Sunak still can’t get over the Johnson and Truss debacles
LONDON — From the moment Britain’s Prime Minister Rishi Sunak opened 10 Downing Street last October, he’s been dogged by his predecessors: Boris Johnson, defenestrated after serial scandals, and Liz Truss, ousted after a fateful foray into trickle economics down.
On Thursday afternoon, Mr Sunak’s government faces a deadline to turn over Mr Johnson’s Covid-era text messages, diaries and notebooks to a committee investigating the UK’s handling of the pandemic. It is the latest chapter in what appears to be a never-ending reckoning with Mr Johnson’s messy tenure.
But despite all the headlines Mr Johnson’s misadventures have generated in recent weeks – including new allegations of Ignoring Covid lockdown rules – it’s the ghost of Mr Sunak’s short-lived predecessor, Ms Truss, who economists say should keep him awake at night.
UK government bond yields rose last week to nearly the level that Ms Truss toppled after just 45 days in office. While the cause of this spike is very different from that under Mrs Truss – fear that inflation is deeply rooted in Britain rather than disgust at the tax cuts proposed by the previous government – the political cost to Mr Sunak would be almost as could be serious, with an election coming up in the next 18 months.
Mr Johnson’s story “to some extent foams on the surface,” said Tim Bale, a professor of politics at Queen Mary, University of London. “That’s not to say Boris Johnson’s soap opera can’t hurt Sunak,” he added. “But what drives voters is the deeper issue of the economy.”
In that respect, the market fluctuations are a bad omen. They indicate that investors believe the Bank of England will have to raise interest rates much further to dampen Britain’s stubbornly high inflation, which could push the struggling economy into recession. Fears of rate hikes led to the cancellation of nearly 800 mortgage deals, hurting people trying to buy a home.
It also raises the risk that Sunak will fail to fulfill one of his cardinal commitments as prime minister: to halve inflation by the end of 2023. Although inflation fell below double digits last week, to 8.7 percent, food remained unexpectedly high. Britain has now moved away from Germany, France and Spain, where inflation is much lower and falling faster than economists had predicted.
“The idea of ’sick man of Europe’ strikes again, and when it does it’s hard to shake it off,” said Jonathan Powell, former chief of staff to Prime Minister Tony Blair. “Sunak keeps getting dragged back to the bad old days.”
In Mr Johnson’s case, those bad old times included the partying that broke lockdown on Downing Street in 2020 and 2021, resulting in police fines for both the Prime Minister and Mr Sunak, who was then Chancellor of the Exchequer.
The latest fad began when the chair of the Covid-19 inquiry, Baroness Heather Hallett, asked the cabinet to hand over all communications between Mr Johnson and fellow ministers during the pandemic, including WhatsApp messages, which are a favored way for officials to keep in touch.
The Cabinet Office has so far refused, arguing it has a responsibility to protect ministers’ privacy. It has refused to hand over what it calls “plainly irrelevant” material. Ms Hallett has pushed for unredacted versions of messages, arguing that it is the task of the Commission of Inquiry to decide what information is relevant to its inquiry into the government’s Covid policies.
The Cabinet Office, analysts said, is wary of setting a precedent and is concerned that the disclosure of face-to-face exchanges could embarrass senior officials, including Mr Sunak. More than 100,000 WhatsApp messages from a former health minister, Matt Hancock, were leaked to the Daily Telegraph in February, offering an unflattering glimpse into how senior officials spoke about the pandemic.
In a text exchange, Mr Hancock mocked “Eat Out to Help Out”, a program designed to lure people back to restaurants, which was sponsored by Mr Sunak. He called it “eating out to help spread the virus.”
In another, the government’s top official, Simon Case, warned Mr Johnson was a “nationally distrusted” figure who should not announce new social distancing rules during a bleak phase of the 2020 pandemic.
“In a way, this is our first WhatsApp study,” said Jill Rutter, a former civil servant who is now a senior research fellow at the UK in a Changing Europe think tank in London. “One of the problems is that officials on WhatsApp do things very casually. They mix the personal with policy and politics.”
On Wednesday night, Mr Johnson said he had submitted a wealth of text messages and other materials to the Cabinet Office, and challenged officials to hand it over to the inquiry in unredacted form.
That further complicates the dilemma for the government, as officials had previously said they would no longer have access to the material. It puts Mr Sunak in an awkward position as the government could face a legal challenge if it refuses to comply, which seems likely.
Mr. Johnson has had a cold relationship with Mr. Sunak since last July, when Mr. Sunak’s resignation as chancellor paved the way for Mr. Johnson’s demise.
The former prime minister expressed anger last week when the Cabinet Office referred new allegations to police that Mr Johnson had broken lockdown rules by inviting friends to his country retreat, Checkers.
“No one has very high hopes for Boris Johnson,” Ms Rutter said, “but Rishi Sunak may be concerned about what might be revealed.”
As the investigation may not be completed until 2027, the prime minister need not fear that the information will come out until after the next election, which he must call no later than January 2025. But he won’t have that luxury with the economy, which casts a long shadow over the future of his Conservative Party.
Mr. Sunak, a former Goldman Sachs investment banker, managed to calm the markets after replacing Ms. Truss and reversing her policies. Its budget-busting tax cuts were seen as so reckless that financial analysts called the increased UK bond yields an “idiot risk premium.”
“Unlike the crazy risk premium, which was driven by the institutions crashing and generally appearing incompetent, this is very different,” said Jonathan Portes, an economics professor at King’s College London. “This is quite clearly due to the recent inflation numbers.”
Where some analysts say Mr Sunak made a mistake was in setting a hard target for reducing inflation, especially as the Bank of England, not the government, has the resources to do so. What once seemed like an easy win now looks touch-and-go.
“The market thinks the UK has a persistent inflation problem compared to other advanced economies,” said Professor Portes.