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First Move with Julia Chatterley
Partygate Report Delivered To UK PM Johnson; United Nations Hold Urgent Session On Ukraine; Journey To Beijing Winter Olympics; Joe Rogan Promises More Balance After Spotify Threat; Ruchir Sharma's 10 Market Trends For 2022; UK's "Partygate" Report Details Released. Aired 9-10a ET
Aired January 31, 2022 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:30]
JULIA CHATTERLEY, CNN ANCHOR: Live from New York, I'm Julia Chatterley. This is FIRST MOVE. And here's your need to know.
Partygate proof? The investigation into government gatherings delivered to Downing Street.
Russian risks. The United Nations to discuss the Ukraine threat.
And Rogan's regret. The podcaster apologizes as Spotify updates rules for misleading content.
It's Monday. Let's make a move.
(MUSIC PLAYING)
A warm welcome once again to FIRST MOVE. We're following two major stories this hour.
UK Prime Minister Boris Johnson is in possession of the long-awaited report into alleged COVID lockdown parties held in government offices. The next
question, of course, is when the Partygate report will be released to the public. We await that.
Also, as I've mentioned, the United Nations begin urgent deliberations over Ukraine in the next hour. The Security Council demanding answers over
Russia's ongoing military buildup near the border.
Ukraine crisis just one of the uncertainties of course to impacting investors sentiment leading to some cautious global markets as you can see.
But green arrows for tech. A bit of a bounce after all that pressure for all the recent whips or volatility.
Actually, the Dow and the S&P finished last week with modest gains. Take a look at that. They are pretty good outcome, I think, given all the
challenges and the choppiness faced.
Earning season also progressing well. But while most companies are exceeding expectations, the size of their performance or the outperformance
relative to expectations less robust than we're seeing in previous quarters. Fears I think about economic slowdown growth to even as global
Central Banks begin pulling support.
Bank of America cutting its Q1 U.S. growth outlook from 4 to 1 percent due to Omicron pressures. It believes the U.S. economy could even contract in
the first quarter. Imagine what that means for the Federal Reserve.
And over in China, two official numbers over the weekend show manufacturing activity barely holding in expansion mode. Slow in growth but nothing
slower about the news flow today.
Let's get to the drivers to discuss all of these things.
The lockdown party report delivered. British Prime Minister Boris Johnson has received initial findings of an investigation into a series of parties
at Downing Street during the pandemic.
Salma Abdelaziz is live in London with all the latest for us.
Salma, good morning.
Big question is, what's in the report? And when do we get to see it?
SALMA ABDELAZIZ, CNN REPORTER: Well, right now, the only person who is looking at it is Prime Minister Boris Johnson and his staff. And yes, while
the Sue Gray report was supposed to be an independent inquiry, Gray's bust is Prime Minister Boris Johnson. So, that highly anticipated report, that
report that for weeks now has been looking into allegations of multiple parties just behind me here. Under the prime minister's own roof, it will
be up to the prime minister himself what to do with it.
There's a couple of things to watch out first.
First, the prime minister is going to go to parliament in a couple of hours' time to present his statement, his view on this report. You can be
sure that he's going to try to have a stiff upper lip there.
And the second we need to watch for is, as you said, Julia, what's in this report. Because this, you can believe it. There's a second investigation
into all the partying that's been happening behind me here. That one is led by the police. And the police say they're might potentially have been
criminal offenses committed because COVID rules could have been broken during lockdown.
So, the police have asked the Gray report to minimize any references to the most flagrant potential violations. So possibly the most brazen parts. So,
what that means is we might not get all those toothy details we really want, Julia, but it's going to give us that overview.
That understanding from Gray as to what the drinking culture, the leadership culture was behind me over the course of the pandemic. And it's
going to deal yet another blow certainly regardless of what's in it, regardless of how thin this report is, it will deal another blow to our
prime minister who is just hanging on to his seat. Julia?
CHATTERLEY: Yeah. I mean, the speculation over the weekend that if there is, certain parts of this that are redacted due to the criminal
investigation and the suggestion from the Met Police that they didn't want specifics in this report, or at least point us to what the specific events
were that they are investigating. That the government might be accused of whitewashing or delaying in order to allow Boris more time to sort of focus
of on other things.
[09:05:00]
What's the risk here actually that they get accused of some kind of Whitehall whitewash, as I have seen it talked about over the weekend in the
press?
ABDELAZIZ: Well, Julia, I think before the reports even come out, there's been so much controversy over how much of it is going to be released. The
prime minister has already been accused despite the fact the report isn't even out yet of trying to suppress parts of this report, of not making sure
it's all out in the public.
I hardly think he would get away with it. And there's a couple of reasons for that. It's not just about public pressure anymore here, Julia. It's
about his own Conservative Party. And that's what we saw happen over the course of the last few days. We saw members of his party joining with the
opposition in that course, that voice of calling for the entire report, whatever may be in it, to be released.
So, I highly doubt under all that pressure the prime minister can hold on to it. Yes, there will be a thinner version. Again, because the police have
asked that all those references to the most flagrant potential violations, all those references need to be minimal, need to be removed essentially
from this report.
So yes, a thinner report, but still a report that's going to paint you a picture of essentially, an administration that was partying it up during
lockdown. Julia?
