Speaker 1: Like, what are the WhatsApp like, are there like a
Speaker 1: lot of emojis, that's a lot of yea, the brain explosion,
Speaker 1: brain explosion, how many times are like how many brain
Speaker 1: explosions were there on that WhatsApp? I've had a lot
Speaker 1: of vomits emojis as well. That's that's come up a
Speaker 1: lot of just the idea of whatever person taking over. Yeah,
Speaker 1: I honestly think the problem is twelve years they all
Speaker 1: hate each other. We've got personal reasons to hate each other.
Speaker 1: And when you start of the government in Germany, you
Speaker 1: want to like someone, but you haven't really got lots
Speaker 1: of reasons to hate people specially and these just hate it. Yeah,
Speaker 1: that's such a good point and I thought that was
Speaker 1: really Dave shoul will try this again. I think we
Speaker 1: better so a little over twenty four hours ago we
Speaker 1: sat down and actually taped what we thought it was
Speaker 1: a fantastic episode with Catherin Griffith's brig editor on our
Speaker 1: Finance team and UK Government report Alex Wickham. We picked
Speaker 1: over the potential for liz trust Is future, the outlook
Speaker 1: of our promises to the city. We all placed bets
Speaker 1: on when this trust would resign, should we take bets
Speaker 1: and when she goes, I've already lost. I have a
Speaker 1: bet day. But at day lettuce, Alex, when do you
Speaker 1: think she goes? I think this week before Sunday, before Saturday,
Speaker 1: before Saturday would be my bet. But I think today,
Speaker 1: you think today? One more day? Freaky podcast, hang on
Speaker 1: one more day, so we get this podcast out. Please,
Speaker 1: she's listening. But this Trust did not hang on one
Speaker 1: more day. We couldn't get the episode out because Trust
Speaker 1: delivered her final goodbye. That's right, she beat us to it.
Speaker 1: And although we did all know it was coming at
Speaker 1: some point, you weren't sure how quickly. Because the point
Speaker 1: Alex made yesterday in the conversation, and what is still
Speaker 1: true now is that there is actually no obvious or
Speaker 1: clear successor at this point. So that's it. We're back,
Speaker 1: with even more to unpack, and with the hopes that
Speaker 1: no major bombshells will redraw before this podcast is published. YEA,
Speaker 1: our edited that it get moving, get it out. I'm
Speaker 1: Francing Lack wend London studio, and I'm David Merritt's back
Speaker 1: from Washington. Not quite in the London studio. Yeah, but
Speaker 1: you made it back in time. This is in the
Speaker 1: City Bloomberg's podcast, connecting you to the stories and the
Speaker 1: voices at the heart of the City of London. This week.
Speaker 1: What is going on in Westminster, that's all anyone is
Speaker 1: talking about. And do any of the Tory MPs raising
Speaker 1: their hand to be the next prime minister really excited
Speaker 1: the City of London. So with us again. Katherine Griffith's
Speaker 1: Bloombergy editor on our finance team, and the winner of
Speaker 1: yesterday has been on the timing of Lisztruss's departure. Katherin,
Speaker 1: you probably regret we didn't have a very expensive or
Speaker 1: not so expensive bottle of wine on the spet. I
Speaker 1: definitely regret it. And for Alex Wickham, who's knee deep
Speaker 1: in writing about all of the drama, is another brilliant
Speaker 1: reporter from our government team, Ellen Milligan. We know the
Speaker 1: rules now of how the voting goes. I mean that
Speaker 1: they're trying to be pragmatists instead of you know, the
Speaker 1: big ideology maybe that we've seen the past from the
Speaker 1: Tory Party and they want to get this done fast.
Speaker 1: There were two really key details in the rules that
Speaker 1: were announced. One the candidates have to get at least
Speaker 1: one MPs backing them. That means there's only a maximum
Speaker 1: of three people who can enter the race, and it
Speaker 1: also means that they have got a long way to
Speaker 1: go until Monday TPM when votes closed to garner that support.
