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Downing St ‘Vote Leave gang’ edge towards own exit in No 10 revamp

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Boris Johnson’s decision to break the stranglehold of pro-Brexit campaigners on Downing Street is set to trigger a new year exodus of advisers, including his most senior aide Dominic Cummings, according to senior officials.

The prime minister’s refusal at a tense one-to-one meeting to make Vote Leave veteran Lee Cain his chief of staff was seen by Tory MPs as a watershed moment. Mr Cain announced his resignation shortly afterwards.

Mr Cummings and other Vote Leave officials are now discussing leaving Number 10, possibly once Britain finally breaks its formal ties with the EU at the end of the Brexit transition period on January 1.

Asked whether the “gang” was breaking up, one adviser said: “It very much feels that way. There are a lot of very unhappy people. It’s a big mess.” Asked if Mr Cummings would leave too, a friend said: “I think so.”

Many Tory MPs hope they are right but one former cabinet minister said it may be too early to write off Mr Cummings: “We have won a battle but not the war.”

Mr Johnson was furious on Wednesday when Mr Cummings and other advisers — including Brexit expert Oliver “Sonic” Lewis — threatened to walk out in sympathy with Mr Cain while Brexit trade talks were continuing.

For the moment they are staying, but the split now seems inevitable; Vote Leave officials say it is a question of timing. Mr Cummings’ attempt to insert his ally Mr Cain as chief of staff was a final desperate bid to keep “control” of the prime minister and the people allowed to see him.

On the up

Carrie symonds

Boris Johnson’s 32-year-old fiancée and mother of his son Wilfred knows her way around Westminster and the Conservative party. She previously served as the party’s director of communications and advised several cabinet ministers. Now as an environmental campaigner, she is credited with pushing climate change to the top of Mr Johnson’s agenda and improving his image. While her counsel is offered behind the closed door of the Number 10 residence, her view that Lee Cain was unsuitable to be chief of staff proved decisive in his resignation.

allegra stratton

Until this week, Allegra Stratton was best known as a political journalist for The Guardian, BBC and ITV News. The 39-year-old switched to politics earlier this year to provide communications advice for chancellor Rishi Sunak and is credited with helping develop his polished image. Married to James Forsyth, political editor of the Spectator, she was Mr Johnson’s pick to lead the new televised Downing Street press briefings starting next year. But her appointment led to repeated clashes with the outgoing director of communications over who had the prime minister’s ear.

The pugilistic Vote Leave team, Mr Johnson’s praetorian guard and support mechanism in Downing Street, can now see their power slipping away.

Allegra Stratton, a former television journalist and adviser to chancellor Rishi Sunak, is being brought in as Mr Johnson’s new spokeswoman and from January will preside over “White House-style” daily televised briefings. She has told friends she wants to foster a less confrontational style and will answer directly to Mr Johnson.

Meanwhile Mr Cummings feared the new chief of staff role was a direct threat to his own power, hence his attempt to install his friend Mr Cain in the job. But Tory MPs, tired of the dysfunctional Number 10 operation, told party whips that Mr Johnson had to break the knot with the Vote Leave team.

There was also a wave of protests from senior women in the party — including Mr Johnson’s fiancée Carrie Symonds — who resent the “macho” atmosphere in Number 10. “Carrie and Allegra got one over the boys’ club,” said one senior Tory MP.

Mr Johnson has now twice overruled Mr Cummings on big personnel issues: the appointment of Ms Stratton and his refusal to make Mr Cain chief of staff. “Boris has now gone against the Dom crew twice, the trust is all gone,” said one government insider.

One official close to the Number 10 power struggle said Mr Johnson was right to make a stand: “This is about decency in public, the standards and conduct the electorate expect of us. It’s about who runs Number 10.”

The question of who now takes the chief of staff role is crucial, with Mr Cummings expected to quit unless the candidate meets his approval. “Many of the screw-ups are not comms, they’re the policies too. Both have to be fixed to get this government on a better footing,” said one well-placed adviser.

