GOOD AFTERNOON & welcome to my weekly update no.297
Witnessing the devastating wildfires in LA has been sobering and all our thoughts are with those who have lost loved ones. Keir Starmer and Rachel Reeves have not had the happiest of new years but locally lots has been happening including the early results of my mobile coverage survey.
WHAT’S GOING ON IN WESTMINSTER
BOND BLUES Rachel Reeves is currently learning an important lesson: the bond markets are totally impervious to political spin. Currently borrowing costs have risen to their highest level since the global financial crisis in 2008, partly because they expect interest rates to be higher in the US but partly also because of the budget which ramped up borrowing here by a massive £30 bn a year. When I was doing budgets one of the most important advisers was the Treasury’s Chief Economist, first someone called Claire Lombardelli (now Deputy Governor of the Bank of England) and then Sam Beckett. Both were excellent but had the terrifying job of advising me how markets would be likely to react. I wonder if Rachel Reeves had similar conversations. For the sake of all of us, she needs to come up with a growth strategy that makes sense - and that markets trust.
MUSK VS STARMER Last week we also saw an escalation in the spat between Labour and Elon Musk – this time over the government’s refusal to hold another national inquiry into grooming gangs. Normally there would only be limited interest in the musings of a Californian tech billionaire but this is different: firstly he owns X (formerly Twitter) so in some ways is like a traditional media baron, the Rupert Murdoch of the age if you like. And secondly he has the ear of the man who will be President in a week’s time. Most Brits are unimpressed with what he has said but that doesn’t make it any less of a challenge for the PM, not least given it has dominated his first week back. In case you wanted to remember a time when he was more friendly to the UK government, here is a pic of him meeting a certain former Chancellor.
THIRLWALL INQUIRY Last Thursday I travelled up to Liverpool to present evidence to the Thirlwall Inquiry. I took the opportunity to put on record my apology to the families of Lucy Letby’s victims for any omissions on my watch as health secretary. It was a thoughtful exchange in which I discussed at length how difficult it is for the government and NHS to implement the literally hundreds of recommendations received from public inquiries, Royal Colleges and regulators. I was pretty conscientious about implementing the Francis Inquiry recommendations into Mid Staffs but even some of those took a long time including getting a second medical opinion about every hospital death which I only managed to push through when I was Chancellor.
AI SUPERPOWER Today the prime minister launched his plan to secure the UK’s position as a global leader in AI. They are good recommendations by someone called Matt Clifford who I have a lot of time for. The question is whether they are ever going to get implemented. They could transform public services - if the government is willing to take on the unions. And if we had them before the budget, maybe we would not have needed those damaging tax rises.
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