Sunak the Savior: Will New UK PM Manage to Tame Market and Unite Tories?

Former Chancellor of the Exchequer Rishi Sunak has won the Conservative Party leadership race and is set to become the first person of color to lead the UK. Will he be luckier than his two Tory predecessors, Liz Truss and Boris Johnson?

"Rishi Sunak is by far the most popular candidate among Tory MPs, and it must be borne in mind, he was also by far the most popular when he was fighting for the leadership when Liz Truss won. So, among Conservative MPs, Sunak is very, very popular and there is a belief among them that he is the best candidate to lead the Conservative Party in the short term," Alistair Jones, associate professor of politics at De Montfort University in the UK, told Sputnik.

"Now, why is this? Well, I think it has to do with the safe pair of hands that he was during the pandemic when he was chancellor of the exchequer, introducing the furlough policy, for example, which enabled workers to receive pay even though they were unable to work. And this stopped people from losing their jobs, and it stopped a lot of businesses from shutting down," Jones continued.

According to the professor, many British MPs are expecting Sunak to apply his sane and pragmatic approach to a range of other policies as well. This is especially important now, as the Consumer Prices Index including owner occupiers' housing costs (CPIH) – popular gauges to measure inflation – rose by 8.8% in the 12 months to September 2022, returning to July's recent high. As for the pound sterling, it is still down around 16% against the US dollar this year.

Even though UK bonds surged on news of Sunak victory, Morgan Stanley strategists "continue to see the UK as a structural underperformer in the G-10 given weakening growth." "The watered-down fiscal plan is now a drag on growth, and the UK’s weak net international investment position still leaves it reliant on foreign inflows," the strategists wrote in a note to clients.

"Now there are a number of big problems in the UK at the moment of which the energy crisis and the cost of living crisis are arguably the two most important. What Sunak is going to have to do is to demonstrate stability to the financial markets," suggested Jones.

He further presumed that Sunak is likely to retain Jeremy Hunt as chancellor of the exchequer and that Ben Wallace will remain as defense secretary. At the same time, Jones thinks that with the Conservative Party trailing so far behind in the polls, it is important for Sunak to include all wings of the party in his Cabinet, and thus not repeat BoJo and Liz Truss' mistake. Sunak's predecessors used to pack their Cabinets with their close allies, prompting divisions within the party.

"So, Sunak is going to try to demonstrate a degree of stability which was lacking in the Truss regime, which was also lacking under Johnson's leadership, and to demonstrate to the world that the UK is actually a governable country and is a sensible country," Jones underscored.

At the same time, however, the incoming prime minister is reportedly viewed by many as a man "whose career to date has been riddled with contradictions," with the British media already noting that he might have to shake off the "slippery Sunak" tag.

Meanwhile, addressing Tories behind closed doors on October 24, Sunak stated that the party needs to unify, telling MPs it was "unite or die." He also warned his party fellows that the threat facing the Conservatives was an existential one. Sunak further emphasized the importance of fiscal discipline and dismissed the idea of early elections.

The newly elected prime minister emphasized that the party has a last chance to retain power. To that end, the Tories need to fix the economy and prove the party is worthy of being reelected, he said. Sunak's speech won a warm welcome among his party fellows, according to the press.

Did BoJo Really Have a Chance of Taking the Reins Again?

Ahead of the recent Conservative race, some observers suggested that Boris Johnson's comeback to No 10 was real. However, BoJo dropped out, with the press speculating that the former prime minister had the public backing of only 59 Tory MPs, far short of the 100 required to be included on the ballot. For comparison's sake, Sunak had over 150 backers, while another contender, Penny Mordaunt, had just 25.

Commenting on his decision to pull out of the race, BoJo said that even though there was a "very good chance" he could have won No 10 back, "this [was] simply not the right time."

"When Johnson announced he was stepping down at 9:00 UK time last evening, he claimed to have met the threshold of 100 MPs supporting him," said Jones. "But there was no supporting evidence from him or from any of his supporters that he had actually met that threshold… [A]lthough he'd been glad handing many MPs to try to encourage them to support him, there was a lack of support for him. And this can be linked back to his removal as prime minister only a few months ago because of his inability to tell the truth and his inability to actually lead the party."

Furthermore, Johnson can't really make any long-term plans given that he is still under investigation by the Privileges Committee in the House of Commons for misleading the House, according to the professor.

"If he is found guilty by the Committee, and if Parliament votes to suspend him for up to ten days or more – that ten-day threshold is important – if it's ten days or more, then there can be a recall vote in his parliamentary constituency. And if 10% of residents, voters in that constituency vote to recall Johnson, he is removed as an MP and he cannot stand in the subsequent by-election," Jones explained.

"The question was for his long-term political career: can he find another seat somewhere else? And of that, there is little chance of such a thing happening before the next general election in 2024," the academic concluded.