Speaker 1: And really that means that the big beast boris Johnson,
Speaker 1: Richie seen a Penny Moore than't who have gone through
Speaker 1: this leadership race again. All three of them have got
Speaker 1: more than a hundred MP votes in previous leadership elections.
Speaker 1: They're probably going to be the most likely ones to
Speaker 1: go through. The Other thing, which is really a usual,
Speaker 1: is that on Monday they're going to do an indicative
Speaker 1: vote where MPs can vote from those three who they
Speaker 1: want to win. Now that isn't binding, but it's indicative
Speaker 1: of what MP's one and I think that is to
Speaker 1: bounce whoever become second, maybe third in that vote into
Speaker 1: dropping out and not letting the race go in any longer,
Speaker 1: not letting it go to the membership, and making sure
Speaker 1: that we have a prime minister on Monday. It's quite
Speaker 1: remarkable as it, because you know, we just we all
Speaker 1: went through this, didn't we all summer weeks and weeks
Speaker 1: and weeks of it being told this is the process
Speaker 1: that we need to identify the right leader, and turns
Speaker 1: out we can just do it in three days. I mean,
Speaker 1: it just doesn't It undermine all of the all of
Speaker 1: the rules that we were told were absolutely necessary. The
Speaker 1: Conservable they just sort of make it up as they
Speaker 1: go along, don't think they do. And I mean it's
Speaker 1: designed like this to kind of give stability to the
Speaker 1: Conservative Party, but also the country is quickly as possible
Speaker 1: not have this long drawn out period. If it doesn't
Speaker 1: go to the membership, only Conservative MPs are going to
Speaker 1: decide who our next prime ministers. I mean, it's happened
Speaker 1: in the Labor Party. You didn't get as well. These
Speaker 1: rules of having the members choose you can sometimes end
Speaker 1: up with somebody doesn't work out right, That's the problem.
Speaker 1: It depends who you ask. I mean the membership. If
Speaker 1: you look at those three, I mentioned Penny more than
Speaker 1: Boris Johnson. RICHI soon act the membership still love Boris Johnson.
Speaker 1: I think the if it does go to membership, the
Speaker 1: indicative vote of the MPs will actually have a different
Speaker 1: result what the membership will. So if I had this
Speaker 1: brilliant conversation with Tory MP Carl McCartney, he's bagging Boris Johnson.
Speaker 1: He's also been on the committee for all but two days,
Speaker 1: so this is what he said about Boris Johnson. Ultimately,
Speaker 1: he's the best electoral asset that Conservative Party has and
Speaker 1: for the past three four months, all I've ever had
Speaker 1: from my constituents in my marginal seat in Lincoln is
Speaker 1: that they want to see Boris back. And that's whether
Speaker 1: they I'm business in this and speak to business people,
Speaker 1: whether that's constituency who I meet shopping in the various
Speaker 1: different supermarkets or even filling up my car, but not
Speaker 1: one person who is going to be and said, we're
Speaker 1: really pleased that you got rid of Boris Johnson. And
Speaker 1: Boris Johnson really he can really be back. You know what,
Speaker 1: last night, I didn't think he could get enough MP
Speaker 1: support to be put on the ballot, but he's now
Speaker 1: garnered just just under the amount of support that Richie
Speaker 1: Soonac has. Ben Wallace has just announced that he's leaning
Speaker 1: towards Boris Johnson, that he's definitely not running. He's quite
Speaker 1: a big force. He's very respected in the party and
Speaker 1: it feels like it could happen. The thing with Boris
Speaker 1: is he is an electoral powerhouse. I mean, he got
Speaker 1: the biggest a TC majority in in a in a
Speaker 1: generation in and he's still people still think he holds
Speaker 1: that magic, even though the polls were declining against him
Speaker 1: when when he was leaving office. But also Liz tra
Speaker 1: us is handling of the economy I think can make
Speaker 1: people look back and think, oh, he did was the
Speaker 1: really party in the pandemic. Sometimes it kind of relatively
Speaker 1: has almost kind of almost made him into this martyr
Speaker 1: figure amongst some people and some Conservatives. But he's I mean,
Speaker 1: I have so many questions, but he's he's toxic. He's
Speaker 1: toxic for the party. He's probably their most divisive option
Speaker 1: to pick in terms of being able to unify the party.