Heading down

lee cain

From the Vote Leave campaign, to the Foreign Office, to Downing Street, Lee Cain has been at the prime minister’s right-hand side as his longest serving and most loyal aide dealing with the media. The 39-year-old former tabloid journalist helped guide Mr Johnson to the premiership, yet his communications operation in Downing Street has been widely criticised by ministers and MPs during the coronavirus pandemic. The arrival of Allegra Stratton suggested his days might be numbered and his failed bid to become the Number 10 chief of staff ended his close relationship with the prime minister. His exit is more than personal, it marks a decisive moment for Mr Johnson’s government.

dominic cummings

The prime minister’s chief adviser Dominic Cummings has been unchallenged since he entered Number 10 in the summer of 2019 — even in the face of huge public outcry over his trip to the north-east of England that broke the government’s lockdown rules. The 48-year-old ardent Brexiter was head of strategy for the Vote Leave campaign in 2016 and has worked on and off as a special adviser in Westminster. Married to Mary Wakefield, a journalist at The Spectator, his time out of government was devoted to dense blog posts and hefty physics tomes. He has increasingly clashed with Mr Johnson over his combative attitude to governing. With the abrupt departure of his protégé Lee Cain, there is a growing view that his days in Downing Street are also numbered.

One expectation among Whitehall mandarins is that Mr Cummings may leave Number 10 to become the first head of his pet project: a new high-risk, high-reward scientific research body based on the Darpa agency in the US.

There are various theories as to whom Mr Johnson might turn to for a new chief of staff. The most obvious option would be for him to look to those associated with Lynton Crosby, the Australian strategist who ran Mr Johnson’s two successful London mayoral campaigns.

David Canzini, a longtime party operative who works for Sir Lynton’s consultancy and has helped numerous Tory MPs win marginal seats, has been linked with the chief of staff role by several senior Tories, including Charles Walker, vice-chair of the Conservative backbench 1922 committee.

Another group mooted to fill the vacuum are the Cameroons: advisers who worked with the former prime minister David Cameron, who has remained in contact with Mr Johnson.

Ed Llewellyn, who was Mr Cameron’s chief of staff, an Eton contemporary of Mr Johnson’s and now the UK’s ambassador to France, has been suggested by some, although it is not clear whether he would relish a return to the grind of running Number 10.

“Ed supplied all of Boris’s staff for [London] City Hall. It was a mess when he won in 2008,” one senior Tory said. One potential candidate approached by the FT said: “Nobody in their right mind would take that job if Dom [Mr Cummings] was still there.”

William Hague, former foreign secretary, told the FT Global Boardroom online conference on Thursday that Mr Johnson should surround himself now with people who were “not afraid to argue and say No”.

Jonathan Powell, Tony Blair’s chief of staff, said: “What is going on in Number 10 would be comic — an episode of Keystone Kops or Laurel and Hardy — if the situation for the country was not so grave.”

Meanwhile David Frost, Britain’s chief EU negotiator and a close friend of Mr Cain, also briefly considered resigning on Wednesday night. Only just before midnight was it confirmed he would be staying.

Lord Frost’s friends said he was “very upset” by Mr Cain’s departure, but insisted that his agonising on Wednesday was unrelated to progress — or lack of it — in the talks on a UK-EU trade deal.

“This definitely wasn’t about whether there would be a deal or no-deal,” said one ally of Lord Frost, who has been leading talks in London with Michel Barnier, his EU counterpart. The peer is also Britain’s national security adviser.

Negotiations are set to shift to Brussels next week and will continue in the intensified and secretive “submarine” format that the two sides agreed upon last month.

Additional reporting by Jim Brunsden in Brussels



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Analysis

Huawei’s fall hits growth of Sony’s chip business

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Growth of Sony Group’s semiconductor business has slowed, reflecting a plunge in shipments of image sensors for smartphones to Huawei Technologies as a result of the US-China trade war.

Although Sony has avoided a fall in the volume of shipments thanks to orders from other Chinese smartphone makers, the recovery of earnings appears likely to be delayed until the fiscal year of April 2022 to March 2023 because of weakened demand for sensors for high-end smartphones.

As Samsung Electronics of South Korea, which is strong in processing sensors for midrange smartphones, catches up, Sony is halfway towards recapturing the smartphone market.

“We cannot achieve an earnings recovery in the year through March 2022,” said Terushi Shimizu, president and CEO of Sony Semiconductor Solutions, at a press briefing on June 3.

This article is from Nikkei Asia, a global publication with a uniquely Asian perspective on politics, the economy, business and international affairs. Our own correspondents and outside commentators from around the world share their views on Asia, while our Asia300 section provides in-depth coverage of 300 of the biggest and fastest-growing listed companies from 11 economies outside Japan.