CHATTERLEY: Yeah. And we're expecting Boris to speak, I believe, at 10:30 a.m. Eastern Time today. So, in the next hour, we shall be watching for
that. And of course, to see if we get the release in the meantime.
Salma Abdelaziz, great to have you with us. Thank you for that. We shall see.
OK. And with Beijing's Olympic bubble, the Winter Games now just four days away.
Selena Wang is packed and ready for the experience.
(BEGIN VIDEOTAPE)
SELINA WANG, CNN CORRESPONDENT (voice-over): My team and I are traveling to Beijing for the Winter Olympic Games held under some of the strictest
countermeasures in the world. Our journey starts weeks before.
(on camera): I'm here in Tokyo. It's 14 days before the games but I've already got to download these Olympic health apps, start tracking my health
in here every day, and upload my vaccine certificate.
I'm getting some Deja vu using this app since we had to use a similar one for the Tokyo Games.
(voice-over): But this time, I'm using a burner phone because of cybersecurity concerns in China.
(on camera): For the next two weeks, I'm limiting physical interactions with others as much as possible.
96 hours before departure, here I go in for my first test.
(voice-over): Back home, I upload my information to get this green QR code.
(on camera): Here we go. We're taking off.
Just landed in Beijing. It's totally surreal. I haven't been back here since I moved about a year-and-a-half ago.
First thing I saw walking off the airplane is a sea of hazmat suits. It feels a bit more like going into a medical facility than the Olympic buzz
you'd expect getting off the airplane.
That was extremely painful. I just had a nose and a throat PCR test. I was tearing up a bit.
(voice-over): I clear customs, immigration and get my Olympic badge without seeing a single face.
I'm officially in what organizers are calling the closed loop, multiple bubbles connected by dedicated transport. The goal, to keep Olympic
participants separate from the rest of China.
(on camera): I'm finally on my way to the hotel on this special bus that's just for transporting Olympic participants.
Arrived at the hotel. They've got this giant wall all around the hotel. So, you can't just walk in and out easily.
(voice-over): The local staff here are also part of this bubble. They'll have to quarantine for 21 days before leaving the bubble and returning to
their homes in China. Beijing isn't taking any chances. Entire communities in China have gone into lockdown over even just one COVID case.
(on camera): I've been waiting six hours, just got the call, my results came back negative. I am so relieved but it's not over yet. I will be
tested daily and will be mostly confined in this room and Olympic venues during my entire stay here.
(voice-over): Selina Wang, CNN, Beijing.
(END VIDEOTAPE)
CHATTERLEY: This United Nations, the Kremlin accusing Washington of stoking quote, "hysteria" this morning, while the White House is preparing a list
of oligarchs it will sanction if Russia moves on Ukraine. This comes as the United Nations Security Council meets to discuss the crisis.
Sam Kiley is in Kyiv for us.
Sam, the Russians already calls -- calling this, and I'm quoting them, "farcical theatrics." And, of course, as a permanent member, they have veto
power over anything the majority decides. So, what is the use? What's the benefit of holding this meeting now?
SAM KILEY, CNN SENIOR INTERNATIONAL CORRESPONDENT: I think the principal benefit, Julia, is to keep people talking rather than even if they are
exchanging rhetoric, even abusive rhetoric, it's better than firing weapons at each other.
And at the same time, the Russians are managing to exploit continuing frictions, if not fractures in the western alliance alongside Ukraine.
Ukraine continuing to argue that an attack on this country is not eminent.
[09:10:03]
The United Kingdom, the latest of the Anglo-Saxon nations to say that they believe it was eminent. That it was likely that President Putin would order
some kind of military incursion into this country.
There have also been local reports, Julia, of false flag operations, allegations being made by the Ukrainians. We have got absolutely no
independent support for this idea, but the foreign agents may be trying to ferment political demonstrations here, very elaborate plot allegedly being
unveiled here.
So, all of this is part of the Russian playbook, but also the international playbook in terms of trying to find out where the kind of chinx in the
debating armor might lie, so that they could continue to talk. Because the troop buildups, of course, continue pace.
CHATTERLEY: Yeah. We shall see what outcome of this meeting is.
Sam, great to have you with us. Sam Kiley there from Kyiv.
OK. Let's move on. Spotify superstar, Joe Rogan, is promised to be more balanced in the future after getting into a hot water with two music icons,
and probably more. Joni Mitchell and Neil Young had demanded their music be pulled from the streaming platforms citing misinformation on his podcast.
Here's some of Rogan's statement.
(BEGIN VIDEO CLIP)
JOE ROGAN, HOST, "THE JOE ROGAN EXPERIENCE": I'm going to do my best in the future to balance things out. I'm going to do my best. But my point of
doing this is always just to create interesting conversations and ones that I hope people enjoy.
(END VIDEO CLIP)
CHATTERLEY: Spotify is also changing some of its policies after the spat.
Brian Stelter joins us with the details.
Brian, great to have you with us. There are so many different directions we can take this in, but just for the viewers who may not be aware of what
this is. This is Spotify's most popular podcast in the United States and the UK. So, he's got a big voice and he's got a whopping gained contract
too. What do you make of his response to the criticism and also Spotify's?
BRIAN STELTER, CNN CHIEF MEDIA CORRESPONDENT: Well, certainly, Spotify is doing something that the - the other social networks did two years ago.
Adding content warnings, there were content advisories, adding a hub full of information about COVID-19.
