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5 September 2022

Why Rishi Sunak failed

The former chancellor, once Britain’s most popular politician, seems to have let No 10 slip from his grasp. Where did he go wrong?

By Harry Lambert

It is hard now to remember how different the world was a year ago. No war engulfed Europe. Energy bills were still payable. Droughts plagued California, not Britain. And Rishi Sunak was the most popular politician in the country, still trading on the acclaim he won as a munificent boy wonder of a chancellor during the pandemic. Liz Truss, meanwhile, was little more than a jobbing cabinet minister, plying her parodic mix of pomp and pageantry as Boris Johnson’s international trade secretary. Johnson himself believed he was heading for a decade in power.

Today, Johnson has been defenestrated. But it is Truss, not Sunak, who is most likely to replace him. Sunak has been unable to alter the fundamental truth that has plagued him in this summer’s Conservative leadership contest: the party membership is still defined by its views on Brexit, and its ranks are dominated by Tory Leavers who much prefer Truss to Sunak. Sunak is popular among the party’s Remainers, but the membership has almost four times as many Leavers.

To beat Truss, Sunak needed to change the way he was seen by Tory Leavers, but he had little time to do so. Conservative members vote soon after receiving their ballots, and recent polls suggest that Truss has already got the votes she needs to win. A YouGov poll in August found that 60 per cent of Tory members support Truss, and that five in six of those had made up their mind how they would vote. If so, she has secured 50 per cent of the vote, and Sunak just 18 per cent.

But the race cannot be understood through Brexit alone. Sunak, after all, backed Brexit in 2016, while Truss did not. Yet it is Truss who is considered the true believer in the cause, and Sunak who Tory members feel represents the establishment that they, through Brexit, wished to take on, if not take out. “Liz is seen by members as a shot of adrenaline whereas Rishi is being cast as a manager of decline,” says a Tory MP. “These are lazy analyses but you can see how they can be painted. Somehow what Liz is doing is dressing up her lack of ability as a form of authenticity. She is managing to be the continuity and change candidate at the same time.”

[See also: Of course Rishi Sunak still thinks he can win]

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But only three in ten Tory MPs voted for Truss as leader in the final round, and many are concerned that the party is making a grave error. “I don’t think she’s up to it,” says one. “I’m profoundly concerned we could find ourselves in an Iain Duncan Smith situation,” he says, recalling the ill-fated winner of the 2001 Tory leadership contest. “Ken Clarke was a better vote-winner but the membership didn’t agree with him.”

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The problem with that parallel, however, is that Sunak is not clearly the superior vote-winner. Far from being a boy wonder, he has, since January, resembled a child playing an adult’s game. He failed to resign over Sue Gray’s preliminary partygate report, which was released on 31 January, but also didn’t back Johnson over the scandal and criticised his boss’s attack on Keir Starmer over Jimmy Savile. Johnson never forgave Sunak, and started referring to him disparagingly inside Downing Street. The Prime Minister’s No 10 team is suspected of then planting the stories that revealed the non-dom tax status of Sunak’s wife and that Sunak held a US green card for more than 18 months while chancellor.

Those stories reinforced the stereotype that haunts Sunak: that he is a multimillionaire member of an international elite for whom Britain is just one playground. “Our membership is provincial,” says a Red Wall Tory MP, who thinks that members find Sunak “too slick, too polished”. Sunak was also arguably over-praised in 2020. As the New Statesman reported at the time, Britain’s defining economic interventions, including the furlough programme, were thought up by civil servants at the Treasury and the Bank of England (some of them veterans of the 2008 financial crisis). Sunak was the frontman, not the fountain of ideas.

His lack of political imagination, and misunderstanding of the Tory membership, was perhaps made most apparent on 23 March, when he delivered his Spring Statement to the House of Commons. I watched Sunak’s address from the press gallery, and it was noticeable how little of it drew excitement from the Tory benches. Sunak, a man comfortable espousing the orthodoxies of the Treasury (that spending must be restrained, taxes maintained and deficits tackled), may have failed to take advantage of an opportunity. He could have used Russia’s invasion of Ukraine the previous month to upend those orthodoxies and cast himself as a wartime chancellor: raising defence spending, cutting taxes, in some way delivering on Brexit.

The fiscally conservative Sunak would have thought this bad government, but it would have made for good politics. Truss has a finer understanding of which matters more in the contest to succeed Johnson: she has won fame by signing immaterial trade deals, reportedly overruling advice from officials to do so. But bad policy can make for good pictures. What mattered to Tory members, Truss understood, was for her to be seen beaming beside Union Jacks in the name of Brexit. Sunak, by contrast, has come to be viewed as a grey Treasury man, a Brexiteer in name only.

[See also: Can Liz Truss’s tax cuts save the economy?]

Could Sunak have won power if he had resigned earlier in the year, precipitating a leadership contest at the peak of the furore over partygate? Perhaps. But there is a deep mismatch between Sunak and the electorate that he needs to win over that may always have been insurmountable.

This electorate – the Tory membership – is completely unlike the country at large. It represents a sliver of the public: of the 32 million people who voted in the 2019 election, around one in 200 was a Tory member. And it holds unrepresentative views on everything from the economy and immigration to Brexit. Yet it is to members’ whims and prejudices that Britain’s aspiring Tory prime ministers must cater – and Sunak is failing to do so.