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For fiscal 2021, the semiconductor arm of Sony Group expects its operating profit to decline for the second consecutive year to ¥140bn ($1.26bn). The projection reflects changes in the smartphone market structure resulting from the trade friction between the US and China.

Huawei had a global market share at the 4 per cent level in terms of shipments in the January-March period, according to US research firm IDC. With the US government banning the export of American technology to Huawei, the Chinese company saw its market share plunge some 14 percentage points from the same quarter of 2020, when it ranked second.

At the expense of Huawei, Samsung, Apple of the US and three Chinese smartphone manufacturers — Xiaomi, Oppo and Vivo — expanded their shares.

Changes in global smartphone market shares

Sony commands half of the global market for image sensors in value. Growing demand for high-definition smartphone cameras, and the trend of using two or more cameras in a smartphone in recent years, have enabled Sony to expand shipments to Apple and Huawei on the back of its advanced technology of producing high-end sensors.

With Huawei losing its momentum, demand for cutting-edge sensors for high-end smartphones has weakened. Sony thus increased shipments to the three Chinese smartphone makers which primarily manufacture middle- and lower-end phones. While sensors for such phones are each priced low, the makers demand improvements in image quality to attract consumers.

Samsung has set an eye towards capitalising on the “new normal” created by the trade friction between the world’s two largest economies, in a bid to recover its lost ground.

Samsung ships nearly 300m smartphones per year, most of which contain image sensors it produces on its own. While having stable demand, the company is strong at producing high pixel sensors used in midrange smartphones and is enjoying growing demand.

In the global image sensor market, Samsung, with a share of 20 per cent, is trailing Sony, with its 50 per cent share. With Samsung boasting microfabricating technology needed for high pixel sensors, Shimizu said, “We are actually falling behind as far as high pixels are concerned.”

But, he added, “we will add new value using technology cultivated in the field of high image quality.”

Terushi Shimizu, president and CEO of Sony Semiconductor Solutions, speaks at a press briefing on June 3 © Masaharu Ban

Samsung has a large number of manufacturing facilities, including those for memory chips and central processing units. Sony will spend ¥700bn on production facilities in its semiconductor business under a three-year plan through fiscal 2023, up 20 per cent from the preceding plan. But if the importance of microfabrication technology increases, Samsung may gain an advantage because of its greater leeway for investment, according to a research company.

Sony is also expected to take time before reducing its reliance on the volatile smartphone market. Although the company positions image sensors for automobiles as a growth market and keeps boosting annual sales by 50 per cent, the business is still small in scale. Collaborating with its “Vision S” prototype electric vehicle project, Sony plans to develop a high-performance sensor capable of detecting objects even in the dark and sell it to American and European automakers.

Sony will also challenge for a new business model. While Sony has engaged in the sale of image sensors, it is attempting to establish a recurring model of collecting fees on a continuous basis. Specifically, it will use a sensor equipped with data-processing functions of artificial intelligence it has developed. Data, therefore, can be processed both in the cloud and in the sensor so that the volume of communication can be reduced.

For example, the sensor can be used in a camera at a cashless payment retailer with no cash register and improve the performance of street monitoring cameras.

Sony’s AI image sensor has found its way into smart monitoring cameras the city of Rome will put into use in June to optimise the operation of buses by sensing congestion at bus stops or emit light to pedestrians walking through a red light.

Image sensors with data-processing functions of artificial intelligence, developed by Sony, are promoting the rise of new core semiconductors for smartphones (Photo courtesy of the company)

The semiconductor business centred on image sensors was positioned as an engine of growth when Sony was rehabilitating itself. In fiscal 2019, it contributed to Sony’s earnings, logging more than ¥1tn in sales and an operating profit ratio of 22 per cent to sales.

Sony Semiconductor has propped up the revival drive despite such difficulties such as damage inflicted on its local plant by a series of earthquakes in Kumamoto Prefecture in 2016.

While striving to address radical changes in the smartphone market, Sony Semiconductor is being tested for whether it can develop new growth sectors such as image sensors for automobiles and AI image sensors.

Cutting-edge semiconductors are also drawing attention from the viewpoint of national security as the government has drafted a policy of courting overseas manufacturers.

The procurement of logic chips has become difficult as even Sony farms out most of production to overseas manufacturers. Asked whether Sony Semiconductor will launch production, including a joint venture project, for stable procurement, Shimizu admitted to the difficulty of producing them on its own in terms of both technology and cost.

“Generally speaking, it is extremely meaningful to receive state support,” Shimizu said, suggesting the need for government financial assistance for production.