These are steps Facebook and Twitter took in March of 2020 and April of 2020. And now, Spotify is trying to calm things down and appease artists by
adding these features. But this is a very small step by Spotify. They are not wrestling with the reality, Julia, that they are not just a platform,
they are a distributor. Because they pay Joe Rogan $100 million. They are this promoter. They are this distributor.
And so, when there are artists, they're going to think this is enough. It's a very open question. Then maybe some big artists, some more young artists
out there who want a lot more.
CHATTERLEY: Yeah. It's interesting, isn't it? When I first saw this story break, I was thinking to myself, too lucrative to fail with his contract,
with the size of his audience. And wake me up when Taylor Swift gets so upset about what he's saying. But actually, comes back to this question.
One of - are you a distributor? Do you have the right and the need and the requirement to moderate content on your platform? And for Joe Rogan, he's
not a journalist. Does he have to be balanced? It goes back to a lot of the debate that you have on your show. And that we talked about in the media
today. He's an opinion giver. He's not a journalist. Does he have to be more forceful about the content that he provides on his platform? He has
colossal that listen.
STELTER: And I agree with you. He probably is too lucrative to fail. He is a very valuable asset for Spotify. But Daniel Ek, the CEO, (INAUDIBLE)
pressure over the weekend to rush a statement out, to promise to take action, to try to calm down, not just artists who might be offended, but
also subscribers. We don't know how many subscribers Spotify might have lost over the weekend due to this controversy.
Will it fade away a few days? I think it probably will. Will Joe Rogan continue to book guests who promote vaccine disinformation? He probably
will.
His position is, he's just asking questions. And as you said, he's not a journalist. He's much more of an entertainer. The issue with Joe Rogan is
that there are lots and lots and lots of people out there who do not trust the CNN's and they trust the Joe Rogan's instead. And that's a trust
problem that's much bigger than Spotify. And it's not fixable just by putting a label or warning on something.
CHATTERLEY: If he left, would he take his audience with him, Brian? Is that the point?
STELTER: He could. Although we have seen with some examples of de- platforming is that some of these - some of these people kind of fade away when they lose a big platform.
CHATTERLEY: Yeah.
STELTER: So, I think, that's very much debatable. There's not really an example quite like this with the point to.
CHATTERLEY: Yeah. I mean, CNN plus is hiring, aren't they?
STELTER: They are.
CHATTERLEY: Don't ask for that.
(LAUGHTER)
Brian Stelter, thank you for joining us. It's all about the platform. Yes.
OK. Let me bring you up to speed on some of the other stories that making headlines around the world.
North Korea says it fired an intermediate range ballistic missile on Sunday to test the accuracy of its weapons. It marked the seventh launch of the
new year and the most powerful since 2017.
[09:15:05]
The U.S. says it's concerned with the latest round of tests and is calling for talks. The United Arab Emirates says it destroyed a ballistic missile
launch platform in Yemen after intercepting a missile on Monday. Iran- backed Houthi rebels claimed responsibility for the attack. It's the third such incident this month.
Israel's president has been in on the UAE on a historic two-day visit, but officials say he was in no danger.
More FIRST MOVE after the break. Stay with us.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to FIRST MOVE.
It's been a January for the record books on global market. Investors jolted by an inflating fearing Fed. More companies warning of rising costs and
ongoing supply chain woes too. And the year is just getting started.
Ruchir Sharma, the chief global strategist at Morgan Stanley Investment Management is out with his 10 big trends for 2022. He sees China's economic
power peaking. The deflating of what he calls "bubblets" in crypto SPACS. His special purpose acquisition companies and U.S. tech firms that have yet
to turn a profit. Despite virtual reality, mainly, he says the physical world remains more important than the metaverse.
Ruchir Sharma is also the author of "10 Rules of Successful Nations" and he joins us now.
Among the other books, Ruchir Sharma, Happy New Year and great to have you with us. I could keep you talking for the next hour on your top 10 trends
that I have had to narrow down.
RUCHIR SHARMA, CHIEF GLOBAL STRATEGIST, MORGAN STANLEY INVESTMENT MANAGEMENT: Right.
CHATTERLEY: And choose my favorites. And one in particular was greenflation. We talked a lot about inflation, but what about
"Greenflation." This voracious appetite for green technologies without enough consideration of the resources required to provide for them. Take us
through this.
SHARMA: Yeah. Commodities in fact had their best year since 1973 last year. And that's going to get exception to get such a strong bounce in
commodities. And the argument I make is that this was not so much demand based. Yeah. Some of it was demand based, including the new demand coming
for some of these commodities like copper, aluminum, that are used to build out a green infrastructure.
But a lot of this is supply based. That if you look at what's happened on the supply side, industries in the material sector, in the energy sector,
the total cut in new capacity has been as much as 50 percent over the last five or six years. That's a very dramatic cut.
[09:20:02]
And the point I make is that a lot of this has to do with the pressure that many companies are facing now in terms of not investing anymore in these
polluting projects. So, of course - so, that's the contradiction. On one hand, we all want to go to greener environment. And we're all concerned
about climate change.
On the other hand, we need these commodities until now, demand is at least stable if not growing. And yet we're cutting capacity very aggressively for
the first time in the energy sector in many decades. The amount of new capex going in is less than the depreciation rates. So, this is why we're
seeing such a squeeze in prices higher across the commodity sectors and that's why I called this Greenflation.
