London Playbook: London calling — Brace, brace — Liz vs. the Libs

 

London Playbook: London calling — Brace, brace — Liz vs. the Libs

BY ESTHER WEBBER

AUGUST 31, 2022 8:02 AM

 

POLITICO London Playbook

By ESTHER WEBBER

https://www.politico.eu/newsletter/london-playbook/london-calling-brace-brace-liz-vs-the-libs/

 

PRESENTED BY

UK Fisheries

 

IN MEMORIAM: The world today remembers the last leader of the Soviet Union, Mikhail Gorbachev, who died yesterday at the age of 91. As the man who effectively allowed the Cold War to come to a peaceful end there are plenty of weighty obituaries around — read POLITICO’s here, where David Cohen writes that Gorbachev “shook up a nation that had never fulfilled most of its promises to its people and created a seismic shift in international relations, altering a world that been locked in a nuclear stare-down for four decades.”

 

Paying tribute: Boris Johnson compared Gorbachev’s record of peace to Vladimir Putin’s war in Ukraine, tweeting that “his tireless commitment to opening up Soviet society remains an example to us all.” Liz Truss added that his “legacy of cooperation and peace must prevail.”

 

But there’s also a dark side to Gorbachev’s legacy. As my Brussels Playbook colleagues write this morning, on Gorbachev’s watch, Soviet troops brutally massacred 22 protestors in Tbilisi in April 1989; in Azerbaijan, the military killed 150 people in the Black January massacre in 1990. Gorbachev is also often reviled in Lithuania for the January 1991 massacre in which 14 civilians were killed by the Soviet army — and in Latvia, for the killing of five people, also in January of that year.

 

Good morning. This is Esther Webber with you for the rest of the week.

 

**A message from UK Fisheries: For decades, British fishers have plied their trade in bountiful Greenlandic waters, but despite the Government’s pledges of new post-2019 ‘Seas of Opportunity’ our distant waters fleet is now completely shut out while others fish on. We can and must do better – and here you can read how.**

 

DRIVING THE DAY

LONDON CALLING: All good things come to an end, and so does the Conservative Party leadership contest. It’s the last hustings tonight in London, in what seems likely to be a valedictory outing for Rishi Sunak and a victory lap for Liz Truss. While Team Sunak stresses his work ethic to the last, Truss’ attention is firmly on two tasks ahead: the cost-of-living juggernaut and preparing for the next election as the Liberal Democrats begin to peer over the blue wall.

 

Reminder: The ballot of party members closes at 5 p.m. on Friday and the winner will be announced Monday. This time next week, they will have their feet firmly under the desk.

 

Party atmosphere: We’re not sure whether it’s completely tone-deaf or a good distraction from everything else, but Playbook hears there will be a DJ set for half an hour before the hustings kick off in London. “They’re just playing music. It’s not like Tiësto or anything,” a Conservative Party official commented when asked for the setlist.

 

Liz’s summer of love: Ahead of the final bid for votes, a member of Team Truss said: “Liz has loved traveling around the country to take part in the hustings, meeting members and answering their questions about her plan for the future. She’s really looking forward to the final one tonight and the chance to explain how she will make sure London thrives.”

 

The harder they come: A Sunak campaign member said: “If Rishi wins it will be what they call a ‘hard win’ — he’s done 130 events plus the official hustings. We think he’s met 30,000 members over the last six weeks.” They estimated Truss has done less than half of Sunak’s member events.

 

Last pitch effort: Sunak himself put out some words, sticking to his tough-on-inflation message. He said: “I have been consistent, clear and honest throughout this contest that we must fix inflation first. Only by supporting people through this winter and gripping inflation can we lay the foundations for growth and prosperity — for lower taxes, a better NHS and a healthy economy making full use of our Brexit freedoms.”

 

BRACE, BRACE: The pressure awaiting the next prime minister is being ratcheted up yet again with a series of stories laying bare the dilemmas they will face. There’s a twin-pack of bracing dispatches from Bloomberg, with David Goodman reporting on a prediction from Goldman Sachs that inflation could top 22 percent next year, while Alex Wickham and Todd Gillespie have got hold of some jaw-dropping Treasury documents suggesting gas and electricity companies could make excess profits of up to £170 billion pounds over the next two years.

 

A cold wind bloweth: The Treasury said it did not recognize the analysis, but regardless of precise figures the story highlights how tough Truss will have to stand in order to resist demands for a new windfall tax. Any fresh levy on profits is something she has set her face very heavily against, as has Kwasi Kwarteng, the business secretary and chancellor presumptive.