A version of this article was first published by Nikkei Asia on June 7, 2021. ©2021 Nikkei Inc. All rights reserved

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Kamala Harris takes heat handling knotty vice-presidential portfolio

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US vice-president Kamala Harris gave a widely panned television interview while visiting Guatemala this week. 

Asked why she hadn’t been to the US-Mexico border, where an influx of migrants is putting a huge strain on local communities, Harris first dismissed the question and said, “We’ve been to the border.” Pressed, she laughed and said: “And I haven’t been to Europe.” 

Her comments drew criticism and underscored the political dangers that the number two official in the White House faces as she juggles a cumbersome, and expanding, policy portfolio.

Harris was in Central America as leader of the Biden administration’s response to the border problem, including the thorny question of how to address migrants fleeing north from the troubled countries of Guatemala, El Salvador and Honduras.

She has also been handed the nearly intractable task of shepherding contentious voting rights and police reform legislation through a sharply divided Congress. She has hit the road to sell President Joe Biden’s sweeping infrastructure plans. In addition, she has also taken an interest in black maternal mortality and other racial equity issues, including tackling vaccine hesitancy among African-Americans. 

Harris’s first foreign trip as vice-president exposed what detractors and allies alike say are her shortcomings as a politician and vulnerabilities should she run again for president. Harris, a former senator from California, abandoned a floundering primary bid for the White House in late 2019. 

Her comments earlier in the week to NBC News sparked outrage, particularly from Republicans who are hammering the administration over migrants. Meanwhile, she took flak from fellow Democrats for urging migrants not to come to the border in the first place. 

Mary Anne Marsh, a Democratic strategist, pointed to the vice-president’s failure to effectively convey her message on the trip.

“If this is your debut as vice-president on the international stage, you want to give your best performance, and she certainly can do better,” Marsh said. 

Harris made history at her January swearing in, becoming the first woman, the first black person and first Asian-American to serve as vice-president. She holds outsized power as the tiebreaking vote in a Senate evenly divided between Democrats and Republicans. But the other duties of a vice-president are less clearly defined. 

People close to the administration say that Harris has proven a deft counsellor to the president and a near constant presence at the White House, attending regular briefings, offering Biden advice and appearing at his side for big speeches. 

Biden himself served as vice-president under President Barack Obama from 2009 to 2017. When he announced Harris as his running mate last summer, he said he hoped that she would provide advice as he did to Obama. 

“When I agreed to serve as President Obama’s running mate . . . he asked me what I wanted most . . . I told him I wanted to be the last person in the room before he made important decisions,” Biden said. 

He added: “That’s what I asked Kamala. I asked Kamala to be the last voice in the room.” 

Harris is hardly the first vice-president with difficult assignments. Most recently, Mike Pence, Donald Trump’s vice-president, headed the White House coronavirus task force. 

“The vice-presidential tasks are such that usually, if you are successful, they become the president’s and the administration’s accomplishments. If you are unsuccessful, they become yours,” said Kenneth Baer, the founder of consultancy Crosscut Strategies. He was a speech writer for vice-president Al Gore in the Clinton administration and Gore’s ill-fated 2000 presidential bid. 

Harris supporters contend that her challenging portfolio only underscores the faith Biden has placed in her.

“Any one of those issues would be a full-time job for most people,” Marsh said.

Many Democrats argue Harris faces undue criticism, from Republicans in particular, given her identity as a woman of colour. But others admit she made missteps in Latin America and say that her refusal to correct course — Harris later had a frosty exchange with a Univision TV anchor about the border crisis — only remind people of her shortcomings as a presidential candidate in 2019.

“What I think you have seen in the past few weeks . . . are some of the issues you saw during the campaign,” Marsh said. “At different points during the campaign, she did not perform particularly well. Other days, she was spectacular.” 

Looming over Harris’s term is the political future of Biden, who is 78. Her allies say that she is focused on supporting the president as he seeks to push through his legislative agenda ahead of the 2022 midterm elections, when control of both chambers of Congress will be up for grabs. Next week, as part of her voting-rights remit, she will meet state legislators from Texas, where Democrats recently blocked a state bill that would have restricted access to the ballot box. 

“There is a sense . . . that she is focused on her future as opposed to the job, and I just don’t think that is true,” said Dylan Loewe, a former speech writer for then-vice-president Biden who also ghostwrote Harris’s memoir. 