CHATTERLEY: A dramatic underinvestment in traditional resources like gas and oil that we're still going to need for many years. And yet - yeah,
we've talked about this on the show before. And the guest gets criticism for talking their book. Particularly, if they're representative or in the
oil and gas sector. We share what you're talking about though, is already in a way what we're seeing an energy price, a commodity price crisis, which
is going to be particularly penalizing for importers of both.
SHARMA: Yes. And it's hurting the consumer at the end of the day because it's the consumer that ends up paying these higher prices. So, we need to
find a solution here. We are all in favor of a pretty good consensus built out there, that we need to do with climate change. But we need to find a
solution there that how do we get to point A and point B without hurting the consumer and hurting the global economy because you can't have oil
prices go up at this pace or the price of other materials. It's this commodity inflation hurts more people than it helps.
CHATTERLEY: And so, it involves, very quickly, an acceleration in green energy investment. But also recognizing the cost of that and perhaps
increasing investment in traditional forms of energy too. At least in the short term. We need a game plan for the short to medium term.
SHARMA: Yes. Until we get to this point where the demand begins to naturally tail off or the other --
CHATTERLEY: Right.
SHARMA: -- alternative sources of commodities really increase. So, we need a game plan here. And it is set to build some of the green infrastructure.
We are still going to need copper and aluminum and some others polluting metals for a long time to come. It's essential.
CHATTERLEY: Yeah. It ties to the next conversation point and one of your other 10 pointers, which is the everything bubble, and the rush of
liquidity that's gone into all sorts of assets. And this definite sound of "bubblets" as you call them, and I love that popping whether it's crypto or
clean energy to some degree. The SPACS -- special purpose acquisition vehicles.
My question for you is, when do we go from bear market to crash? Even technical terms and at the point where you're talking a bubble popping to
such an extent that actually it doesn't ever recover. Are we seeing some of that?
SHARMA: Well, I think we're seeing some evidence of that because what I did here, and in fact, I wrote a piece about this last year, was that identify
that what are the areas at the markets that can be called bubble using some of the classic signs of a bubble. And I identified about five "bubblets"
out there. A new term to basically identify pockets in the market rather than the overall market pockets in market, where there are bubble signs.
Too much trading going on. A parabolic increase in prices. Too much retail speculative activity going on.
So, I came up with these "bubblets" even though there are some of these things which have been bullish on for a while like cryptocurrencies. But I
felt that this was a good idea that had gone too far. And the template that I came up with was that after doubling in price at least over a 12-month
time horizon, when these "bubblets" begin to pop, the average price drop tends to be about 70 percent from the peak over a two-year time horizon.
CHATTERLEY: Wow.
SHARMA: So, they are doing an entire round trip. And I suspect that's what many of these "bubblets" are currently underway. Now, these "bubblets" have
already popped by more than 50 percent that most of these "bubblets" that I identified, whether it was these nonprofitable tech stocks, some of the
clean energy stocks, all those are already down 50 percent from their peak. So, we still have some way to go but a 70 percent drop from the peak is
generally the template that bubbles and "bubblets" have fallen to once they begin to pop.
CHATTERLEY: Yeah. And how long does it take to recover if ever?
SHARMA: It takes a long time because it takes about two years. But, yeah, as I said about bubbles and bubbles are often good ideas that have gone too
far. So, some of these are good ideas. I think cryptocurrencies are here to stay. I don't think that they're going to disappear.
[09:25:04]
But the price appreciation, the speculative mania that they saw, a bit like what happened with the Nasdaq, let's say in the year 2000 that you know you
had this incredible bubble in the Nasdaq and it like popped. It took a while for that to recover. But it did come back. The Nasdaq hasn't
disappeared, and it made a new high last year that was more than three times higher than the peak of 2000. So, they could remain for a while. But
at least for a couple of years, these tend to be pretty badly wounded and that's the template I would expect the "bubblets" to follow.
CHATTERLEY: Yeah. And to your point, look at the innovation that was created following that period though as well. So, as you point out, great
opportunities and businesses can be created through this.
Let's talk and have a meta moment. What do we think of the metaverse, Ruchir? Because it feels like everybody is talking about it. Is the
physical world in decline? The physical economy in decline?
SHARMA: Yeah. That's the point I made, that it's not -
CHATTERLEY: Yeah.
SHARMA: That it goes back to our first point about greenflation that, yeah, we all want to talk about metaverse. It's become very cool. It features
increasingly in every company's quarterly earnings call. But the physical world still matters because if you look at the millennials, they still want
a new home. In fact, that demand is only increasing. They still want a new car in many ways. And then you also have places like - and I said that in
terms of commodity is where you have so much underinvestment. And if we look at what's happening to wages.
CHATTERLEY: Ruchir, I'm going to have to cut you off there actually because we've got some breaking news out of the UK that I have to get to. Come back
and talk to us soon please because it is always fascinating to speak to you. Thank you.
Breaking news coming into CNN.
ANNOUNCER: This is CNN breaking news.
CHATTERLEY: Details of the so-called Partygate report have been released. That's the long-awaited investigation into parties held in Downing Street
during lockdown.
Anna Stewart joins us. Anna, what can you tell us?