Speaker 1: We've had um MPs saying that they would resign as
Speaker 1: an MP if if he was chosen and cause a
Speaker 1: by election. I mean that those are really strong words.
Speaker 1: And he's got this Privileges Committee into whether he lied
Speaker 1: to Parliament over the party Gate scandal. If he's found
Speaker 1: guilty and if he's suspended for more than ten parliamentary days,
Speaker 1: if there is a vote, and that it could trigger
Speaker 1: a by election for him, I mean it could be chaos,
Speaker 1: a continuation of chaos if he's elected, and there are
Speaker 1: so many people Dave, you know, let's say he's just
Speaker 1: not the antidote to this chaos within parliament, Catherine, how
Speaker 1: would business interpret this? I mean, Boris Johnson becomes Prime
Speaker 1: Minister on Monday, what does the city think. I think
Speaker 1: the city probably thinks, first of all, it's good to
Speaker 1: have a prime minister who is therefore hopefully a while.
Speaker 1: But Boris Johnson is a funny character for the city because,
Speaker 1: on the one hand he has he's been backed by
Speaker 1: some fairly rich city people who hoped he would bring
Speaker 1: about lots of Brexit dividend reforms, but he didn't actually
Speaker 1: do it. And someone made a really interesting point to me.
Speaker 1: When you look back through the many, many thousands of
Speaker 1: words Boris Johnson wrote as a journalist, he hardly ever
Speaker 1: talked about markets or the economy. He's basically not that
Speaker 1: interested in all of that side of things. So I
Speaker 1: think that the city and business more generally would be
Speaker 1: probably more pleased to see, undoubtedly more pleased to see
Speaker 1: Boris Johnson as Prime Minister. The Trust, although there is
Speaker 1: certainly contingent that was was on Lis trust's side and
Speaker 1: was hoping that she would bring about the things they wanted.
Speaker 1: But I think the city will be mainly looking for
Speaker 1: who is the chancellor? Is it Jeremy Hunt or is
Speaker 1: it someone else? Do you think there's a groundswell of
Speaker 1: support for Regie Synacore? But will there be a huge
Speaker 1: amount of relief if finally I mean we've had the
Speaker 1: Liz interlude and the chaos that provoked. But if finally
Speaker 1: they get region akin ten Downing Street or the city
Speaker 1: actually breathe a huge side of relief. I think the
Speaker 1: city will because he has certainly in his own component
Speaker 1: to become the leader. Of course, he he was the
Speaker 1: voice of of caution, wasn't he? And obviously he's now
Speaker 1: kind of garnered by this sense that he was right
Speaker 1: all a long type thing. And I think people who
Speaker 1: have followed his policies quite closely are of the view
Speaker 1: he's quite cautious that yes, sort of counterintuitively really well,
Speaker 1: despite the fact that he's worked for Goldman, Sachs and
Speaker 1: Hedge Funds, that he was very key to balance the
Speaker 1: books and be very very cautious. But there will be
Speaker 1: people out there who think that if he comes back
Speaker 1: he will kind of scupper the more dramatic bold attempts
Speaker 1: to sort of make the UK's rules, you know, properly
Speaker 1: suit the UK. He's come to be seen as a
Speaker 1: sort of stick in the mud to all of those plans.
Speaker 1: He and John Glenn, who used to be the City Minister.
Speaker 1: So there'll be some people out there who are a
Speaker 1: bit worried about that. Ellen, if we oversimplify, is this
Speaker 1: really your choice for the party. On the one hand,
Speaker 1: if they elect Boris Johnson, there is a chance that
Speaker 1: he can win them the next general election two years.
