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25 August 2022

Rishi Sunak’s next move

He may never become prime minister, but he is sure to land softly.

By Harry Lambert

Rishi Sunak’s political career has barely begun, yet it may soon end – if, as expected, he loses this summer’s Tory leadership contest to Liz Truss. This is modern politics: no one has any staying power. MPs now tend to enter and exit parliament within a decade. Fewer than one in four current MPs sat in parliament during the last Labour government; the rest have joined parliament since May 2010, and many Tories elected that year had left the Commons by 2019.

Sunak only entered parliament in 2015, days before his 35th birthday, but Tory MPs are sceptical that he will sit on the backbenches for long if he fails to beat Truss. One of his backers thinks he should do just that, and “bide his time” if he wishes to be prime minister one day, but that view comes from one of the few MPs who has been in parliament for decades, and young generations of MPs see parliamentary careers differently.

The range of work available to the young, mobile and talented is greater than ever, especially for someone as well-heeled as Sunak. The constraints of being an MP are also greater than ever: donations and hospitality must (rightly) be declared, and any other work an MP does is now subjected to far greater press scrutiny. Being a member of parliament is today a full-time job that is largely anchored in one’s constituency, not a part-time job focused on the House of Commons, as it was in the 19th century and for much of the 20th.

Sunak will not, if he loses, have the luxury of time and space that was afforded to a Disraeli or a Gladstone in earlier eras. Those politicians built their careers by being able to essentially forget that they were an MP whenever they failed in their tilts for power or were thrown from office, while crucially retaining their seats in the House. Constituency casework was not, for example, on Gladstone’s mind when he resigned from Palmerston’s cabinet in February 1855 and, having “grown tired of London and the House of Commons”, retreated to his castle in Flintshire to begin work on a three-year, three-volume study of Homer. Nor was Britain’s future prime minister troubled by the demand of whips in those years: between August 1857 and February 1858 Gladstone – a serving MP – spent just 14 days in London.

If Sunak wishes to wait in the long grass for Truss’s demise, in contrast, he will have to do it in the actual House of Commons, and possibly share the backbenches with another political force of rather more guile and ruthlessness: Boris Johnson.

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Positioning yourself while you wait for a prime minister to fall is also a fraught task. Jeremy Hunt turned down the position of defence secretary in Johnson’s cabinet three summers ago after being defeated in the last leadership election and instead took charge of the Health Select Committee while writing a book about the NHS. This did not help him when he ran for the Tory leadership again this summer: he came eighth.

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It is interesting to wonder how much better placed Hunt may have been if he, rather than Ben Wallace, had served as defence secretary for the past three years. (As well as what effect this might have had on British support for Ukraine over the past year.)

This is why Sunak may be wise to accept the supposed offer of health secretary in Truss’s cabinet – if, that is, he wishes to remain in contention to lead the Tory party. Few MPs think he will have the patience to do so, however, given the other options likely to be available to him. And Hunt, after all, served as health secretary for six years. It did not help him convince the Tory membership in 2019. That membership may simply be far too right-wing for someone like Sunak to win it over.

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

What then might Sunak do if he does leave parliament? Three options stand out. He could follow Nick Clegg, like him a politician of once-great popularity, and take up a role in tech on America’s west coast – Sunak and his wife famously retained their US green cards. Clegg works at Meta, the parent company of Facebook, Instagram and WhatsApp. Other tech companies such as Amazon and Uber have hired senior Obama administration officials, and Sunak would likely be a prized recruit in government affairs. I was recently told by an informed source that Clegg now earns $150 million.

Sunak could also, less lucratively, follow the New Labour path to the east coast of America: to Harvard, say, where Douglas Alexander retreated from politics for a time, or to New York, where David Miliband went, to take over the International Rescue Committee, after his failed Labour leadership bid.

Finally, Sunak could choose to stay in the UK but return to finance or move into business. The UK’s tax system is far more generous to capital than it is to labour. Sunak could, for instance, seed a series of businesses with up to £100,000 in funding under the Enterprise Investment Scheme. The scheme offers significant tax relief to investors, so Sunak could lose half of his investment but in effect lose only £11,000 after tax relief. Even if the investment gains no value, he could actually gain £30,000 in tax relief alone.

And any gains Sunak does make on his capital will be taxed at only 20 per cent, half the top rate of income tax. Any company Sunak could back would also benefit from Truss’s imminent plan to scrap Sunak’s proposed rise in corporation tax.

Whatever happens in a fortnight, in other words, Sunak has options. He may never become prime minister, but he is sure to land softly.

[See also: How Boris Johnson comes back]