ANNA STEWART, CNN REPORTER: Well, at last, after nearly two months, we have what is a slimmed down report. We knew we wouldn't get a full report, not
least because the Met Police as of last week is investigating. So key details are missing.
Now, sifting through this report, and I have to say, I'm going to need to do some more really to get you the full answer there. But some of the
highlights so far, a quotation from Sue Gray's report saying, some of the behavior surrounding these gatherings is difficult to justify. And there's
a conclusion that a number of these gatherings should not have been allowed to take place or to develop in the way that they did.
Now, a reminder. This report is not looking at criminal investigations. It's not deciding who may have broken the law. It was determining what the
facts were around the allegations of all of those parties in 2020 and at the beginning of last year in relation to the COVID rules in place at the
time.
What people want to know, of course, is the prime minister culpable. Is he culpable? Was he at any of these events? And unfortunately, there is a part
in the - in this report that says due to the Met Police investigation, Sue Gray says she's extremely limited in what she can say about those events.
It's not possible at precent to provide a meaningful report setting out and analyzing the extents of factual information she has gathered.
And that particularly concerns four of the most sort of colorful parties that were alleged, of course, in those reports. That will be for the Met
Police. And we do not have a timing as to when we will get a report from the Met Police. And when a full publication of Sue Gray's report will be.
We do expect the prime minister though to speak, that's in around an hour in parliament and to address the findings of this report and to set out
what happens next. Of course, there will still be huge pressure, not least from the opposition within parliament for him to resign. But is there
enough of a smoking gun here given it's a limited report. It is a slimmed down version. There may not be. But certainly, there will be pressure on
him. Julia?
CHATTERLEY: Yeah. It's interesting, isn't it? I'm just reading some of the top lines too. And I appreciate you have only just seen it too. So, we're
both sort of sight reading. But some of the quotes in here are quite punchy, I think, and troublesome for Boris Johnson and the government,
quote, "Some of the behaviors surrounding these gatherings is difficult to justify. At least some of the gatherings in question represent a serious
failure to observe not just the high standards expected of those working at the heart of government but also of the standards expected at the entire
British population at the time."
Which Anna, you and I have discussed the challenges not just what some of these MPs' think and the criticisms of the government face, but also what
the public thinks of what happened given the sacrifices they were making at the time. The conclusion a number of these gatherings should not have been
allowed to take place or to develop in the way that they did.
The question and you have already raised it when Boris Johnson appears, in what, around an hour's time is, is sorry going to be enough. Saying sorry
once again and perhaps it shouldn't have happened is that going to be enough. Because it's going to come down to questions as well of who went to
what? And who was doing what? Particular lights of some of the -- I'll call it excuses. That the prime minister has given already. Tough.
[09:30:00]
STEWART: The excuses, the half apologies have certainly hasn't been enough at this stage to quell serious public anger. We have had a number of polls
out over the last couple of months looking at support for Boris Johnson. They have consistently shown that the majority of the British public that
have been polled would like to see him resign. They don't feel he's showing himself as having the traits needed to be a good leader here.
The opposition party - the Labour Party, of course, would like him to resign. But ultimately, it will come down to what his own party think. That
is how these leadership contests if it were to come to that, would happen. And currently, we don't believe there are nearly enough MPs within his
party ready to ask for a vote of confidence. So, but that could change - that will change depending on what the full impact of this report is. And I
think critically, what the prime minister says, how does he react now and is it enough to quell that public anger.
CHATTERLEY: Yeah. You raise some great points. I'm just looking at some of the other quotes in this.
"The excessive consumption of alcohol is not appropriate in a professional workplace at any time. Steps must be taken to ensure that every government
department has a clear and robust policy in place covering the consumption of alcohol in the workplace."
Another one. "There were failures of leadership and judgment by different parts of No. 10 and the Cabinet Office at different times." And as I've
mentioned already, "Some of the events should not have been allowed to take place. Other events should not have been allowed to develop as they did."
Questions about alcohol, consumption, I'm just - I'm mapping what we're reading here. And to your point, this is a redacted version of actually
what happened. We can't be so specific. But even just from these quotes, if I map that to what the British people were doing at the time, it's tough
reading.
STEWART: It's tough reading. And this is the slimmed down version, Julia. So just looking at some of those quotes and how punchy they are, you wonder
what would be actually in the full report. Particularly if we were looking at who was involved in which parties, when and how much rule breaking was
done.
But just the ultimate -- you and I talked about governance a lot, don't we? And if you look at No. 10 Downing Street, here they are showing, that there
seems to be a culture. Quite a sign from the prime minister but a culture of drinking, a culture that needs to change. And that's something we have
heard a lot about over the last few weeks. That there was a culture of drinking in the workplace. And during a time of a pandemic when people made
huge sacrifices, huge not being able to see their loved ones, and hospital as they died, not being able to get married, being on their own, having to
make sacrifices that clearly No. 10 didn't. They made the rules, but they broke them.
CHATTERLEY: Yeah. Another quote from this. "Some of the behavior surrounding these gatherings is difficult to justify."
And that's the job now of Prime Minister Boris Johnson. And we've discussed, he's got to come out and justify what happened here. Perhaps say
it won't happen again. Tough.
Salma, I think you're with us now. Salma, your - your views because you have been reading through and scouring this report too.
SALMA ABDELAZIZ, CNN REPORTER: Julia, I hate to reference it this way, but it almost sounds like a child being scolded. I can't remember who needs to
be told that the excessive consumption of alcohol is not appropriate in the workplace. That's how this report reads.
