Later today Rishi Sunak will become our fourth prime minister in three years, the first from an ethnic minority in modern times, first Hindu, second to have attended Winchester College, our fifth consecutive Oxford alumnus and the youngest prime minister since 1812.
In many ways Sunak is a reversion to a Conservative archetype. He was head boy at a public school, then studied politics, philosophy and economics at Oxford, where he did a week’s work experience at Conservative Party Headquarters for good measure, and his views on economic policy combine his Silicon Valley belief in the entrepreneur with his lucrative time at hedge funds before the 2008 financial crash. As he set out as chancellor in February, he believes growth does not come from unfunded tax cuts or expanding the role of the state. It comes from, he believes, creating the conditions for the private sector to grow. Or, as George puts it, “Sunak is the UK’s most Thatcherite prime minister since Thatcher herself”.
It’s worth remembering that economic policy was the root cause of his disagreement with Boris Johnson. Sunak said that he resigned in July, which precipitated Johnson’s resignation, because their approaches on the economy were “fundamentally too different”. He criticised his boss for not accepting that a high-growth, low-tax economy could only be achieved if “we are prepared to work hard, make sacrifices and take difficult decisions”.
Why is this important? Because the electoral coalition that gave the Conservatives an 80-seat majority in 2019 was in part founded on a manifesto which combined social conservatism with higher public spending and an activist state. Some MPs now think the only way Sunak can avoid merely presiding over the managed decline of the Conservative Party is to revert to that manifesto. Or, as the centre-right think tank Onward notes in a report, “an economic policy that helps a broad range of people, not just those who are well-off and a clear commitment to investment in the NHS and public services”.
There are two reasons why Sunak may not do this. First, the 2019 manifesto was written before the pandemic, before the war in Ukraine sent energy prices soaring and before Liz Truss’s mini-Budget inflated borrowing costs and undermined the UK’s economic credibility. Second, Sunak first and foremost believes in fiscal responsibility and low inflation. Indeed, one of his supporters, Mark Harper, said yesterday that fiscal policy will now work alongside monetary policy in combating inflation. All of which points towards tax rises and spending cuts.
No one voted for renewed austerity in 2019, however. Unless Sunak can find a way to revive that coalition, he may simply serve only as a cushion to soften the Tories’ downfall.
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