Rishi Sunak: The New UK Prime Minister Faces a Tough Winter!

The embattled Ms Liz Truss, within 24 hours of asserting herself against the mocking members of the House of Parliament saying, “I am a fighter and not a quitter, I am someone who is prepared to front up …”, resigned as UK Prime Minister admitting, “I cannot deliver the mandate on which I was elected by the Conservative Party”. 

In the wake of Ms Truss’ resignation, the former Prime Minister, Mr Boris Johnson rushed back from his holiday in the Caribbean to make a fresh campaign for 10 Downing Street but realizing that “this is simply not the right time to allow my nomination to go forward”, withdrew from the race committing his “support to whoever succeeds”. Later, Ms Penny Mordaunt, the Conservative Party leadership contestant, also withdrew from the race declaring that “Rishi Sunak had her full support”. 

The direct consequence of all this is: Mr Rishi Sunak, the lone contestant from the Conservative Party commanding the support of over 195 Tory MPs, became the Prime Minister of the UK. Amidst the growing nationalism and the extreme right-wing philosophy thwarting liberalism in many democracies across the world, the 42-year-old Mr Rishi Sunak, a non-white and a non-Christian becoming the Prime Minister of the UK has an incredible symbolic value. And one of the most reassuring things to happen is: British people reacted to his election as though they are totally disinterested in it.  

And, there ends the value of symbolism as unprecedented challenges stare at the new Prime Minister: a Conservative party that is riven into factions which has driven away two prime ministers within three months, spiralling economic crisis with an estimated 8 million people in the country struggling to pay their energy bills, increased government borrowing costs following the Mr Kwasi Kwarteng’s mini-budget, its reputation being at its low in international media—Lawrence Summers, the former US Treasury Secretary described it as a “submerging market”—the war in Europe with no end in sight, which means the energy crisis and soaring inflation will stay on, and Labour Party’s demand for immediate general elections to replace Rishi, for he does not enjoy the mandate of people. 

Ever since the UK exited the European Union, its economy landed in a difficult position. Having left the EU, with an 8.4% of GDP current account deficit, an inflation rate of 10.9% as of the end of September, and a tight labor market, UK is finding itself isolated. Obviously, what the ailing economy calls for is: re-establishing an element of confidence in the markets that even after huge spending on the Covid-19 pandemic and the likely commitments now being made on the energy price guarantee, its economy can run on its own, for it is now under the care of matured leadership which is willing to rein in the gap between spending commitments and the revenue. And, Mr Sunak knows his job well, but markets are afraid that Mr Sunak being a former Chancellor of the Exchequer may try to work as Chancellor and Prime Minister simultaneously.  

As against this reality, markets are clueless about his economic agenda or, for that matter, what his program for the government is, for the leadership contest this time round has offered no necessity for such public debate. So, markets have to perhaps wait and see how it unfolds on the mini-budget day.

Over and above all this, he faces a personal challenge: he is perceived by many as a ‘representative of old-style politics’. Indeed, many believe that it was one of the reasons why the Conservative members did not vote for him in the recent contest against Liz Truss. For them, he is the rich guy from Goldman Sachs, wearing designer suits and Prada shoes. There is thus a slight cultural uneasiness prevailing among the conservatives. 

Amidst these inherited challenges, his re-appointing Ms Suella Braverman, a known immigration hardliner, and an apologist of the empire, as Home Secretary, sparked concerns about the direction of his government. Critics are questioning the appointment, which according to them is at odds with his promise to give a government of “integrity, professionalism, and accountability at every level”. Liberals are demanding that he should stand up for human rights and reaffirm his commitment to the ECHR and Human Rights Act. 

So, Mr Rishi Sunak has a tough task ahead: has to walk a fine line between keeping the markets in good faith while providing relief to the public that was shattered by rising inflation and bringing back the growth while not repeating the mistakes of his predecessors in the anxiety of pleasing the party. A challenging task indeed, but Britain’s history assures that people would be with him to push through his alternative program.