Rishi Sunak: He’s key assignment is to address two crises. One economic, one political – the two are directly related. Britain is facing the worst economic crisis for its political disorder. Without restoring political stability, he cannot embark upon the economic issues.
TINA factor favoured Rishi Sunak
Rishi Sunak has now decisively taken over to become Britain’s Prime Minister ‘Decisively’ because in the prevailing dismal scenario of desperation and despondency that Britain has been undergoing, too many Prime Ministers have been tried and tested, then rejected and eased out before Rishi was endorsed as a matter of TINA factor (There Is No Alternative). He is the ‘last option and a ‘desperate’ decision for the conservatives and hence even naysayers within the Tory Party should express pragmatic optimism and fortitude in allowing him to prove his mettle.
As British Prime Minister, Rishi Sunak will be under relentless scrutiny domestically and the world over. The tasks ahead in taming an economic crisis that has led the country’s finances in a very precarious state and where millions struggling to pay their food and energy bills is not a ‘bed of roses.
Sunak’s followers may hope that his arrival reassures global investors that the UK has reverted to sensible, fiscally competent leadership. Yet the economic situation is dire and he will have to oversee a painful period of retrenchment. A key issue will be setting the balance between tax rises and spending cuts
Sunak has to bring together his MPs and the country with this retrenchment. He is likely to agree with Jeremy Hunt that the energy rescue package should be reviewed and scaled back in the spring, but this too carries pain for some. He also faces the problem of public services under immense strain and a wave of strikes over pay.
Illegal immigration issue plaguing Europe is also one of the issues Sunak has to address
Does he have to take a judicious decision on whether to liberalize immigration? Economic consideration may be in favour but political implications may deter him as Tory voters go around the other way.
Yet, all these intricate and thorny problems require the Conservatives to be disciplined enough to support hard choices. Although they have few choices, in case of a mid-term poll, Conservatives are predicted to lose very badly. At the same time, the Conservative party looked almost ungovernable and he has many colleagues who openly loathe him, wrongly blaming him for Johnson’s downfall.
There will be a coterie of opposition to any spending cuts, be they to overseas aid, defence or the upgrading of benefits. The same will be true for tax rises.
Sunak’s victory is a step back to common sense but no one should be in any doubt about the scale of the challenges ahead. Like his predecessor, he finds himself with no money and no reliable majority standing in his support.
While the appointment of Sunak has calmed the markets, it makes it very difficult for him to make changes that could boost the economy. He is expected to announce a wide range of tax hikes as well as cuts to government spending, in a pattern that is in direct opposition to the plan originally proposed by Liz Truss.
This mandate is likely to keep markets steady but is going to make the situation for the British economy even worse, at least in the short to medium term.
Sunak’s Budget to be announced on 17th November
The full details of Rishi Sunak’s economic plan will be announced on November 17th. It had originally been scheduled for 1st November, though with the short period he has been in office this has been pushed back to allow time to finalize the program.
What initially we can presume is that Corporations Tax will be increasing from 19% up to 25%. This will take the UK from one of the lower taxing nations in Europe to the middle – higher range. Some analysts are concerned that this will further dent the charisma of London as a centre for business after it has already been dealt a blow with the exit from the European single market. But, Britons have to bear with it.
Post-Ukraine conflict, the energy crisis is another big challenge for Sunak, and being an acknowledged Putin critic he has to remain in US camaraderie. A prudent economist, Jeremy Hunt will be entrusted to call the shots.
On the Political front, an early sign of his approach will be how his Cabinet will look like. There is a stability argument for limited tinkering but he will want the best team he can assemble while avoiding Truss’ mistake of shutting out those who were not her supporters.
Initial acts quite matured and pragmatic
In one of his first acts, Sunak’s continuance with Treasury Chief Jeremy Hunt, speaks of his pragmatic approach. Apart from Hunt, he kept several senior figures including Foreign Secretary James Cleverly and Defense Secretary Ben Wallace.
On the upside, he is serious and diligent and, unlike Truss, a gifted communicator. He will also seek to return the Tories to what was once a core principle: Being responsible wardens of the economy.
The present government should succeed in stabilizing the current economic turmoil in the larger interest of the country and its citizens. With the damage that the Conservatives have inflicted, there is no room for another failure if not then the next elections would be forfeited.
Will he succeed like Narendra Modi?
Under very similar rather identical situations, Narendra Modi had assumed powers. He proved his mettle and not only became a world statesman but also a visionary leader. Circumstances help a man to create history with innate extraordinary leadership qualities. So be it for Rishi Sunak.
Keep watching our YouTube Channel ‘DNP INDIA’. Also, please subscribe and follow us on FACEBOOK, INSTAGRAM, and TWITTER.
