Weekend Box #115: À La Modi? Not Any More…, Debates & more
Welcome to The Weekend Box, Audley’s weekly round-up of interesting or obscure political, business and cultural news from around the world.
A CLEAN FIGHT? THAT’S UP FOR DEBATE…
Tuesday saw the first of two scheduled pre-election TV debates between Conservative Prime Minister Rishi Sunak and Labour leader Sir Keir Starmer. It was a bad-tempered debate, after which snap polling and most commentary gave Sunak the edge. Welcome news for the Tories, after a misfiring start to the campaign and the added challenge of Reform’s Nigel Farage standing in Clacton, undoubtedly eating into their part of the vote.
Sunak came out swinging. He claimed, 12 times, that Starmer’s government will land every household in Britain with £2,000 of extra taxes based on figures produced by “independent Treasury officials.” Within 24 hours of the debate, both aspects of the claim were discredited. In fact, James Bowler, the Treasury permanent secretary, said ministers had been told not to suggest civil servants had produced the figure, in a letter sent to Labour the day before. Starmer missed a chance to strongly refute it at the outset.
So why did Sunak make the claim so determinedly, when it was bound to be shown to be false? Audley thinks the strategy was to land an eye-catching claim that would inevitably be picked up in commentary by other political journalists and headline-writers, then repeated by Labour when forced to deny it.
Labour have of course done so, but less forcefully than they might, because the claim exposes their vulnerability on tax rises: they have pledged not to raise any taxes on working people, claiming that their spending can be covered by growth, taxing non-doms, and VAT on private school fees. In reality, they almost certainly will have to, but can’t admit so. Why? A majority of us voters may claim to support higher taxes for better services, but Labour know that in the voting booth, self-interest rules.
Image credit/Foreign and Commonwealth Office/License
À LA MODI? NOT ANY MORE…
Pollsters are not, as a rule, friends of the Weekend Box. However, we encourage readers to spare a thought for Pradeep Gupta, Managing Director of polling company Axis My India, who broke down in tears on a live TV panel as India’s election results contradicted his agency’s exit poll predictions in spectacular fashion.
As the final votes were tallied on Wednesday, it was clear that Narendra Modi’s BJP Party had not cruised to victory as expected. His party lost 62 seats, bringing its total down to 240, below the 272 required for a parliamentary majority. This compares to the 234 won by the opposition INDIA alliance, who had been all but written off.
Despite the shock, Modi remains Prime Minister, with BJP forming a coalition relatively speedily. But it still represents a humbling moment for Modi, who has deliberately sought to create a cult of personality as an all-conquering politician and a quasi-religious leader. One analyst said Modi’s goal is to be “bigger even than Gandhi.”
India’s economic and population growth has led it to become a major geopolitical player, helped by Modi’s focus on international affairs. His cosying up to Putin and ongoing purchases of Russian oil and arms despite its invasion of Ukraine highlights Modi’s determination to forge a non-Western aligned path for India. These election results won’t automatically change this course, but Modi may find himself worrying more about domestic rather than international affairs.
Commentators are suggesting unemployment, rising prices, and growing inequality proved Modi’s Achilles heel, rather than distaste at his rising authoritarianism. Nevertheless, with Modi now having to deal with coalition management and facing a newly emboldened opposition, his strong-man approach will be challenged.
It’s a reminder of the power of democracy – and a timely one at that.
Image credit/Conall on Flickr/License
LIBERTÉ, ÉGALITÉ, SECURITY?
Late last month French authorities foiled a planned terrorist attack on a venue set to host football matches during the Paris Olympics. According to France’s Directorate of Internal Security, an 18-year-old man was arrested on suspicion of plotting an attack on the Geoffroy-Guichard stadium in Saint-Etienne, a football ground in southern France that will hold a number of matches during the Olympics.
Security for the 2024 Summer Games is proving to be an increasingly concerning (and expensive) endeavour for the French hosts. French authorities estimate taxpayers will foot a security bill for the Games of between three and five billion euros.
Currently, the Olympics opening ceremony is set to be the first to be held outside a stadium, with a plan for the 10,000 athletes to sail down a 6km stretch of the Seine on 160 barges.