 

Small businesses’ big problem: Smaller companies are looking at a rise of around 400 percent in their energy costs, industry heads warn the i’s Richard Vaughan, Chloe Chaplain and Ben Gartside. Business owners are calling on the government to spell out how it will support them while Truss remains tight-lipped on the specifics. A business rate rebate similar to the council tax version for households is one of the most likely options, the i team hears.

 

Pubs call time: The problem is only going to be thrown into sharper relief in the coming weeks as an increasing number of pubs and hotels announce they are being forced to close. In the Mirror, Lizzy Buchan has spoken to head teachers and NHS bosses who fear they will have to cut staff to pay school and hospital energy bills.

 

And there’s more: Grim reading in the Guardian, which splashes on Josh Halliday’s report that food banks across the U.K. have warned of a “completely unsustainable” surge in demand that will prevent them from feeding the hungriest families this winter. Not to mention Andrew Gregory’s detailed read on the NHS, which sums up the situation thus: “The overriding problem for the new Downing Street incumbent is that, while in previous years problems in the NHS centered on specific areas, today the entire house is on fire.”

 

Tough sell: Things are looking so bleak even the prime minister has admitted it. Boris Johnson was in Dorset yesterday pointing at a big hole (insert your own jokes), where he told reporters: “It is going to be tough in the months to come. It’s going to be tough through to next year. And that’s because of Putin’s war in Ukraine. Be in absolutely no doubt, the gas prices [are] being driven by what Putin did in Ukraine. But we are going to get through this.”

 

The message: Johnson is obviously anxious about the impact which the strictures of the coming months will have on public support for helping Ukraine through sanctions and military cooperation, and wants to underline that to his successor. In case that all seems a tad doomster-y, the PM has given an interview to the Express’ Sam Lister and Gary Jones in which he says the British people are “heroic” and will get through the winter before the country bounces back “strongly.” More on that later.

 

Coming storm: Playbook was chatting recently to a Conservative strategist about the scale of the challenge facing the new PM. Their topline warning was blunt: “This makes COVID look relatively straightforward.” They noted there was a certain irony in Truss triumphing on the back of her free-marketeer credentials when “initially it’s just got to be, let’s bail everybody out … there will be a near-nationalization of energy companies. I would be shocked if we didn’t see BEIS officials on the boards for six months or something like that.”

 

Competence wanted: The same strategist observed: “In the early stages of the race it was all about criticizing gender identity and engaging in conversations about free speech. Why is anybody talking about this when people are looking at October thinking ‘I’m going to be wiped out’?” It is a time, they added, for “competent government” and “MPs can’t say they don’t know Rishi and they don’t know Liz, and nor can members. You might not think Rishi is a great retail politician but he’s basically got his act together. Liz hasn’t demonstrated that.”

 

Mark my words: On the front of the FT, Sunak tells George Parker and Sebastian Payne it would be “complacent and irresponsible” to ignore the risk of markets losing confidence in the British economy. He accuses his rival of making unfunded spending commitments that could force up inflation and interest rates and increase U.K. borrowing costs, and says he “struggles to see” how Truss’ promises “add up.” No offense to our pals at the FT, but the choice of outlet reads a bit like preaching to the choir at this stage.

 

Repair Kit: While the PM talks up his achievements and the chancellor pays a visit to the U.S., Kit Malthouse has been busy with cross-departmental planning. The chancellor of the Duchy of Lancaster held a meeting yesterday with ministers and officials across the big departments to discuss “priority risk areas,” such as health, energy supply, cost of living, supply chain disruption, labor market shortages and industrial action — all of which are set to collide over the next 18 months.

 

Coming up Malthouse: A Cabinet Office official said Malthouse “is continuing to drive forward planning for this winter” and “identifying the key operational decisions that can be taken quickly once a new administration is in place to reduce the impact on the public of the global rise in energy prices.” Malthouse has told colleagues it is essential for departments to “maintain pace and grip on this essential work” and that tackling these challenges will be “a marathon not a sprint.” We can’t help wondering which job he’s eyeing up.

 

Fantasy Cabinet latest: The Express’ David Maddox reckons Jacob Rees-Mogg is in line for promotion to business secretary in a Truss administration. As Maddox points out, this would cast some doubt on the future of net zero, with Rees-Mogg said to be keen on ending the embargo on fracking and new oil exploration.

