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What is Rishi Sunak's solution to Britain's problems?

Sunak wants to “fix our economy, unite our party and deliver for our country.”

What is Rishi Sunak's solution to Britain's problems?

Since entering the contest to be British prime minister, Rishi Sunak has said little publicly about how he intends to run the country and how he would address multiple economic and political crises.

Sunak ran unsuccessfully to be prime minister earlier this year, setting out a full policy platform. Although some of the challenges have changed since then, what does that campaign tell us about how he would govern?


Economic challenges

Britain is facing an economically toxic combination of recession and rising interest rates. The Bank of England is trying to tame double-digit inflation while consumers face rising costs and falling real incomes.

Britain has to restore its international financial credibility after outgoing leader Liz Truss's plan for unfunded tax cuts and a costly energy price guarantee spooked the bond market last month and forced the Bank of England to intervene.

To balance a budget shortfall made worse by the rising borrowing costs that the crisis caused, the next prime minister will most probably have to oversee spending cuts and tax rises. A fiscal statement addressing this is due on Oct. 31.

That comes as the government faces pressure to help vulnerable households through a painful financial squeeze, with a jump in mortgage costs adding to rising food, heating and fuel prices caused by the war in Ukraine and other global factors.

Economic policies

In a statement issued on Sunday (23) announcing his candidacy, Sunak said the country faced a "profound economic crisis".

As finance minister between February 2020 and July 2022, he set Britain on course to have its biggest tax burden since the 1950s. He also set out higher public spending but simultaneously promised more discipline and to cut waste.

During the summer leadership campaign he criticised Truss's tax-cutting agenda, saying he would instead only cut taxes once inflation had been brought under control. At the time he outlined a plan to cut income tax from 20 per cet to 16 per cent by 2029.

Sunak has backed the independence of the Bank of England and stressed the importance of government policy working alongside the central bank to tame inflation, not exacerbating it.

Political challenges

One of Sunak's first challenges will be to show he can control a Conservative Party that has a large majority in parliament but is riven with factions that differ on key issues like Brexit and immigration as well as economic management.

Higher taxes will be strongly opposed by some in the party; others will oppose spending cuts in key areas like health and defence.

Winning the leadership contest would be only the first step in uniting a party that has ousted its last two leaders over internal differences, and spent years arguing with itself over how to leave the European Union.

Sunak supported Brexit in the 2016 referendum but is still seen by some on the right of the party as too sympathetic to the EU.

The key issue of trade with Northern Ireland is still being negotiated with Brussels. Sunak would face pressure to get a deal that rewrites parts of the initial exit agreement without conceding to a lasting EU say over trade between Britain and Northern Ireland.

He will also face calls to follow through on government promises to control immigration into the country, an issue which many Conservative lawmakers see as critical to winning over voters at the next election.

Political policies

Sunak's campaign launch statement on Sunday said he wanted to "fix our economy, unite our party and deliver for our country."

On Northern Ireland, Sunak previously said he would push on with legislation designed to unilaterally overrule the Brexit deal while still trying to negotiate with the EU. The bill, currently in parliament, has been heavily criticised by the EU.

On Brexit more broadly, in August he promised to "keep Brexit safe" and set up a new governmental unit to review EU regulations that still apply in British law.

In the summer leadership contest, he said he was proud to come from a family of immigrants but he believed Britain must control its borders, and would retain a plan to deport asylum seekers to Rwanda.

He also refused to rule out Britain's withdrawal from the European Court of Human Rights.

(Reuters)

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