Speaker 1: But on the other hand, if they elect someone else
Speaker 1: but anymore don't Orgi Sunac, then they have almost a
Speaker 1: technocratic government. They could keep the chancellor, and so the
Speaker 1: markets will you don't have a sigh of relief. There's
Speaker 1: two big questions that MP's are asking themselves when they're
Speaker 1: considering who to back one who can win them the
Speaker 1: next action or give them the best chance to considering
Speaker 1: their trailing so disastrously far behind in the polls, and
Speaker 1: to who can unify the party so that the Conservative
Speaker 1: Party isn't completely destroyed from the inside. Boris Johnson, I
Speaker 1: think a lot of people say He's probably the gives
Speaker 1: them the best chance electorally, although there's so many there's
Speaker 1: so many things that Labor can attack him on that
Speaker 1: they that they started to towards the end of his tenure.
Speaker 1: But he's probably the worst in terms of being able
Speaker 1: to unify the party. Rischie Senac trust is backers still
Speaker 1: really don't like Riscie Senac. There was all those blue
Speaker 1: on blue attacks, the nastiness over the summer um that
Speaker 1: still kind of play against him. And then Penny Mordant
Speaker 1: is able to get a lot of support from different
Speaker 1: factions in the party, but a lot of people question
Speaker 1: whether she's had enough experience, whether she's impressed people enough
Speaker 1: when she has been ministerial positions. Um so those are
Speaker 1: the two big questions. In fact, Katherine, it was interesting
Speaker 1: what you were saying about Jeremy Hunt earlier because I
Speaker 1: think he could hold the key to who gets in,
Speaker 1: because I think people want to maybe not the Restaunson
Speaker 1: seeing as they renegates each other for the leadership in
Speaker 1: but I think Penny Morden and Richie Senac will be
Speaker 1: fighting to have a joint ticket with Jeremy Hunt. He's
Speaker 1: managed to calm the market since he's come in um,
Speaker 1: the argument will be we need a degree of stability
Speaker 1: and the treasury um so that the October fiscal statement
Speaker 1: can go ahead. For example, He's done a good job
Speaker 1: so far calming things down, and I think he whoever
Speaker 1: he backs, could hold the key. Yeah. I just think
Speaker 1: there's two questions really are just so important. And on
Speaker 1: the second one, though, I guess my thoughts is, you know,
Speaker 1: with all of them, with all of the backstabbing and
Speaker 1: the in fighting that we've seen, the victual being poured
Speaker 1: around this, this is a party at each other's throat.
Speaker 1: It doesn't feel or like any of those people are
Speaker 1: going to be able to calm down the party enough
Speaker 1: to hold a government together to get to that point.
Speaker 1: To watch the first question, which is whether or not
Speaker 1: they can win an election. Is this kind of a
Speaker 1: party actually in terminal decline at the moment They just
Speaker 1: need to go into opposition. You know. I talked to
Speaker 1: some MPs who say, you know what, we're just going
Speaker 1: to have to accept that this time we might have
Speaker 1: to go with our second or our third choice and
Speaker 1: we just have to grin and Barrett, And then I
Speaker 1: talked to others who say, you know that they might
Speaker 1: resign from the Parliamentary Party if if certain people are
Speaker 1: in gather. We also spoke to Vince Cable and he
Speaker 1: was talking about how Boris Johnson is still a very
Speaker 1: decisive but divisive figure that because of his conduct issues, well,
Speaker 1: I would worry about the consequences. So for several reasons.
Speaker 1: I mean, he's very divisive figure in the country and
Speaker 1: I would imagine with the Tory Planty there are not
Speaker 1: a conservative mass. I think we need to remember there
Speaker 1: only a few months ago a majority of these parliamentary
Speaker 1: colleagues throw them out. Is unsuited to lead the country again.
Speaker 1: When you talk about the city of London, are they
Speaker 1: just fed up with the Tories because they say, look,
Speaker 1: they're putting once again party before country and what does
Speaker 1: that mean for how business friendly they think labor is. Yeah,
Speaker 1: they really are fed up with the Tories. What's been
Speaker 1: quite striking in the last few weeks is when you
Speaker 1: talk to really senior people inside big financial institutions, they
Speaker 1: tend to be quite measured, even if they're speaking off
Speaker 1: the record. They don't really like talking about politics a
Speaker 1: great deal and certainly not about individuals. But there has
Speaker 1: been an absolute fury amongst some of these very senior
Speaker 1: bankers and people in other firms. They think that in
Speaker 1: other walks of life, these people would have had to
Speaker 1: be held accountable, they would have been act much more quickly.