A serious failure of leadership, actions that are difficult to justify, a culture that this needs to be addressed immediately. I mean, this is really
damning, Julia. This shows that this grave report, at least the conclusion she's drawing in what is again, a slimmed down version, is that the culture
behind me here is one that disrespected the highest office in the land. It's ones that turned its back on the sacrifices that the British public
made. It's one that simply does not hold to the high standards that you expect of government, particularly during a pandemic.
I mean, even little bits of this report where they are describing the use of the prime minister's own office in garden as a place where people
gathered without justification, gathered excessively. Excessive alcohol consumption. Again, assume, you just wonder how seriously leadership was
being taken during the course of the last two years when, again, over this 20-month period that's outlined in this report.
Multiple parties taking place. We are talking garden parties and Christmas parties, and all sorts of parties where plenty of alcohol was being drunk
at a time when everybody else was lockdown. When serious decisions needed to be made, Julia.
Now, the prime minister is going to be in parliament in just a short time to give his statement, to give his take. And I am really curious as to how
he can justify what is quite literally unjustifiable according to this report, Julia.
CHATTERLEY: Yes. Some of it at the very least. And obviously, a lot of this is missing due to the Metropolitan Police report.
Anna, and as you I have discussed, and I'm looking through the quote on what was said about this. Unfortunately, this necessarily means that I'm
extremely limited in what I can say about those events and it's not possible at present to provide a meaningful report setting out and
analyzing the extensive factual information I have been able to gather. Is that in some way helpful, do we think, to the prime minister at this
moment? Though there is a lack of detail over who was at what, where, how and consuming what.
[09:35:00]
STEWART: Well, you wonder that given that sort of tease is ahead to more bombshells. It probably doesn't really help the prime minister at all. It
will be interesting to see whether or not he says what is he says a lot which is that we have to wait for the full report. We have to wait for the
Met Police, whether he just tries to keep this kind on the road.
I don't think that will necessarily work. I have been reading through a bit more. It's interesting what Sue Gray's report says about Downing Street and
the way that it is run. She talks about how it has sort of increased and expanded in recent years.
She says, "The leadership structures are fragmented and complicated and this has sometimes led to the blurring of lines of accountability." Which I
think is very interesting. And it's all about accountability. And that's what people want to see.
Yes, we don't have all the details at this stage, but we certainly want to see what the prime minister does. Does he apologize? Does he take on the
responsibility for how his government and his No. 10 Downing Street has been run.
CHATTERLEY: Yeah. Against the backdrop of the pandemic when the government was asking citizens to accept far-reaching restrictions on their lives.
Some of the behavior surrounding these gatherings is difficult to justify.
Salma, you get the last word. Because I think you perhaps most of all have been testing British public opinion over what happened here. What do you
think when they see the details of this report in full-on and had time to read it, they will conclude?
ABDELAZIZ: Julia, I think that most of the British public is in no doubt as to what happened here. because it is no longer as to whether or not the
prime minister and his government violated COVID rules. I think most people, if you stop them on the street, believe that that is exactly what
happened.
But it's the details about the type of government that is running this country. Again, one that is being accused of not holding high standards, of
not respecting the British public, of excessively consuming alcohol under the prime minister's roof. It is going to be very difficult for this
country to look at that observation of this government, those adjectives in descriptions of their leadership, of the people who were setting the rules,
of a time of pandemic when again you have to remember the UK had one of the worst mortality rates in the world.
And people and families might start to question whether or not their loved ones' lives could have been saved. Whether this last period could have been
easier. Whether there could have been less sacrifices made, less loss for families across this country. And that is going to be an extremely
difficult pill to swallow.
And how will the British public react? They are going to react by putting pressure on their MPs. They are going to react by ringing up their
lawmakers, sending in letters, pushing and doing what they can to get this prime minister out of office. The latest polling shows two-thirds of the
adults in this country do not want Prime Minister Boris Johnson to continue his premiership. And that's what you're going to see happen. You're going
to see the public push their MPs, push for that to take place. Julia?
CHATTERLEY: Yeah. You raised a fascinating point. Because this was a bunch of people also under a great deal of pressure. And also struggling, have
their own personal lives and their own personal issues. But I think the point you raised there, and you do it incredibly eloquently is perhaps had
there been a little bit more focus, there may have been a little less loss. And that's the challenge here.
Salma Abdelaziz, Anna Stewart, ladies, thank you. We're back after this.
(COMMERCIAL BREAK)
[09:40:50]
CHATTERLEY: Welcome back to FIRST MOVE where the report into the goings throughout the COVID pandemic period at No. 10 Downing Street is out. I'll
read you one of the quotes to begin.
"There were failures of leadership and judgment by different parts of No. 10 and the Cabinet Office at different times. Some of the events should not
have been allowed to take place. Other events should not have been allowed to develop as they did."
Just one of the quotes from this report. Redacted but still enough, I think.
Quentin Peel is associate fellow at Europe Programme at Chatham House and a "Financial Times" commentator.
Qeuntin, we don't have all the report. We just have pieces of it. But there are some pretty punchy lines in this that are going to spell trouble, I
think, for Boris Johnson. Your view?
