at $118 billion, it is thought the rush offers an early glimpse of companies seeking to access debt markets ahead of short-term interest rate rises by major central banks. 

Columns of note

James Kirkup writes in The Times that hopes of building a fairer society post-Covid are being dashed by short-termism. In social terms, Kirkup writes that workers are growing weary of hybrid working and may be willing to return to the office at the cost of newfound benefits; and in policymaking terms, that the government has been quick to seek sticking plaster solutions to the supply chain shock and rising energy costs. The problem owes to desire as much as demand, Kirkup concludes, causing the UK to backslide.

In the Financial Times most-read column of the new year, Pilita Clark ponders – in the wake of her resolution to read more – how so-called “super readers” can make it through 52 books a year. Her tips are highly practical including waking up early, skimming non-fiction, reading topics simultaneously and in clusters, and relying on your mobile’s airplane mode. Paraphrasing, she puts that: “Reading is the shortest, most established path to it total self-improvement.”

Markets

What happened yesterday?

London’s FTSE 100 was in negative territory yesterday, falling 0.53% to 7,445.25 points but fared better than its international peers amid global concerns around inflation and rate rises. The Nasdaq 100 plunged 10% to its lowest level in 10 weeks with the S&P 500 down 0.7% and, on this side of the Atlantic, the Stoxx Europe 600 was down 1.5%. Sterling was mixed, trading 0.15% weaker on the dollar at $1.36 but gaining 0.09% on the euro at €1.20. Bitcoin, meanwhile, fell to a five-month low of $40,000 amid a wider sell off in risk assets, including tech, spurred on by the rate rise worries.

In company news

  • Housebuilders were worst affected on the FTSE following the government’s announcement that it will force them to pay for replacements to unsafe cladding. Persimmon (-5.15%), Barratt Developments (-4.02%), Berkeley (-3.63%), Taylor Wimpey (-3.47%) and Bellway (-4.02%) were all in the red.
  • Beyond the equity markets, Virgin Media O2 announced customers across its two UK phone brands would not pay roaming charges when travelling in the EU.
  • Ikea announced it would reduce sick pay for unvaccinated staff forced to self-isolate from Covid-19 to the statutory minimum.
  • And WH Smith formally began the process to appoint its next chairman, supported by headhunters Lygon Group.

What’s happening today?

Trading announcements

Tasty Plc

UK economic announcements

(01.00) BRC Shop Price Index

(09.30) Consumer Credit

(09.30) M4 Money Supply

(09.30) Mortgage Approvals

(09.30) PMI Manufacturing

Intl economic announcements

(07.00) Retail Sales (GER)

(08.55) Unemployment Rate (GER)

(15.00) ISM Manufacturing (US)

(15.00) ISM Prices Paid (US)

Source: Financial Times

did you know

Saudi Arabia imports both sand and camels from Australia.

Source: @quiteinteresting

Parliamentary highlights

House of Commons

Oral questions
Business, Energy and Industrial Strategy (including Topical Questions)

Ten Minute Rule Motion
Co-operatives (Employee Company Ownership) – Christina Rees

Opposition Day Debate

Adjournment

Proposed closure of Solihull police station – Julian Knight

House of Lords

Oral questions

Various

Legislation
Health and Care Bill – committee stage (day 1)

Short debate

Supporting the British farming industry to combat increased production costs resulting from the ongoing labour shortages and increased competition from the Australian and New Zealand markets – Lord Redesdale

Scottish Parliament

Topical Questions

Various

First Minister Statement

Covid-19 Update

Scottish Government Debate

Addressing the Impact of Labour Shortages on Scotland’s Economy

Legislative Consent Motion

Animal Welfare (Kept Animals) Bill – UK Legislation

Committee Announcements

Members’ Business

Endometriosis – Rachael Hamilton

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