 

PROTOCOL BILL BATTLE: My POLITICO colleague Cristina Gallardo has a great preview of the first major parliamentary battle awaiting Truss, as peers prepare a full-frontal attack on the government’s plans to rewrite the Northern Ireland protocol when parliament returns from its summer break.

 

Getting ready: At a crunch meeting behind closed doors next week, senior peers — including leading ex-judges and barristers — will agree their strategy to try to take down the bill, with peers divided between voting it down completely at its second reading, and amending it heavily and sending it back to the House of Commons with a stark message of disapproval.

 

Timeline: As Cristina outlines, the protocol bill sailed through the Commons this summer with no amendments, and is due to arrive in the U.K. parliament’s upper chamber for its first debates after the political party conference season in early October. Assuming peers settle on amending the bill rather than trying to block it, it could take 11 days to get to third reading. Ping-pong, the process by which the bill is sent back and forth between the two houses as they try to resolve disagreements, could then take several more weeks, potentially delaying the bill’s passage until the end of the year.

 

The targets: Two aspects of the bill are driving their concerns: the U.K.’s plan to use the legislation to switch off parts of the Northern Ireland protocol — which many observers believe would amount to a breach of international law — and the significant delegated powers ministers would gain under its provisions.

 

All eyes on Labour: The bill’s ultimate fate could depend on the Labour Party, which has been cautious under Keir Starmer’s leadership not to take up positions which could be portrayed as siding with the EU against Britain. For more of the nitty-gritty, sign up to Cristina’s weekly email on EU-U.K. relations.

 

**What does the Tory leadership race mean for your industry? Our POLITICO Pro experts offer you granular insights into what the future legislature will look like and how it will impact your business. Learn more on POLITICO Pro here.**

 

LIZ VS. THE LIBS

SURREY NOT SURREY: The cat was set loose among the pigeons yesterday with the news that the Lib Dems are preparing for a possible by-election in Michael Gove’s Surrey Heath seat, as sniffed out by the News Agents’ Lewis Goodall. A Conservative source told the Guardian’s Peter Walker and Pippa Crerar in no uncertain terms that he is not intending to step aside. But Gove, who has made his feelings about Truss clear, is unlikely to get another big job under her leadership, and might just fancy a return to journalism.

 

SCOOP — WATCH LIST: That’s not all. A senior Lib Dem official confirmed to Playbook that the party is undertaking similar preparations in five other seats they have identified as potential by-election territory. These are: Tamworth, where Chris Pincher is the MP; Johnson’s Uxbridge seat; North East Somerset, where there has been some (wild) speculation over a peerage for Rees-Mogg; Nadine Dorries’ Mid Beds, also the center of peerage rumors; and Selby and Ainsty, where Nigel Adams has confirmed he will stand down in 2024 but could head for the Lords sooner. The Lib Dem source said hopefuls in these places would be subject to the more rigorous checks and media prep that come with the spotlight of a by-election compared with a general election.

 

Raab rumors: No such measures are necessary in top Lib Dem target Esher and Walton, where they are sticking with candidate Monica Harding, who cut Justice Secretary Dominic Raab’s majority to 2,743 in 2019. The rumor mill is in overdrive there, too, where the chat from local Tory activists is that Raab could be in line for a peerage since he is out of favor with Truss and facing an uphill battle to hang on to his seat. One Conservative councilor even posted on TikTok about wanting to be the next candidate before hastily deleting it. A source close to Raab gave the gossip short shrift, saying he was “certainly” going to stay and defend his seat.

 

Tricky customers: The Tory source who spoke to the Guardian called the Lib Dems’ maneuvers “yet another example of [their] dirty tricks.” A Lib Dem official responded this was “an odd way to talk about selecting candidates.”

 

SOUTHERN DISCOMFORT: Some argue that Truss needs to do more to shore up her rep in the south than in the north — a point she appears to accept with a piece for ConHome promising more money for the Lib Dem unit in CCHQ. She has made much of her inside knowledge of the Lib Dems’ tactics on the campaign trail, but further work may be needed. A Lib Dem official pointed to the number of blue-yellow marginals where the sitting MP had endorsed Sunak, saying that “because Truss is seen as the continuity Johnson candidate, she’s probably got to do more to reassure blue wall MPs.” A Tory MP in one such constituency said: “I think Liz has a lot of work to do to prove she can win socially liberal, fiscally conservative seats.”

