(Bloomberg) -- Face with public outcry, Boris Johnson apologized after a video emerged showing key aides joking about a Downing Street Christmas party in possible breach of Covid-19 rules as the government readies more restrictions.
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It was a double onslaught for the prime minister during his weekly question-and-answer session parliament. He was accused of taking the British public for fools, while the Financial Times reported that the government will require vaccine passports inside large venues and an order to work from home as soon as Wednesday night.
All this has put Johnson yet again on the defensive as fury mounted among fellow Conservatives about the government's loose grip of the pandemic just as the latest omicron variant is unsettling markets.
When asked, Johnson said no decisions will be made without the cabinet. His top ministers have been divided on the issue. The yield on 10-year benchmark U.K. bonds fell as much as five basis points to a three-month low, while its German peer tumbled to minus 0.41% the lowest since August. Money markets pared wagers on Bank of England rate hikes.
"I understand and share the anger up and down the country at seeing No 10 staff seeming to make light of lockdown measures and I can understand how infuriating it must be to think that the people who have been setting the rules have not been following the rules," Johnson told the House of Commons. "I apologize unreservedly for the offence it has caused up and down the country and I apologize for the impression that it gives."
A slew of Tory MPs said Wednesday that the fallout from the video, which was leaked to broadcaster ITV, threatens the party's prospects in a parliamentary election next week. They also warned it's likely to reduce public compliance with pandemic rules, amid reports the government is considering stronger measures to tackle the emergence of the new omicron coronavirus variant.
The episode casts further doubt over the integrity of Johnson's administration after a turbulent period even by his standards, including the prime minister's botched handling of an ethics probe into a Conservative MP that ignited anger among rank-and-file Tories. The party has slumped in recent opinion polls, while Johnson's own popularity fell to its lowest level in November.
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One minister told Bloomberg the Conservative Party is demoralized, while a former minister said they are fed up with issues like this detracting from the business of running the country. "The buck actually stops at the top," Tory MP Roger Gale told BBC radio on Wednesday.
The latest backlash started to build last week, when the Daily Mirror newspaper reported that about 40 to 50 people partied at Johnson's official office at 10 Downing Street "cheek by jowl" on Dec. 18 last year. Johnson and his ministers have since said repeatedly that "no rules were broken," a line which the prime minister repeated to broadcasters on Tuesday.
But events escalated dramatically later when a video that was recorded four days after the reported party was aired by ITV News. It shows Johnson's then press secretary, Allegra Stratton, rehearsing for a TV media briefing and saying there was "definitely no social distancing," when asked about a party.
Though Johnson's office then issued a statement denying a Christmas party took place, even the Tory-supporting Daily Mail ran the story on its front page on Wednesday, under the headline "A Sick Joke."
On Wednesday, Johnson told the House of Commons that he's asked Cabinet Secretary Simon Case to "establish the facts," adding that "It goes without saying that if those rules were broken, then there will be disciplinary action for all those involved."
The mood of Johnson's Conservative Party will concern him, especially ahead of a potentially tricky special election in North Shropshire next week.
That's the historically safe Tory seat vacated by Owen Paterson, a former cabinet minister who quit after being found guilty of breaking lobbying rules, despite a failed attempt by Johnson to protect him.
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Asked if they are worried about the impact of the party fallout on voters, one former minister said the "Tories look like a shower of shits." For the time being, no media reporting on the party has suggested Johnson himself was there.
The Downing Street Christmas saga has echoes of the so-called Barnard Castle controversy of 2020, when Johnson's then chief aide, Dominic Cummings, broke lockdown rules and triggered weeks of negative media coverage and cries of hypocrisy.
Its link to Christmas is also especially sensitive for Johnson, who faced widespread criticism last year when he re-imposed pandemic restrictions at the last minute, preventing many families from meeting.
The Christmas party fallout risks undermining the government's message, according to Charles Walker, an influential Tory backbencher.
"The Number 10 party means that any future lockdowns will be advisory, whatever the law says," he told the BBC late Tuesday. "People if required in law not to meet friends and relatives will say, 'Look it didn't happen last year at Number 10 Downing Street and it's not going to happen this year then at Number 10 Acacia Avenue'."
(Adds Johnson comment to report of new restrictions.)
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