Robert Peston

There is no question more important for all of us than whether Boris Johnson, Dominic Cummings and Matt Hancock are right that there is no alternative to letting coronavirus run its course in the UK, and to control the peak of the epidemic so that it falls in summer when the NHS may have the capacity to cope (see my earlier note for more on their policy). This may well be a rational approach, supported by the chief medical officer and chief scientific adviser – Chris Whitty and Patrick Vallance – underpinned by some sophisticated modelling on how viruses spread through populations. But rational is not the same as optimal, workable, practical or sensible.

We are likely to see a significant fiscal and monetary stimulus across the UK, eurozone and US in the coming days — lots more spending (e.g. tomorrow’s UK budget), and probably significant easing by the Bank of England, ECB and Fed (presumably measures to increase the flow of cheap credit to cash-strapped businesses and individuals, rather than pointless discount rate cuts). But all of that could be a temporary markets steroid unless the spread of virus is decelerated. So what really matters are stats on daily increases in infections, and whether what is happening in China and Korea — namely a sharp slowdown in new Covid-19 cases — is artificial suppression or genuine victory. All eyes are therefore on the Italian lockdown and how effective that will be.

Global system breakdown has defined all our lives for 13 years. From the banking system’s boom and bust to the rise of a new anti-globalisation, the populist generation of politician and political leader, to the mounting cost of global warming, to the exponentially charged proliferation of a jumping-the-species virus.  There is definitely no sleep till Brooklyn, or for the wicked. And we have a choice, as people, as nations, as culture. We can try to understand what is happening in a balanced, calm, rational, scientific way and rebuild some sense of control over our destiny. Or we can continue shouting at each other, in social media’s Tower of Babel, and turn Call of Duty4: Modern Warfare into the model of our future.

UK and Scottish government modelling shows that the economic and fiscal costs of a Covid-19 epidemic could be on a par with the costs of the 2008 banking crisis. According to a senior government source: ‘that is what our modelling shows’. If millions were unable to work and significant numbers of businesses unable to trade – as usual during an epidemic – there would be a huge automatic rise in Universal Credit and other welfare payments to those quarantined. Further costs would be incurred from whatever schemes are put in place to shelter otherwise viable businesses from collapse, coupled with any emergency top ups to health and social care spending.

There are a handful of big things to watch out for following Sir Philip Rutnam’s resignation as Home Office Permanent Secretary: Whether in laying out his case for constructive dismissal, evidence emerges that makes it impossible for Priti Patel to remain as home secretary.Whether other permanent secretaries and senior civil servants show solidarity with Rutnam, thus making it harder for Dominic Cummings to reform how they and civil servants support the Government, and harder for him to streamline the centre of government and the Cabinet Office.

There is a recurring and important phrase in the 36-page document published this morning setting out “the UK’s approach to negotiations with the European Union”. It is: “these provisions should not be subject to the Agreement’s dispute resolution mechanism outlined in Chapter 32”. What this represents is an unambiguous and seemingly non-negotiable rejection by Boris Johnson’s Government of a demand from the EU that any free-trade deal with the UK should include what it calls “level playing field” provisions.

As you know, I misspent much of the past 20 years trying to understand and report on the excesses of the City of London that led to the banking crisis and everything that followed. There were two hedge fund managers who made a bundle out of the rise and fall: Chris Hohn and Patrick Degorce. I mention them because the new Chancellor, Rishi Sunak, worked with and for both of them. The reason this matters is that Hohn and Degorce were so focused, relentless and masters of detail that they make Dominic Cummings seem like a soft dilettante. It is little wonder therefore that Sunak is thriving in what feels to me like the hedge-fund culture that has taken hold at the centre of government since Boris Johnson and Cummings took over.

Why has Sajid Javid quit as Chancellor? Because he wanted his political advisers to be his own courtiers and servants, as is the tradition, and not those of Dominic Cummings, the prime minister’s chief aide. To the contrary, Johnson agreed with Cummings that Javid’s current special advisers should be dismissed and replaced with new advisers who would answer and report to Cummings. The PM and Cummings believe the success of the government in these challenging times require Downing Street and the Treasury to act, as far as possible, as one seamless unit. According to one of Johnson’s close colleagues, the current Prime Minister admires how Cameron and Osborne acted as a two-headed single political monster.

The politics of HS2 are difficult for Boris Johnson, especially since so many Tory MPs hate the £100 billion-plus cost, the destruction of ancient pasture and woodland and the perceived harm to their rural constituents. But the bigger political consideration for Boris 'another-blue-brick-in-the-red-wall' Johnson is the perception of whether today's modified version of HS2 is seen as an upgrading or downgrading of the portion north of Birmingham. His colleagues insist the new plan will be central to his promises to transform both the infrastructure and the prospects of the North. They claim what will happen is that HS2 to Manchester and Leeds – what is known as HS2b – will be much more closely integrated into the so-called Northern Powerhouse.

Downing Street briefings that the EU is 'moving the goalposts' for a free trade agreement and is belatedly demanding that the UK should not be compelled to maintain standards on state aid, competition, workers rights and environment seem either flaky or deliberately designed to once again cast Brussels as a duplicitous enemy. If you look at the March 2018 EU Council guidelines (below) for the future relationship between the EU and the UK and the actually-agreed framework for the future relationship agreed in October 2019 (also below), the importance for the EU of maintaining a level playing field between the UK and EU is explicit.

Is Boris Johnson the Blairite who may not speak his name? All the PM's talk of levelling up rather than levelling down? That is pure, plagiarised Blairism. Fixing public services – like chaotic Northern Rail – with a focus on what works, rather than an ideological attachment to private sector or public sector ownership? That would be Blairism mirrored – inverted in the sense that Blair's mission with Labour supporters was to make the case for the private sector, whereas Johnson needs to remove the stigma of public ownership for Tories.

There is a contradiction at the heart of today's government decision to allow UK telecoms companies to purchase kit from China's Huawei for their 5G and full-fibre broadband networks. It is that Huawei has been officially designated as a 'high-risk vendor' – because it is seen by ministers as subject to direction by an anti-democratic Chinese government and its surveillance apparatus. But – despite pressure from President Donald Trump for Huawei to be banned altogether from the UK's digital infrastructure – Boris Johnson and the National Security Council have not chosen to instruct Huawei to pack up their hi-tech kit and flog it in other parts of the globe.

Given that Labour has just faced its worst electoral defeat, arguably since 1935, it always looked odd – and dangerous for the Opposition – that the final run-off might have been between two candidates, Sir Keir Starmer and Rebecca Long-Bailey, whose hands were well and truly in the blood of that disaster, as part of Jeremy Corbyn's shadow cabinet. So the decision of the big GMB union to endorse Lisa Nandy will make for a more interesting contest and a proper choice for Labour members. Nandy's most important claim to be leader is she is the only candidate to have argued as a backbencher that Labour should have worked seriously to agree a Brexit deal with ex-PM Theresa May.