Let’s get the parties charted: the Partygate report

Hey, Ryan Reynolds here for Mint Mobile. You know one of the perks about.

Having four kids that you know about.

Is actually getting a direct line to.

The big man up north.

And this year he wants you to know the best gift that you can give someone is the gift of Mint Mobile's unlimited wireless for $15 a month. Now, you don't even need to wrap it. Give it a try@mintmobile.com Switch upfront payment of $45 for a three month plan equivalent to $15 per month. Required new customer offer for first three months only. Speed slow after 35 gigabytes. If network's busy, taxes and fees extra. See mintmobile.com hey, Ryan Reynolds here wishing you a very happy half off holiday because right now Mint Mobile is offering you the gift of 50% off unlimited. To be clear, that's half price, not half the service. Mint is still premium unlimited wireless for a great price.

So that means half day.

Yeah.

Give it a try@mintmobile.com Switch upfront payment of $45 for three month plan equivalent to $15 per month. Required new customer offer for first three months only. Speed slow. 135 gigabytes of network busy taxes and fees extra. Cmintmobile.com. Hello and welcome to the Intelligence from the Economist. In London, I'm Jason Palmer.

And in New York, I'm John Fassman. Every weekday we provide a fresh perspective on the events shaping your world.

Maybe you think chocolate, maybe you think snazzy watches, but at the mention of Switzerland, lots of people think of high flying multinationals and finance operations. We ask why such a small country has such a big footprint in the world of business.

And six years ago, Russian troll farms pushed online propaganda in an effort to influence America's elections. Now similar entities are doing similar things on Twitter to influence the world's view of Russia's invasion of Ukraine. And they just might be succeeding.

But first, For months, the British public has been waiting for a report from Sue Gray. She's a career civil servant who's charged with looking into the culture of partying at the heart of government when the country was under strict lockdowns. That Partygate report is now out. It's damning stuff. Once again, Prime Minister Boris Johnson faced pressure to resign yesterday. And Keir Starmer, the leader of the Opposition Labour party, called on Mr. Johnson's fellow conservatives to remove him.

You cannot be a lawmaker and a lawbreaker and it's time to pack his bags. Only then can we restore the dignity of that great office and the democracy.

That it represents at Prime Minister's questions yesterday, Mr. Johnson again appeared contrite.

Prime Minister I'm grateful to Sue Gray for her report today. And I want to begin today by renewing my apology to the House, to the whole country. And I also want to say, Mr. Speaker Babel, that I take full responsibility for everything that took place on my watch.

Yet despite all the lurid detail, the strong words, the leaked photos of the revelry, the weeks and weeks of public outcry, Mr. Johnson doesn't look like he's going anywhere.

This report really is a very interesting mixture of high precision, but also pixelation and blurriness.

Matthew Hullhouse is the Economist's British political correspondent.

It logs in quite excruciating detail how these parties unfolded through the night, night after night, in Downing Street. At the same time, when it comes to the question of who was to blame, who knew what, how much did the Prime Minister know? Where does blame ultimately lie? With most senior individuals, it gets a little bit blurrier.

So at a high level, then, what kinds of details were revealed in this report?

So the report confirms many things that were exposed largely through the dogged work of newspaper journalists. Here it outlines how there was parties, it seemed, week after week in Downing street that came to resemble wild student house parties. So they would begin at 5:30 or 6:30 in the evening and carry on sometimes until 3 or 4am this is in the, you know, the very heart of the British government. They featured pizza and prosecco, karaoke machines, people drinking so much until they vomited, officials getting into fights, people climbing and breaking the Prime Minister's children's play equipment, people being rude to the security staff and the cleaners, people crowding into offices so tightly that they ended up setting off the panic alarm. So the police attended. And remember, this was at the time when Britain was in a really strict lockdown. So this sort of activity was entirely against the law. And people in Britain who, you know, were gathering for, you know, going around to a friend's for a cup of tea or having a house party of their own were being hit with quite stiff fines. So really, the findings throughout this scandal as they've dripped out, really have shocked and appalled many British people.