However, President Macron has indicated a potential relocation of the ceremony to a more secure venue. The Seine, which flows through central Paris, is much harder for France’s security apparatus to secure than more contained spaces like the Stade de France or Trocadero square. Security agencies have highlighted possible risks such as vulnerability to drone attacks and snipers.
Concerns have heightened following recent activities of Islamic State (IS)-linked groups, who carried out a mass shooting in Moscow in March, and threats by IS to Champions League matches in Paris in April this year.
There are also fears of cyberattacks. During the 2018 Winter Olympics in Pyeongchang, Korea, the opening ceremony was disrupted by malware attributed to Russian hackers which took down the public WiFi, display monitors, and access to Olympic websites.
The National Cybersecurity Agency of France (ANSSI) has been rigorously preparing for the Olympics, conducting penetration tests and extensive awareness campaigns. However, France should be prepared for more cyberattacks on the games, said Franz Regul, head of cybersecurity for the Paris Olympic Committee.
LSE: SHE-IN OR OUT?
The London Stock Exchange has long been in need of a knight in shining armour to come to its rescue. Unfortunately, the only knight on the horizon comes not in chainmail and a helmet, but in ethically-questionable fast fashion.
Shein, the Chinese-owned online retail behemoth, is seeking a place to IPO. Given its touted $70bn valuation, this would be an easy sell were it not for accusations of various human rights abuses in its supply chain, including the use of cotton produced by forced labour in China’s Xinjiang region.
The US’ hawkish approach to Chinese business continued when approached by Shein as a potential destination for IPO, with the SEC mandating a public filing before its application could be accepted. Spurned by one suitor, Shein turned to other markets, including London. Its executive chairman Donald Tang has met with Tory and Labour politicians recently, both of whom are said to have welcomed the potential listing.
This news prompted predictable rumblings from fund managers and trade bodies who oppose the move. The UK Sustainable Investment and Finance Association has said it did not want London to become a "listing place of last resort for companies with poor human rights records,” while a UK fund manager told the FT: “I don’t think anyone with an ESG team will be able to buy it. It smacks of desperation for the London Stock Exchange — they’ll take anything.”
The confidential filing could come as soon as this week. Whatever the outcome, we’ll have an answer to just how desperate the LSE is.
Image credit/Peter on Flickr/License
BAILLIE GIFFORD IN THE BAD BOOKS
The typically buoyant atmosphere of Britain’s summer literary festivals has been clouded by controversy, as numerous festivals sever ties with serial sponsor Baillie Gifford in response to activist pressure.
Fossil Free Books, an activist group of “workers in the literary industry,” recently issued a statement calling on Baillie Gifford, investment manager and sponsor of the Hay Festival, Edinburgh International Books Festival, and others, to “divest from the fossil fuel industry and from companies that profit from Israeli apartheid, occupation and genocide.”
The group also called for “all literary organisations, including festivals, to end their relationships with Baillie Gifford,” threatening otherwise “to take action through disruption and by withdrawing our labour.”
After the letter was signed by over 200 authors, and speakers including singer Charlotte Church and comedian Nish Kumar cancelled their appearances, the Hay Festival issued a statement announcing that it had suspended sponsorship from Baillie Gifford.
That was two weeks ago; last week, the Edinburgh International Book Festival also severed ties with the investment manager. Organisers of both festivals have said that “staff were being targeted on social media and accused of complicity in genocide.”
Now, as yet another festival has ended its partnership with Baillie Gifford this week, The Guardian reports the business has cancelled all remaining sponsorship of literary festivals.
These developments have provoked a backlash to Fossil Free Books, as some argue the Baillie Gifford investments the group takes issue with are not significant enough to warrant the action taken. Festival director Adrian Turpin has also expressed concerns about the arts losing money “because the purity test has been set so high” for corporate sponsors.
Fossil Free Books meanwhile states that its demand “has always been that Baillie Gifford divest their stakes in companies profiting from human rights abuses so that they can continue to support literary festivals across the country.”
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@audleyadvisors.com.
For now, that’s The Weekend Box officially closed.