Weekend Box: Draghi resigns, Commonwealth Games & more
Editor’s Note
Welcome to the Weekend Box, Audley’s weekly round-up of interesting or obscure political, business and cultural news from around the world.
At the end of every busy week in Westminster, ministerial private offices ask their departments to submit papers to the ‘weekend box’ for Ministers and Secretaries of State to catch up with over the weekend. Similarly, we would like to send you into the weekend with a few stories to catch up with at your leisure.
The Weekend Box will be taking a short recess over the summer and will be back in September.
So, for the last time for a little while, let’s delve into the Weekend Box.
THATCHER’S TRUE HEIR?
Midway through Sunday’s Conservative leadership debate on ITV, the former Chancellor Rishi Sunak spoke out in exasperation. “Surely”, he said “the Conservative Party is the party of sound money or it’s nothing”.
This expression of what was once Conservative orthodoxy now seems certain to be put to the test over a long summer of campaigning featuring Sunak and his opponent, current Foreign Secretary Liz Truss.
200,000 or so Conservative Party members will choose between the candidates to decide who will be the next party leader and prime minister – and they are being presented with two very different visions for the UK economy. On the one hand, Liz Truss wants immediate tax cuts to fuel economic growth while the former Chancellor argues tackling inflation, currently running in excess of 9%, is the most immediate priority. Tax cuts, he says, will have to wait until inflation is under control.
In their differing approaches, both candidates are claiming to be acting as the true heirs to Margaret Thatcher whose shadow continues to loom large more than 30 years after she left office. But the polls suggest it is the Foreign Secretary who is closest to the members, with a new YouGov poll giving her a commanding 24-point lead over Mr Sunak.
This is a remarkable turnaround for the former Liberal Democrat turned Brexit true believer.
Demoted for her poor performance as Justice Secretary under former prime minister Theresa May, Ms Truss has flourished under Boris Johnson who saw in her a kindred spirit with her Brexit boosterism and appetite for self-promotion. Johnson handed her a significant role running the International Trade department, which gave her the platform to burnish her new-found Brexit credentials by signing a number of post-Brexit trade agreements – even if many detect a degree of smoke and mirrors given that many were merely deals that were rolled over following the UK’s departure from the EU.
Ms Truss has continued to enjoy Johnson’s favour throughout the leadership contest. Johnson supporting newspapers helped by launching a vicious attack to knock her nearest rival out of the contest and help the Foreign Secretary through to the final round. A number of Johnson aides have been involved in running and coordinating her campaign. And she was boosted by the support of high-profile Johnson supporters such as Nadine Dorries and Jacob Rees-Mogg.
This, perhaps, gives us an insight into the real choice facing Tory members over the next few weeks.
Rishi Sunak has assembled a team of younger talent from across the party, with experienced cabinet ministers such as Oliver Dowden and Jeremy Hunt joined by rising stars such as Claire Coutinho and Laura Trott as key actors on his campaign. A Liz Truss administration would look rather more familiar to observers of British politics during the Johnson years – dashing the hopes of those who hoped to use this contest to signal something of a fresh start.
During his own leadership campaign in 2005, David Cameron would often say that elections come down to a simple choice. One party talks about the past and they lose. The other talks about the future and they win.
With the next general election looming in around 18 months’ time, the decision Conservative members make over the coming weeks will be crucial. At the moment, polls suggest members will choose the tried and trusted over the new. With voting opening at the start of August, Rishi Sunak probably has around two weeks to make them change their minds.
THE LONG JOURNEY TO BRUM
The Opening ceremony of the 2022 Birmingham Commonwealth Games takes place in less than a week. But anticipation has been building across the Commonwealth for months.
On 7 October 2021, Her Majesty The Queen placed her message to the people of the Commonwealth into the Queen's Baton and handed it to the first baton bearer, Paralympian Kadeena Cox. This marked the start of the Queens Baton Relay, a 269 day international journey to every corner of the Commonwealth. The relay has covered over 90,000 miles and has visited 72 Commonwealth countries and territories, where over 7,500 baton bearers selected from sport and civil society have carried the Baton through their communities.
This will be the seventh time the UK has hosted since the first Games in 1930, Glasgow having been the most recent in 2014. Home nation England last hosted in Manchester in 2002 and will be looking to capitalise on home field advantage, having been second at the Gold Coast games with 136 medals overall and 45 gold medals. The netball team in particular will hope to defend their title after they beat Australia for gold in dramatic circumstances in 2018.
A number of new disciplines debut in Birmingham with mixed 3x3 basketball and mixed synchronised diving appearing for the first time. World T20 champions Australia get the women’s cricket fixtures under way against India in another new addition to the schedule.
With net-zero commitments in the limelight, sustainability is a key consideration. Birmingham has committed to hosting the first carbon-neutral Commonwealth Games. Initiatives include 72 new urban woodlands and 2,000 acres of new forests planted to help offset emissions, sustainable transport for spectators and free water to reduce plastic waste. The true extent to which Birmingham manages to achieve this will not be known until after the event. But if it does manage to achieve its goals, it will set the bar high for future events.
At the opening ceremony, the Baton will be handed back to Her Majesty The Queen (or her representative) to read the message that started its journey at Buckingham Palace. Baton bearers across the world (including this Audley team member who had the honour of carrying the Baton in 2018) will watch with pride knowing the role they played in getting it there.