And we've been talking about this scandal as it has unfolded. And Boris Johnson at each stage has said, well, rules weren't broken or I didn't know. I mean, what's he said this time around?

So you're right, it's not the first time during the saga that he's had to make Difficult admissions in the House of Commons. He's already apologized on camera after the police fined him once for breaking lockdown rules. And he made a statement in his own words, setting out the context for what had happened.

I. Mr. Speaker, I am humbled and I have Learned a lesson, Mr. Speaker.

But it has to be said, this humility and this lesson learning really did have its limits. Mr. Johnson insisted that, you know, while he had been pictured toasting a glass of wine at a colleague's leaving do, he insisted that that was completely appropriate in a work capacity, because it's part of his duty to thank people. He said, that's leadership. That's about boosting morale. That subversion of events which really tallies quite difficultly with many people who couldn't see their friends or even say goodbye to their relatives at funerals. And he continuing to insist that many of the more serious allegations, like the fact that these parties carried on late into the night, he insisted he was completely unaware of.

And I have been as surprised and disappointed as anyone else in this House as the revelations have unfolded. And frankly, Mr. Speaker, I have been appalled by some of the behavior.

Why is he going to the extent of stressing that he knew so little about this? Well, the really crucial next edge of the saga is that he's being investigated by his colleagues in the House of Commons for whether he misled them. Under the ministerial code, it is a convention that anybody who knowingly misleads the House of Parliament, that is, anybody who knowingly lies, has to resign. So he's making an effort to show that whatever misinformation or untruths he delivered to the House of Commons, they weren't intentional. It was simply that he was in the dark about events that were going on under his own roof.

I'm happy to set on the record now that when I said. I came to this House and said in all sincerity that the rules and guidance have been followed at all times, it was what I believed to be true.

That's not a good defence for a Prime Minister, to me, mounting, because he's effectively trying to claim that he was not even aware, let alone what was going across his government, but what was happening inside the building in which he lives.

And when these allegations first started to seep out, there had been a lot of calls, certainly on the part of the opposition, for Mr. Johnson to resign. Now you're even hearing Conservative MPs suggesting he be removed. Do you think this changes the scene? Now you've brought up this notion of resignation. Is there any Chance of it, it's.

Not looking likely at the moment, we know that the Conservative Party is deeply unhappy. Every Conservative MP can see the state of their mailbag, they can see the polls. They know that this is hurting them quite badly. And yet the mechanism for removing a failing Conservative leader is quite simple. You just need 54 letters, that's 15% of the parliamentary Conservative Party, to write a letter of no confidence that triggers a ballot. If half of those balloted say they don't have confidence in the Prime Minister, then he has to go. But that low threshold of 54 letters still hasn't been met repeatedly. Conservative MPs have said throughout this scandal, well, we'll wait for the police to report, we'll wait for Sugre to report. Repeatedly they pass through these hurdles and yet they do nothing. That's partly because some genuinely think he's the best campaigner they've got. Others just are terrified of leadership contests. That really opens up a civil war within the party. Some of them are privately quite thrilled because above all, they want to prevent another lockdown in Britain. And so the public anger at the rule breaking at the top of a government they think basically poisons the well. And no government will ever dare mount a lockdown like this again. So they are quite happy to see a weak and biddable Prime Minister remain in office.

And you mentioned that ministers are receiving lots of mail about this. Voters don't like the look of this at all and haven't from the start. What effect do you think that's going to have when it comes to the next election?

So the upshot party gate is it really has damaged Boris Johnson's personal reputation and by extension the Conservative Party's electability very badly. YouGov think nearly 60% of Britons think he should resign. He is lagging on lots of metrics behind Keir Starmer, the Labour leader, and he's being hit both by lifelong Conservatives voting in southern rock solid Conservative seats, but also it's really hurting him amongst the new voters that he won over in this Grand Coalition of 2019 in former Labour heartlands. And so there are lots of Conservatives who basically think that they have lost the next election because of this affair.