 

Red and blue Cabinet: The i’s Arj Singh reports Truss wants to assemble a “Cabinet of all the talents” that will help her win in red wall towns in the north as well as traditional and rural Tory seats in the south, in a potential departure from Johnson’s right-wing Brexiteer-heavy team. There’s more in that vein from the Express’ David Maddox, who says influential Northern Research Group leader Jake Berry is being lined up for party chairman.

 

Good luck with that: The truth is Truss has strengths and weaknesses on both fronts, and it is maintaining the coalition forged in 2019 which is going to prove difficult. As outlined in this POLITICO piece last week, delivering tax cuts for wealthier traditional Tories and major rail infrastructure in the north is going to be a tall order, to say the least.

 

 

BEYOND THE LEADERSHIP RACE

PARLIAMENT: Still in recess.

 

THIN BLUE LINE: The prime minister is scrambling to demonstrate he has delivered on key manifesto promises as he puts in an appearance with new police officers today. He is expected to speak to officers from one of the 20 Violence Reduction Units set up by his government, saying: “We are cracking down on vile gangs and putting dangerous offenders behind bars for longer — and at the heart of these efforts are the 20,000 new officers who will be out on the streets providing the firepower for years to come in the fight against crime.”

 

Unfortunately for him: The front of the Daily Mail has other ideas, where David Barrett writes up a warning from a former senior officer that British policing has “lost its way’” and the public feels forces have all but given up on crimes such as burglary. Confidence in the police is being damaged by “woefully low” clear-up rates for house-breaking and robbery, according to David Spencer, who has written a damning report on the subject for Policy Exchange.

 

Is this helping? The Johnson interview with the Express mentioned above is headlined, tantalizingly, with an assurance that he won’t be popping up in government again. However his words further down are a lot more ambiguous, declaring: “I’m going to be there to help them, to support in any way I can and I mean that — it’s open support … I will basically be supporting the new administration but I think the new administration … my clear impression is that whatever happens the new administration will be delivering on the agenda — that’s the key thing.” Got that? Good.

 

One last thing: The PM is expected to make an intervention on energy security later in the week, with all eyes on Sizewell C. The Times’ Chris Smyth and Emily Gosden report Johnson is likely to approve the nuclear power station, which could cost up to £30 billion, imminently. The Telegraph’s Daniel Martin has heard nuclear power stations could be fast-tracked under new planning rules in an effort to help solve the energy crisis.

 

LABOUR LAND: The opposition will be cheered by a Deltapoll survey splashed on the front of the Mirror, which finds 82 percent of people want the government to freeze the energy price cap at its current £1,971 average a year. One in four people told the survey they will “definitely” not be able to afford the rise and another 40 percent said they would “probably” not be able to find the extra money, Graham Hiscott reports.

 

Starmer on the pitch: Keir Starmer will be on the Jeremy Vine Show on Channel 5 this morning taking listeners’ calls — a different type of contact sport after showing up for a LOTO five-a-side football game last night.

 

SCOOPLET — Starmer hire: Peter Hyman is joining the Labour leader’s office in September as the party gears up to fight the next general election. A senior Labour Party official said: “Peter has experience both of being part of the team that won the landslide victories of 1997 and 2001 and working at No. 10. In recent years he has been a teacher, headteacher and social entrepreneur in education, setting up two schools and a charity developing speaking skills in young people.”

 

ICYMI: Ben Nunn, Starmer’s former chief of staff, wrote for the Guardian on how Starmer should handle Truss. Spoiler alert: It’s all about the economy.

 

Feel the Bern: Former U.S. presidential hopeful and father of a thousand memes Bernie Sanders will join the RMT’s Mick Lynch for a rally at the TUC’s headquarters in London tonight. Ahead of his appearance he spoke to the Guardian’s Owen Jones, saying that Lynch’s efforts have been “hitting a nerve, because people are tired of being ignored while the rich get richer.” Postal workers are on strike again today after walking out on Friday. Royal Mail said the CWU had rejected a pay rise offer “worth up to 5.5 percent” after three months of talks.

 

IDEAS FOR RENT: The Department for Leveling Up has launched a consultation on proposals for a rent cap for social tenants. Under the plans, a cap on social housing rent increases would be implemented for the next financial year, at either 3, 5 or 7 percent. Housing Secretary Greg Clark said: “We know many people are worried about the months ahead. We want to hear from landlords and social tenants on how we can make this work and support the people that need it most.” Inside Housing’s Stephen Delahunty has a write-up.