QUENTIN PEEL, ASSOCIATE FELLOW, EUROPE PROGRAMME, CHATHAM HOUSE: Yes. I think it looks thoroughly uncomfortable. It's certainly not the whole
works. It doesn't pin anything down and it's not going to specifically say he lied to parliament or he broke are the law. But these criticisms of the
failure of leadership and the culture, the chaotic culture of leadership in Downing Street, even if in this very brief version, they are very clear.
CHATTERLEY: I mean, one of the quotes I have pulled out, and I was talking on the show earlier.
"The excessive consumption of alcohol is not appropriate in a professional workplace at any time."
I made the comment that perhaps a little more focus in the public's eye may mean a little less loss. And it's a tough conclusion to make, but it won't
stop the British public looking at some of these quotes from this report and wondering, I think.
PEEL: Yes. I think the absolutely key meeting today is not when Johnson stands up in parliament to apologize again on whatever he's going to do.
It's going to be the meeting with his Conservative backbenchers, because they are really worried that he's now going to be a bust in flush. That
he's not going to be the election winner, they thought they voted into office.
CHATTERLEY: Failures of leadership. They will also - the Conservatives -- be pouring over the latest polls. And they are eyewatering I think for
Boris Johnson. And confidence of the British public feel in this leader now. What do you think they say to him?
PEEL: Well, I think they say either you change your style, or we're going to have to change your job. And he is not the sort of person who is willing
to change his style. Now, I have no doubt that he's going to try and bluster this out. But the situation, the waters have been so muddied about
what are we going to hear now, what are the police going to do, and what action is going to be taken that he will try and bluster this out. But
having said that, I think he's still in a very difficult position.
CHATTERLEY: What does bluster it out mean in practice, Quentin? He's going to come out today and say, I'm sorry, once again. Because to your first
point, and it's a very valid one. There's no smoking gun in this. There's no he said/she said. This is precisely what happened. It's just a, hey, you
acted inappropriately in a very difficult situation.
PEEL: Yes, but that is why the key is whether he's lost the trust and confidence of his own party.
CHATTERLEY: Right.
PEEL: And that I think, I mean, at the end of the day, the opposition will carry on demanding that he resigns. In a curious way, that may reenforce
the desire of the Conservatives to hang on to him. But that's a very difficult position if he is damaged goods. If they now do very badly in the
local elections in May, that really will be the writing on the wall, I think.
CHATTERLEY: More important than the Met Police report that comes out?
PEEL: Yes. I think so in a curious way the Met Police report. I mean, this is a sort of slapping people on the wrist. It's like issuing parking
cointerventions. But I think the key question at the heart of all this is do we trust the prime minister. And he's done an awful lot really to break
that trust.
CHATTERLEY: You know, when the going gets tough, what do you do? You get a flight to Ukraine or to a hot spot in the world, which is what the prime
minister is apparently going to do tomorrow, I believe. There's a lot going on in the world where leadership is required.
[09:45:05]
PEEL: Absolutely. I don't think that anybody in Ukraine or in Moscow is particularly going to be listening to Boris Johnson. That's part of his
problem.
He really has damaged his reputation not just in Britain, but outside Britain as well. Yes, there are critical things to be tackled, but he no
longer looks like the man to tackle them.
CHATTERLEY: You know, it's interesting. You need 15 percent, and you can educate me more on this of members to say look, we want a confidence vote.
But at that point, then you need a majority. And there's a huge difference between a 15 percent of the party saying, look, we want to hold a
confidence vote on this and 51 percent saying, OK, it's time to remove him.
What does it take to get to that point for a collective decision to actually whether it's on the international stage or domestically that
trust, as you've pointed out, that crucial trust is gone?
PEEL: It requires two things, I think. One, the public reaction both to the report and to Johnson's response to it. And if there is a really another
lurch in the polls or something they are going to worry very much.
And I think that at the heart of it, it's therefore, not the smoking gun that is really going to pin this down. It's the mood of the country and the
party. And if he can say, I hear what you say to Sue Gray to this report, and I will change. But if he tries to just blame other people and sack a
few senior civil servants, I don't think that's going to revive his reputation.
CHATTERLEY: I thought if anyone can survive this though, Boris Johnson can. And it goes back again to your first point about a change in style. How
might he evolve even temporarily as a result of this?
PEEL: It's very difficult to say. Because this is a man who has survived for years on being sort of funny and persuasive and, oh come on, joshing
people along and saying I can get away with it. That is not the change of style that's needed.
One of his fundamental problems, I think, is he has actually had very poor personnel choices. Right from the moment that he appointed Dominic Cummings
as his chief of staff, the man who now is hell bent on destroying him. So, he has got a very bad reputation for the people he has chosen. And he
doesn't do his homework, and he doesn't really sound serious in a very serious situation. He still seems to laugh. And you watch his eyes as he
responds to questions and they are darting around and trying not to look in the camera.
CHATTERLEY: Yeah. And this is just too serious to use a charm offensive to try to get out of. To your point, I think, the justification this Sue Gray
report, difficult to justify. Some of this behavior is difficult to justify. The prime minister is going to try and do it in 43 minutes, I
believe.
Quentin, we will both be watching. Quentin Peel, associate fellow at Chatham House. Sir, thank you so much for your time.
PEEL: Thank you.
CHATTERLEY: You're watching FIRST MOVE. More to come.