Speaker 1: You know. It's a real, absolute sort of white hot
Speaker 1: fury that you see in their faces, and it's I
Speaker 1: haven't really seen it before in all my years of reporting.
Speaker 1: Talking about the white hot fury of the bankers is remarkable.
Speaker 1: And is there anything that the government can do to
Speaker 1: assuaise that? I mean, one of the main measures that
Speaker 1: the next administration need to put in place to to
Speaker 1: study the ship and reassure the city of London that
Speaker 1: things are going to get better. They absolutely want stability
Speaker 1: and clear plans. They know the economic reality is tough,
Speaker 1: and actually, in some ways I think there are of
Speaker 1: the view that a lot of these difficult things were
Speaker 1: coming down the path anyway, higher interest rates, meaning higher
Speaker 1: mortgage costs for their for customers. But you know, the
Speaker 1: Tory Party, in a sort of act of self sabotage,
Speaker 1: has really sort of owned those problems in a way
Speaker 1: that they might they might not have to have done.
Speaker 1: But in terms of policy they want, they really do
Speaker 1: want stability and physical prudence because they think that that
Speaker 1: might mean that the Bank of England does not in
Speaker 1: fact have to raise rates by quite as much as
Speaker 1: it would otherwise have to do, and that will have
Speaker 1: a really material impact on people who have mortgages, people
Speaker 1: who have loans, and the wider economy. And then I
Speaker 1: think they do want a sort of sensible thought out
Speaker 1: set of ideas for how in fact there can be
Speaker 1: investment in this country. They're obviously extremely keen to to
Speaker 1: be part of that story. They just want to see
Speaker 1: stability so they can get on with it. But again,
Speaker 1: where does the stability come from? So again it's the
Speaker 1: same party, But you saw this trust lasted forty four
Speaker 1: days with radical economic plans. Frankly, so if you're looking
Speaker 1: out the policies and we don't know them because they
Speaker 1: don't have time to campaign between plenty more, don't Boris
Speaker 1: Johnson and Richie Suonac, how different are they? I think
Speaker 1: I think they have a sense of what Richie Sunac
Speaker 1: would be like. They've seen obviously Boris Johnson in action,
Speaker 1: and I think they probably think that can be navigated.
Speaker 1: I think they honestly have no idea what Penny Mordant
Speaker 1: would be like whatsoever. But increasingly when you do speak
Speaker 1: to business and the city, they say they're not really
Speaker 1: bothering with any of the Tories. They are engaging with
Speaker 1: the Labor Party. They are talking to Rachel Reeves. They
Speaker 1: are pretty encouraged by kir Starmer. And something I was
Speaker 1: really struck by. I had a conversation with someone who
Speaker 1: works at a big private equity firm and they made
Speaker 1: exactly this point that they were only engaging with the
Speaker 1: Labor Party at the moment. And I said, well, you know,
Speaker 1: but what if Starmer comes in and they do do
Speaker 1: a wealth tax or they hike up the inheritance sax.