And more broadly, though, what effect do you think all this has had on British politics?

Well, it's no surprise that Sir Keir Starman, the Labour leader, has made a huge amount of this affair. He feels it really underscores his strengths as a former public prosecutor who wants to run on a ticket of restoring trust and integrity to British Politics. That report lays bare the rot that under this Prime Minister has spread in number 10. And it provides definitive proof of how those within the building treated the sacrifices of the British people with utter contempt. The broad lesson, actually, is that it highlights the extent to which the British constitution and British politics hangs together through convention. It relies on Prime Ministers having an understanding of, you know, unwritten rules of British politics and observing them. Now, that's both how do you run your personal office? But also the big rules, such as, you know, should you mislead Parliament, and if you do, should you resign? What it's shown is that as long as you can retain the faith of a majority of your own MPs and they can sustain you in office, then actually many of these rules lose their meaning as long as you can keep that grip on power alone.

Which is to say that this whole business, and perhaps Mr. Johnson's entire premiership has been a debasement of the politics.

I think what is really striking about this report is that it's not that people did anything particularly wicked or scandalous. It's not like illegal arms deals or anything like that. It's rather the remarkable triviality with which they regarded their office. It's almost this sense that they were bored by the job they had to do and that they could think of little else other than organizing the next party. It's really hard to read this report and see the roles of people like Simon Case, the Cabinet secretary, or Martin Reynolds, the Prime Minister's own private secretary, without this sense of decay. There's a powerful declinist vibe in Britain at the moment, this sense that. That everything is sort of going backwards and being run into the sand. And it's very, very hard to read Sugre's report without feeling that.

Thanks very much for joining us, Matthew.

Thank you, Jason.

Business bigwigs, political leaders, global movers and shakers of all types are gathered in the Swiss mountain village of Davos this week. The place has become a byword for the annual jamboree that happens there, at least in non pandemic years, the World Economic Forum. This year, the pandemic and the war in Ukraine are top of the Davos agenda.

This war is really a turning point of history and it will reshape our political and our economic landscape in the coming years.

But why does a meeting of the world's most influential figures happen in Switzerland? Because it's small but mighty.

Although it's a small landlocked country with scant natural resources, Switzerland, like Davos, punches above its weight in Prosperity and influence in business.

Wendelin von Bredo is senior Germany correspondent for the Economist.

Switzerland has just 9 million inhabitants, but it's home to 13 of the top 100 European companies by market capitalization and 12 of the top 500 companies worldwide by that same measure. So relative to Swiss GDP, the country has the highest density of Fortune 500 companies in the world.

So what are some of the big Swiss companies here?

Switzerland has produced renowned companies in banking. This is Credit Suisse, today one of the world's leading banks. Its history of insurance and pharmaceuticals.

We are a global healthcare pioneer, advancing science for humanity.

This is Roche.

You've certainly heard of Nestle, the food company. Then of course watchmaking. You have Richemont, Patek Philippe, Rolex and Swatch more recently. And then actually something I didn't know is that Cesar Ritz, who I thought was French, was actually the youngest of 13 children of a Swiss farmer. So he set up the chain of luxury hotels. And last but certainly not least, there's chocolate. There's Linden Sprungli and Barry Caillbot, the biggest maker of industrial chocolate in the world.

And so how long has this been the case? Have the Swiss been big hitters in business for centuries?

Well actually in the Middle Ages Switzerland was very poor, much poorer than neighbouring Germany. Its soil is mostly non arable, it's infertile and a good chunk of the country is covered in snow most of the year. It started to develop economically in the 19th century when city cantons such as Zurich or Basel began to specialize on high value added industries. Zurich specialized on silk and fine spinning. Basel became the center of pharmaceuticals and chemicals and still is today. Then there's watchmaking and that was mainly located in the Jura, which is that area between Geneva and Basel. And banking and insurance prospered in Geneva for the banks and in Zurich for the insurance companies. But then of course, Switzerland still remains a small market. So very soon, once they became so successful, Swiss companies began to export. So Switzerland by its nature had to be a very open country and has remained so to this day.