 

There’s an app for that: The Times’ Chris Smyth has got hold of ministers’ latest plans to cut backlogs for routine care by enabling patients to use the NHS app to shop around for hospitals with the shortest waiting lists. Health Secretary Steve Barclay wants to give patients “real-time data” on their phones so they can decide whether to travel further to get quicker treatment for non-urgent procedures, Smyth hears.

 

Keeping the lights on: Councils are facing massive increases in costs due to spiraling inflation and the increase in energy costs, the Local Government Association is warning today. New analysis by the LGA and the Association for Directors of Environment, Economy, Planning and Transport found that the costs of street lighting, filling potholes and building new roads have soared, causing pressure on stretched council budgets and delaying works.

 

AUKUS TALKS: Britain’s Defense Secretary Ben Wallace will host his Aussie counterpart Richard Marles, who is also the new deputy PM, in the North West of England today, as part of his first visit to the U.K. since the new Labor government took office in Canberra at the end of May. Cristina Gallardo texts in to say the pair will discuss boosting defense capabilities, including through the AUKUS alliance also involving the U.S. and through a U.K.-Australia collaborative effort to build Type 26 and Hunter Class warships aimed at tackling security threats in the Indo-Pacific. The two ministers will attend together the commissioning ceremony for the submarine HMS Anson in Barrow-in-Furness, and give a joint press conference around 4.45 p.m. U.K. time. Marles will also be on Times Radio at 8.35 a.m.

 

FLOOD OF CRITICISM: Sarah Champion, Labour chairwoman of the international development committee, has written to the foreign secretary over what she calls an “embarrassing” response to the catastrophic floods in Pakistan. “The government’s risible response to this humanitarian disaster arguably amounts to nothing,” she says.

 

FAMINE WARNING: There was an arresting report from Channel 4 News’ Jamal Osman last night on the Horn of Africa, which is currently suffering its worst drought in 40 years. More than 20 million people are at risk of starvation, according to the U.N.’s World Food Program, with Somalia the worst-affected country.

 

BEGUM PLOT THICKENS: Probably the wildest story in today’s papers comes via the Times’ Fiona Hamilton and Dominic Kennedy, who relate claims that a spy working for Canadian intelligence smuggled Shamima Begum and her two friends from Bethnal Green into Syria, and Britain later conspired with Canada to cover up its role. There are now calls for an inquiry, after it emerged that Canada knew about the teenagers’ fate but kept silent while the Metropolitan Police ran an international search for them.

 

ROAD RAGE: The backlash has begun after the Sun revealed yesterday that senior Cabinet ministers who have armed protection will lose their bulletproof Jaguars next year and see them swapped for German-produced Audis. Labour MP John Spellar, who represents Jaguar Land Rover workers in the Black Country seat of Warley, told Harry Cole the decision risks U.K. jobs.

 

UKRAINE UPDATE: Fighting in Ukraine is newly focused in Kherson, where Ukrainian troops are attempting to retake the Russian-occupied region. Kyiv’s much-anticipated counteroffensive launched yesterday and led to street fighting in the southern city, which was the first to fall when Russia began its assault in February. The Times’ Marc Bennetts has the details.

 

NEWS AGENTS OPEN: Ex-BBC stars Emily Maitlis, Jon Sopel and Lewis Goodall returned to the airwaves with the first episode of their News Agents podcast yesterday, which focused on the FBI raid on Trump’s Mar-a-Lago mansion. The episode features the always-mouthy former White House spinner Anthony Scaramucci, plus Trump’s former chief of staff Mick Mulvaney as the trio of presenters deliver a refresher on America’s latest drama — listen here.

 

**A message from UK Fisheries: The seas off Greenland have long offered plentiful cod and haddock to the UK’s distant waters fleet – in 2020 we caught almost 1,700 tonnes in Greenlandic waters. After Brexit we were promised as good or better fishing opportunities as an independent coastal state. However, while competitor nations – including Russia – continue to catch whitefish in these waters, the UK fleet now has no quota at all. We have failed to negotiate a fair deal even though the Greenlandic shellfish industry is heavily dependent on the UK market for its exports. Greenland has said that it is willing to give continued UK fishing access in return for a good trade deal, so at a time when we need to prioritise food security, it’s incredible that the Government does not instruct its negotiators to strike a fair deal for Britain. Click here to see what it must do NOW.**