Speaker 1: You know what, actually do you think about that? And
Speaker 1: they said the view inside their firm, which is made
Speaker 1: up of lots of American people, lots of people from
Speaker 1: the continent, was that it's okay as long as it's
Speaker 1: not really egregious, not really sort of outside the norms
Speaker 1: of what they think are acceptable. They would prefer to
Speaker 1: see a labor government that's a pragmatic bunch, aren't they
Speaker 1: really work with what they pragmas budge And you know
Speaker 1: this firm in particular, they're they're holding back on investment
Speaker 1: in the UK until they know what the hell is
Speaker 1: going on, So you know, for for the UK's growth,
Speaker 1: that's absolutely terrible. The really tricky thing that the Tories
Speaker 1: have at the moment is Jeremy Hunt has been able
Speaker 1: to calm markets because he's rowed back on those tax
Speaker 1: cuts which would have required a lot of borrowing, and
Speaker 1: spending cuts are now on the cards and that and
Speaker 1: that calms markets because it means less borrowing, but it's
Speaker 1: politically really tricky for them. So getting that balance right
Speaker 1: between continuing to calm the markets and can't they still
Speaker 1: need to cut They have some way to go to
Speaker 1: really calm them more, but also not politically damaging themselves
Speaker 1: so much that they're making spending cuts to the NHS
Speaker 1: and to police and these things, which, to be honest,
Speaker 1: might be required if they want to fail that whole
Speaker 1: that they really need to And that balance I think
Speaker 1: is going to be really really hard to strike on
Speaker 1: the October th fst if indeed it still happens at
Speaker 1: the end of the month. If it happens, so we've
Speaker 1: had for four days, frankly chaos on the markets. Is
Speaker 1: there a believe Catherine that the I guess extreme right
Speaker 1: extreme left on both parties is now shaken out because
Speaker 1: they do have to to, you know, work in the
Speaker 1: parameter of the markets. Yes, I think that's one sort
Speaker 1: of slight positive perhaps that there's a perception that on
Speaker 1: the left we've gone through a period when the kind
Speaker 1: of corbinate Corbin nights were in the ascendant and that
Speaker 1: absolutely horrified business in the city. But actually also on
Speaker 1: the right, I think there's a lot of sort of
Speaker 1: views in mainstream finance that they thought the voices that
Speaker 1: people like Liz Trust and quasi Quarte and we're listening
Speaker 1: to work extremely unhelpful for the kind of UK's long
Speaker 1: term prospects. That they had sort of fairly niche ideas
Speaker 1: about what they claimed Brexit meant but didn't necessarily actually
Speaker 1: serve the wider interests of the country, to do with
Speaker 1: sort of tax cuts for nondoms and all sorts of
Speaker 1: libertarians small smaller state ideas. So I do think that
Speaker 1: in mainstream finance they think that if those people can
Speaker 1: be cut out as a as a result of all
Speaker 1: of this political chaos, starts a good thing, and then
Speaker 1: you have to indulge me because I know we're all
Speaker 1: obsessed with politics and the economy and markets, but I'm
Speaker 1: also obsessed with WhatsApp groups of the Conservative Party. They
Speaker 1: have emojis. I mean, like, do we know what Alex
Speaker 1: Wicken was telling us yesterday that you know, they would
Speaker 1: kind of send names to each other of who could
Speaker 1: run or who could be chancellor. And there were a
Speaker 1: lot of like exploding brain emojis and a lot of
Speaker 1: vomit emo. I have one unnamed MP pretty much only
Speaker 1: communicates with me by emojis. There's very colorful language as
Speaker 1: well in Conservative Party WhatsApp groups, and there's a lot
Speaker 1: of exploding heads. I had a um an ex minister
Speaker 1: send me an exploding head after she resigned. No one
Speaker 1: saw it coming that quickly, and I just this is
Speaker 1: how we communicate with Dave. But I'm a journalist, so
Speaker 1: he's like, what you can't write in sentences just emos.
Speaker 1: You know those word clouds that polling companies have been doing,
Speaker 1: and they should do that with purely emojis. And see
Speaker 1: one in the middle. Welcome to the future. Thank you
Speaker 1: so much, Thank you, thanks for listening to this week's
Speaker 1: in the City. We'll be back next week. But in
Speaker 1: the meantime, if you like our show, please head on
Speaker 1: over to Apple Podcasts or wherever you listen to podcasts
Speaker 1: and rate, review and subscribe. Also sign up now for
Speaker 1: a newsletter, The read Out with a Legra Stratton on
Speaker 1: Bloomberg dot com Slash Newsletters, or check out the show
Speaker 1: notes for a link. And you know what else you
Speaker 1: should now sign up for our new daily newsletter, Money Distilled,
Speaker 1: where Bloomberg UK's John Steppek explains what market moves mean
Speaker 1: for your money. This episode was hosted by ME Friends
Speaker 1: in Laquax and Me David Merritt. It was produced by
Speaker 1: Summersadi Special thanks to Catherine Griffith's Ellen Milligan and Alex
Speaker 1: Wickham