NOT-SO-SUPER MARIO
This week, Italy’s prime minister, Mario Draghi, resigned. Again.
Having tended his resignation on 14 July, only for it to be rejected by President Sergio Mattarella in a bid to avoid an early election, Draghi’s attempts finally came to fruition on Thursday amid coalition in-fighting.
Draghi has presided over a coalition of parties since February 2021, when he was appointed to lead a government of national unity.
There were high expectations for the former head of the European Central Bank, an acclaimed and well-respected figure and ‘star’ economist, most notably credited with saving the eurozone in the debt crisis in 2012. Initially, he lived up to them, seeing some of the most impressive popularity ratings for a politician this decade.
He inherited a country riven by political fractures and in-fighting, battered by COVID and a faltering vaccination programme, and economically stagnant at best – in 2020 Italy’s GDP contracted by 9%.
His coalition brought stability and a remarkable period of unity to parliament; he reorganised the vaccine rollout; and drove the country’s economic rebound. Intimately familiar with Brussels, he negotiated a package of reforms for Italy to unlock €200bn in EU Covid recovery funds, positioning Italy as a leading figure in the post-pandemic recovery of Europe.
But the prime minister who declared, “Unity is not an option but a duty” in his first address to Senate, has found out that some within his coalition were not so duty-bound.
Tensions had been simmering for some time, his hard-line approach to negotiating terms of economic reforms and tough stance on Russia angering some members of his coalition. Things came to a head last week when leading coalition partners, Five Star, revoked support on the government’s economic stimulus package. In response, Draghi called a confidence vote in his leadership, which was boycotted not only by Five Star, but also two other coalition partners: Matteo Salvini’s hard-right League, and Silvio Berlusconi’s Forza Italia.
Draghi will remain in post until elections are arranged, likely in Autumn, when Italy looks set for a move to the right. What this will mean for Italy’s deployment of EU funds and contribution to European recovery remains uncertain, but the unfortunate timing of developments in the euro-zone’s third largest economy won’t be lost on the corridors of power in Brussels.
As inflation and the cost-of-living edges higher, and Draghi’s former employer raises interest rates for the first time in over a decade, political uncertainty is the last thing required. All of Europe, not just Italy, should be alive to what comes next.
THE BEST LITTLE ARMY IN THE WORLD?
Britain is at war. We have been for years.
We do not realise this. Why should we? Even after Russia’s invasion of Ukraine – a classic ‘failure of NATO deterrence’ - many of our politicians and most of our media, whilst intent on calling Russia out, applauding our supply of anti-tank weapons to Kyiv, and being individually welcoming to Ukrainian refugees, still see this as a ‘quarrel in a faraway country, between people of whom we know nothing’ - as Chamberlain put it. It’s to do with us, but not really.
In Europe, on the other hand, the penny is dropping. There’s nothing like the prospect of a cold winter with no gas to heat your home for concentrating the mind. Governments across the continent are now committing to an increase in their defence budgets to meet the threat of an aggression long thought dead and buried.
Not in Britain. Here, the Government claims that far from invalidating last year’s Integrated Review, which sees the British Army reduced to levels not seen since the demobilisation of 1714, the Ukrainian experience has demonstrated the foresight of the Review’s authors in coming to the conclusions that they did. Quite how, in current circumstances, reducing our holdings of tanks from 227 to 148 and the size of the army by 9,500 reinforces their pre-February 25th wisdom, I am not entirely sure. It perhaps draws on the same certainty of logic that prompted Boris Johnson to declare in November last year that “we have to recognise that the old concepts of fighting big tank battles on the European land mass are over.”
If it still holds true – as it should - that the first responsibility of government is to protect the people from external threats, then this stubborn refusal to confront the changed reality represents a potentially catastrophic dereliction of duty.
AMAZON CONTINUE THEIR HEALTH KICK
Another week, another Amazon acquisition. This week saw Amazon announce another stride into the healthcare industry, through their acquisition of One Medical, a US primary care company. The deal, valued at $3.9bn, is the latest in the retail giant’s leap into healthcare (and indeed other non-adjacent markets). Ever hungry for expansion, Amazon currently have a market cap of $1.268 trillion making them the worlds 5th most valuable company and hot on the heels of Google in 4th place.
The company they acquired, One Medical, provides virtual and in person services and operates in 25 markets. Of course, the world of virtual services grew rapidly as a result of the pandemic, with people continuing to turn to apps, the web and anything non-physical as the world adjusts to a new normal.
Of the One Medical acquisition, Neil Lindsay, Senior Vice President of Amazon Health Services commented “We love inventing to make what should be easy easier… we see lots of opportunity to both improve the quality of the [healthcare] experience and give people back valuable time in their days”. Amazon, constantly looking to reinvent and identify the next big market to enter (and some would say control), recently also acquired Whole Foods as part of their entrance into the grocery space, their largest acquisition to date.
Barry Lynn, executive director of Open Markets Institute said “Amazon’s takeover of One Medical is the latest shot in a terrifying new stage in the business model of the world’s largest corporations. The deal will expand Amazon’s ability to collect the most intimate and personal information about individuals in order to track, target, manipulate and exploit people in ever more intrusive ways”
Watch this space on what and who they’ll snap up next…
And that’s it for this week. I hope you found something of interest that you might want to delve into further. If so, please get in touch at cwilkins@audley.uk.com.
For now, that’s the weekend box officially closed.