Take the economy. The UK is enduring its worst living standards crisis in a generation and many observers, including Tory MPs, have been bewildered that Truss has refused to guarantee further state support if she enters No 10. “The way I would do things is in a Conservative way of lowering the tax burden, not giving out handouts,” she has said, even though the two major taxes she is promising to scrap – Sunak’s planned corporation tax rise from 19 per cent to 25 per cent, and his recent National Insurance levy – are not paid by the poorest.

This position is, critics argue, quizzical at best and immoral at worst. But it has helped Truss to distinguish herself from Sunak, who announced a windfall tax on energy firms and a costly set of “handouts” for households as chancellor three months ago. And, crucially, it is Truss’s stance on the economy that reflects the world-view of the Tory membership.

In 2020 an extensive poll by the Party Members Project showed that only 17 per cent of the membership believe the government should, as a rule, redistribute income from richer households to poorer ones, despite this being the basis of the British welfare state. Only 19 per cent agreed that “ordinary working people don’t get their fair share of the nation’s wealth”. In 2018 the same researchers found that just 11 per cent of members thought austerity had “gone too far”. Conservative members think that British capitalism works, and few believe that its inequities need to be redressed by the state.

These are the beliefs that Sunak was forced to defy for two years as chancellor. His actions during the pandemic proved popular with voters, but their popularity with Conservative members was always more muted. And having spent £376bn to support the economy through Covid, Sunak has since raised taxes to a 70-year high in a bid to reduce the UK’s £2.4trn national debt. For some members, this, rather than any disloyalty to Johnson, may have been Sunak’s original sin.

Tory members are overwhelmingly well-off. They are unlikely to have benefited much from Sunak’s help for households, but they are now likely to be paying for it. Yet few members, as the data shows, believe in the power of tax to redistribute wealth. “There’s an element of, ‘Well we don’t like taxes, and Liz doesn’t like tax,’” says a Tory MP.

The Conservative membership rose by half between 2018 and 2019, to nearly 200,000, as, after the Brexit referendum, the party at large won back voters who had migrated to Ukip in the early 2010s. (“We’ve obviously absorbed elements of Ukip,” says an MP who has served since 2015.) At the same time, centrist Tories, exemplified by former cabinet ministers such as Rory Stewart and David Gauke, have left the party, dismayed by its rightwards turn. This is self-defeating, as it ensures that the Faragist tendency, though a minority in the country, is a majority in the Conservative Party, which is choosing the UK’s prime minister for the second time in just over three years.

[See also: As the race for Tory leadership ends, Liz Truss prepares to enter No 10]

Johnson is a third elephantine figure in this contest. It is his continued supporters who are gifting victory to Truss. Two recent polls have shown that members would elect Johnson over both Truss and Sunak. Truss is winning because Johnson’s bloc is breaking three-to-one in her favour. By not resigning from the cabinet at any point this year, she has absorbed a strong base of Johnsonian support.

“Maybe the best time for Rishi to resign was never,” a Red Wall MP reflects. “There’s still definitely a pro-Boris element” in the membership, he says. A struggling Sunak has sought to win such voters by aping some of Truss’s policies – a tactic that MPs think has fallen flat. “He started U-turning on cutting VAT for energy bills, and sounding more right-wing on cultural issues than is credible for him. He lost his USP as he did so.”

Sunak’s campaign has been defined by an inconsistency of message, with no sense of mission. He has long failed to offer anything other than anodyne prescriptions for Britain. In his Mais lecture in London on 24 February, a landmark address for a chancellor, he offered little more than an introductory course in economics (countries, he said, need “capital, people, ideas” to thrive). His message was so banal, and his delivery so robotic, that I soon struggled to pay attention.

If Sunak has a cause, it is the pursuit of “sound money”, and he has, like a good Treasury civil servant, sought to attack Truss’s economic credibility. Indeed, Sunak is beloved by his officials, but that wins him no credit with the Tory membership, who have long had enough of experts. Sunak’s realism does not fit their post-referendum narrative, their guiding myth: that Brexit will deliver, if only they could find the right crusader to lead the march.

“If you try to explain things with nuance,” an MP observes ruefully of Sunak, “it’s seen [by Tory members] as being part of the problem. Everything is seen as: if only politicians could use their common sense – but, of course, common sense is a rather subjective quality. Whatever your grievance, they think, ‘Liz is going to govern as a Conservative.’”

The Tory membership have been living in a parallel universe since 2016, and they are not ready to come home. Nigel Farage, whose views so many members appear to share, told this magazine in 2017: “Brexit is an instruction from the electorate to turn around the ship of state by 180 degrees.” The problem for Sunak is that, in the eyes of Tory Leavers, he embodies the state, the status quo they want to upend. Any true Brexiteer has to “actually, passionately believe in what you’re doing… It’s like an act of going to war,” Farage said in 2017. The views of many people have since shifted: polling shows the British now think Brexit was a bad idea. But the Tory membership have not, and in Liz Truss they have found their crusader. In a contest to lead a movement motivated more by fiction than fact, Rishi Sunak never stood a chance.

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This article appears in the 17 Aug 2022 issue of the New Statesman, Six Months that Changed the World