“The last thing that she wants for her future presidential campaign, whenever it is, is for the storyline to be that she was focused on the future and not the president, and that she was not the same kind of vice-president to Joe Biden as Joe Biden was to Barack Obama.”

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Big weddings may be allowed despite expected delay to lockdown easing

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Boris Johnson will consider proposals to allow larger weddings to go ahead in England, despite a likely delay to the June 21 easing of England’s lockdown.

Speaking at the G7 summit in Cornwall, the UK prime minister said the government would be cautious in its approach to ending lockdown restrictions, which senior Whitehall officials said would be delayed for four weeks.

“What I can certainly say is we are looking at the data, continuing to do that, but what you can certainly take is . . . the road map was always cautious but irreversible and in order to have an irreversible road map, we’ve got to be cautious,” he told the BBC.

Johnson will meet senior ministers on Sunday to sign off on an expected delay to the easing due to the spread of the Delta variant of Covid-19.

But ministers may still sign off on plans to allow larger weddings to go ahead. Those with knowledge of the proposals say they will mirror those currently in place for funerals. 

Indoor celebrations will be allowed up to each venue’s Covid-secure capacity, which means social distancing and masks would be required. 

Outdoor celebrations would have an overall cap, which could be 100 attendees. One person familiar with the proposals said: “It’s a completely arbitrary number and I have no idea how it would be enforced.”

Chart showing that roughly 15 million adults remain unvaccinated in England, including around two million over-50s

One senior Whitehall official said it was unclear whether the plans would be signed off. “Boris hasn’t decided but he will do it if it won’t harm the Covid situation.”

The delay to the lifting of coronavirus restrictions in England for a month comes after the prime minister’s chief medical adviser pressed him to postpone the move following a surge in Covid-19 cases.

The restrictions were meant to be removed on June 21, but Chris Whitty, England’s chief medical officer, has advised Johnson that a four-week delay to the final stage of the government’s lockdown easing plan was needed, stressing that a shorter delay would be insufficient to control the spread of the virus. Johnson is due to make an announcement on Monday.

The expected delay would come as the NHS races to vaccinate more adults amid a sharp rise in Covid-19 infections and hospitalisations across the UK due to the coronavirus variant named Delta. Almost 15m adults in England remain unvaccinated, including 2m people aged over 50, according to Financial Times analysis.

Nine in every 10 new Covid-19 cases are the Delta variant, according to a Public Health England report released on Friday.

PHE data also indicated Delta, first identified in India, is 64 per cent more transmissible than the previously dominant Alpha variant that originated in Kent.

Chart showing that cases are rising steeply in England, and hospital metrics are now also accelerating upwards. Deaths so far show no sign of a sustained rise

With two doses of a coronavirus vaccine showing good protection against infection from the Delta variant, the government is seeking to get more jabs into arms. Currently, 55.4 per cent of the adult population has had two doses.

Johnson was given data on Thursday that outlined the latest analysis of the Delta variant and its potential impact on the NHS. “It is now critical we double jab everyone as quickly as possible,” said one official.

One Cabinet Office insider said: “A delay [to lifting the final restrictions] is the only sensible course of action. It’s our working assumption. The latest modelling is dire and it would be suicide to go ahead with a full easing.”

The government’s medical advisers have modelled the impact of a four-week delay on vaccination levels, concluding that a smaller postponement would not make much difference.

But they believe four weeks would have a substantial impact by increasing the number of adults fully vaccinated with two doses, as well as giving more younger people at least some level of protection from a single jab.

Chart showing that England’s current surge in cases has a much younger age profile than its second wave last autumn, which should make it less lethal

The UK has recorded the highest weekly rate of Covid-19 cases since early March, with 45,895 new infections reported in the past seven days. This is a rise of 58 per cent on the previous week.

Office for National Statistics data showed the infection rate was highest in the north-west of England and among children of secondary school age.

Covid-19 hospitalisations have risen sharply since the Delta variant became dominant, with 884 beds occupied in England on Friday, up from a low of 730 on May 22. They have increased 9.8 per cent over the past week.

The link between cases, hospitalisations and deaths has not been broken by the vaccines, but data suggest it has weakened significantly.

More than half of the 42 people who have died after being infected with the Delta variant were unvaccinated, according to PHE.

With older people much less likely to be infected now due to vaccination than in the infection wave last autumn, the fatality rate is likely to be 75 per cent lower amid the latest surge in cases, according to FT analysis.



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