So the success that it knows today is connected to that specialization that it did so long ago.

So one central reason for Switzerland's success is its unique political model. It mixes federalism and direct democracy with the famous Swiss plebiscites that happen quite regularly. There was just one on May 15. Central government is weak and there is little and light regulation and then there's inter canton competition in education. Many Swiss universities are first class. Then finally, and I think that's also really a pivotal element of Switzerland's success is its openness to the world. It has always attracted international talent. And you can go back to the 17th century when France's Huguenots fled to Switzerland. And then of course more recently in the 20th century, Germany's Jews who escaped the Nazis and came to Switzerland.

And surely one thing that contributes to business interest in Switzerland is the renowned low tax rates.

Yes. So Switzerland and Swiss cantons have famously low taxes and particularly low corporate taxes. Zug has the lowest corporate tax rate in the country, 11.9%. And only offshore financial centers such as Gans and Qatar have lower tax rates than those levied in these low tax cantons. And just for you to compare, France's corporate tax rate is 26.5%. So basically almost triple of Zug.

And you mentioned that a certain openness to the world is also part of the secret sauce here.

Absolutely. The Swiss have a love hate relationship with foreigners. They want them to prove themselves until they really accept them and love them. But there are lots of them. I think by some measures about a third of the Swiss population is foreign or of foreign origin. And foreigners have been central to Switzerland business success. So for instance, Henri Nestle was from Frankfurt. Anthony Norbert Patek, who was the creator of Patek Philippe, was a Polish cavalry officer. Nicholas Hayek, who was the co founder of Swatch, was of Lebanese descent. And there are many more examples. So today about half of the CEOs of Switzerland's biggest firms are foreign. Severin Schwann of Roche is Austrian. Gary Nagel of Glencore is South African. And Vasan Narasimh of Novartis is Indian American.

But you mentioned some things that are historical, structural about how Switzerland has made it so far in the world of business. Is it well placed into the future as the business world itself changes?

Well, Switzerland has of course had its share of failures. Like most countries, there was the grounding of Switzerland in 2001. It has also failed to produce a tech giant. And it does face big challenges in the future to sustain its prosperity. First of all, they haven't managed to strike a comprehensive treaty with the European Union. And that's a real problem because Switzerland would be much more attractive for foreign multinationals if it were either part of the European Union or had a comprehensive treaty such as Norway or Liechtenstein. Then there are two big Swiss industries that are challenged at the moment. One is the pharmaceutical industry. The cost of innovation has increased so much that it's basically hard to make innovation profitable. And the Other is wealth management. Wealth management used to be very lucrative when returns were very high and customers were quite undemanding. But now customers are much more well informed and more demanding and returns are lower. The and there's an international push for transparency. I'm still very optimistic on Switzerland. I think they will still continue to punch above their weight for quite a while, but they have to be aware, you know, you can never be complacent. But that's, I think, the case with people or countries that are successful in general.

Wendelin, thank you very much for joining us.

Always a pleasure, Jason.

This week our interview show the Economist Asks comes from the World Economic Forum in Davos. My colleague Anne McElvoy speaks to Adina Friedman, the chief executive of Nasdaq, and the economist Adam Tooze about how the war in Ukraine will change the world economy. Look for the Economist Asks wherever fine podcasts are sold and traded.

The Kremlin's propaganda machine is working hard to shape Russia's view of the war in Ukraine. It's also trying to influence the rest of the world. On Twitter, an army of suspicious accounts is pumping out pro Russian propaganda. And it may be working, just not in the West.

A big factor in the war in Ukraine is whether or not countries abide by Western sanctions on Russia.

Sandrej Solsted is the Economist's senior data journalist.

Russia has been active online, sending pro Putin and pro invasion content to try to win the hearts and minds of people outside the country. And to Western ears, a lot of this content seems pretty absurd. So it paints Ukraine's leaders as Nazis and goes into all sorts of detail about events that quite frankly never happened. But just as Ukraine's military strength surprised the Kremlin, the effectiveness of Russian propaganda might also be underestimated.