(COMMERCIAL BREAK)
[09:50:30]
CHATTERLEY: Welcome back to FIRST MOVE where we continue to follow the latest on this Sue Gray report. The independent report into activities,
events at No. 10 Downing Street and beyond during the COVID lockdowns. Have another quote for you here.
"At times it seems there was too little thought given to what was happening across the country."
"There were failures of leadership and judgment by different parts of No. 10 and the Cabinet Office at different times."
Anna Stewart is in London for us on this. Anna, and I know you have been reading more of this report since we last spoke to you, but that quote like
others, tough reading for Boris Johnson and his government. The question is how tough?
STEWART: Yeah. I finally got through the full report.
CHATTERLEY: Good work.
STEWART: And I can tell you, it's actually way more critical than any of us possibly thought it would be. Even though it is a slimmed down report, even
though it lacks the detail that many would have hoped, not least because Met Police are investigating at the same time.
But the ultimate conclusion here is that there are issues at No. 10. There are issues with the leadership that some of these events should never have
happened.
And actually, I think one of the key quotes in all of this was, "There were failures of leadership and judgment by different parts of No. 10 and the
Cabinet Office at different times. Some of the events should not have been allowed to take place. Other events should not have been allowed to develop
as they did."
And it concludes by saying that while of course Met Police report is ongoing, the time to make changes is now. So, you know No. 10 Downing
Street must act on this report.
And of course, there will be more detail when the full report is published. Hopefully, of course, we will get to see that as well. Julia?
CHATTERLEY: Yes. It's interesting, isn't it? I'm just looking at further details again.
Sue Gray revealing that only 4 of the 16 gatherings initially referred for investigation is not reaching the threshold for investigation by London's
Met Police, which is severely limited her in what she can say surrounding those events.
So, just to get more sense here of quite how much has been redacted in this report, which is also quite critical for what details we get in future and
what we hear from the Met. But in the interim, Anna, we are going to hear from Boris Johnson in around, what, 38 minutes and counting. And then he's
going to be up in front of his Conservative Party members later, who I'm sure are going to have some choice words for him too. How does he survive
this?
STEWART: I'm sure they are going to have some choice words for him. But hey, we've been here before. This report has been nearly two months in the
works. Boris Johnson has been asked about all these allegations multiple times. There have been some, I'd say, half apologies for some of the
allegations. There had been many, many denials, of course.
And I suspect there's an option here for the prime minister to say he doesn't want to talk much about it given it is not a full report. And there
are some details, as you say, that are missing. And a Met Police investigation is ongoing.
That is not what the public is going to want to hear. Not at least given all the latest polls we have had. They have been fairly consistent with
around two-thirds of people polls saying that Boris Johnson should resign.
A new one by Ipsos MORI out today saying two-thirds of Brits that were polled, don't believe he's got the right traits to be a leader, to be prime
minister.
But ultimately, while there will be that pressure from the public, what really matters at least in the coming days and weeks is what his party
thinks. What to the Conservative MPs think? Because they are the ones that have the power to trigger a leadership vote. And up to this stage, it
hasn't looked like that threshold has been reached. Julia?
CHATTERLEY: Yeah. And there are huge questions in there as well.
Salma, you can come in here because in order to replace a prime minister or tell him that you got no confidence in him, you have to have an
alternative, as someone who can takeover, which is one question. And I think there's also a suggestion perhaps that the media has been quite
hysterical about this and are we really understanding public opinion.
Salma, what can he come out and say to perhaps soothe some of the public's concerns?
ABDELAZIZ: I don't know, Julia. I'm honestly asking myself that question. Because right now, this is a prime minister that has to justify the
unjustifiable. Defend the indefensible, if you will.
Because this is a 12-page report that essentially scolds this government like children. It says that excessive drinking of alcohol at the workplace
is not appropriate. That they don't hold themselves to the high standards that the British public observes. That the behavior of these officials was
not justifiable.
So, you can only imagine that anything the prime minister says within the context of those very stern words might fall on deaf ears. I think his
saving grace here, Julia, is again that this is a slimmed down version. Only a 12-page report. It does not name any specific details, who was
involved, the when, the where, the who of the matter in those details of breaking down each of those events that are outlined in that report, it
doesn't report.
[09:55:05]
And it doesn't incriminate the prime minister directly. Because remember, all of that now is the subject of a police probe. The police have asked
that minimal references be made to those most serious potential flagrant violation. Because those might be criminal offenses, Julia.
So, yes, the prime minister might be able to buy himself another day due to the lack of detail here, but I just don't understand how you justify a
government that behaves this is way, a government that again according to this report, disrespected the sacrifice of the British public, did not take
the office of leadership seriously and did not take the job of running a country during a pandemic seriously. How can the prime minister twist that,
Julia?
CHATTERLEY: We shall see in 30 - no - yes, 34 minutes time. Yeah, tough reading. Tough speaking. I think when we hear from Boris Johnson. The
question is, in a conversation I was just having, do we see a style change and some remorse from this prime minister? We'll see.
Anna Stewart, Salma Abdelaziz, great work guys. Thank you for that.
And that's it for the show. If you've missed any of our interviews today, they will be on my Twitter and Instagram pages. You can search for
@jchatterleycnn.
In the meantime, stay safe. And "CONNECT THE WORLD" with Becky Anderson is up next.
(COMMERCIAL BREAK)
[10:00:00]
END