And how did you go about measuring the effectiveness of Russian propaganda?

So I decided to focus on a very strange event, which was the global trending on Twitter of the hashtag IStandWithPutin. So what I did was I obtained the accounts of 7,756 people who had shared that hashtag at least five times or the similar hashtag I standwithrussia sometime in the war's first 12 days. And what I did was I tried to look at what these accounts posted and whether they were real people or not.

And what did you find? What kinds of places are being targeted and what sorts of tactics are being used.

So the first thing we did was to look at the content that these accounts shared, independent of it being about Russia or not. And what you saw was that some clusters of accounts emerged. Most of the accounts were from places outside of Europe or North America. A huge cluster in India and South Asia, but also in Africa. Now, what these accounts tended to share were content emphasizing things like anti colonial solidarity in South Africa and stuff about NATO generally in Africa, whereas in South Asia, a lot of it was focused on Russia's diplomatic relations with India and Russian support for India stretching back all the way through the Cold War. So they would post messages like, why didn't NATO listen to warnings? Why didn't they have dialogue with Russia when Putin proposed solutions suggesting that this was some sort of incited war by the Ukrainians?

And do we know, or do we at least think that these messages are the work of the Kremlin?

So looking at the data that we had at that time alone, this is not a question you could really answer. So a lot of people are opposed to Russia or are in favor of Russia's policies for, you know, non nefarious reasons. Though the information they have access to is probably pretty bad considering what Russia is doing. So what we tried to do was to figure out who were actually supporting Russia and who were paid to do so or were bots. And so I collected 3.7 million tweets by these accounts and the accounts that follow them. And then I translated all of these into English using Google Translate. I then manually read 2211 of these posts and classified them as either supporting Russia, supporting Ukraine, or being neutral, and then used a machine learning algorithm to classify all of the tweets, all 3.7 million of them. And then we tried to use that data, sort of the share of tweets that were pro Kremlin, to figure out which users were natural and which were decidedly not.

And what did you find?

So nearly half of these 7,000 accounts that we started with were no longer possible to access. I couldn't get any tweets. I'm not sure what they were up to, because they were deleted, made private, or banned by Twitter. After remaining, I found that about 7% churned out pro Russian tweets in a suspicious manner. Now, what I mean by that is that in the first few days of the war and in the time before that, they didn't post anything about Russia at all. Nothing pro Russian. A lot of them just posted stuff about cricket. And then suddenly, on March 2 or March 1, more than half of their tweets were pro Russia content. And a lot of these messages were identical. So they were not retweets, they were just the Same message, the same picture, in the same order, posted by a lot of different accounts. So this is very, very suspicious. That said, they didn't behave like bots. Apart from that, because it wasn't like they would post a series of tweets in order and being very predictable, they would post, but rather they seem to be real people that happen to be paid for posting this content. That's what I suspect.

So if that's true, if this is an organized campaign that's paying people to post, is it working?

Yes, I'm afraid it does work to some extent. So that was the next thing that I wanted to figure out, and that was why it was so important to look at what the followers of these accounts posted as well. What I found was that these suspicious accounts had an impact on what their followers posted in terms of pro Russian tweets. So after they had gone on a pro Russian spree of tweeting, their followers did too. So their pro Russian messages were retweeted on average 61 times. So that is reaching huge audiences in these countries. Now, this content is concentrated in networks that most people like. Most networks on Twitter, most people don't see most networks. And these Asian and African networks might be particularly not something that a lot of people in Europe and North America look at on a regular basis. And so it might be effective and it might be more widespread than most people think.

All right, Sandre, thanks so much for joining us today.

It was a pleasure. Thank you.

That's all for this episode of the Intelligence. Let us know what you think of the show. You can get in touch@podcastseconomist.com and you.

Can subscribe to the economist@economist.com intelligenceoffer. The link is in the show Notes. We'll see you back here tomorrow.