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LONDON — It is a political comeback like no other.
Seven weeks ago Rishi Sunak was dead and buried, his Westminster career in ruins, his sights reportedly set on jobs in finance or Silicon Valley.
But after a fresh period of political and economic turbulence jaw-dropping even by modern British standards, the man who came a distant second in this summer’s Tory leadership contest will Tuesday be triumphantly installed as the UK’s new prime minister.
Sunak’s chief political enemies, Boris Johnson and Liz Truss, are defeated and unlikely to return. Senior Tories from across the party are uniting behind him. The markets are slowly releasing their grip on Britain’s throat.
He can scarcely have believed any of it possible following that crushing leadership defeat on September 5.
“He is just really happy and thrilled MPs have put their faith in him,” said a member of Sunak’s inner circle, speaking late Monday evening.
“We are relieved, overwhelmed, and very privileged — and determined to make it work. We are not like ‘we told you so.’ We just have a big challenge, and we have got to fix it. Rishi is the right guy for the job.”
Sunak is headed to No. 10 Downing Street for one big reason — he stood his ground and called it right during this summer’s leadership contest, knowing full well Tory members preferred Liz Truss’ seductive program of tax cuts.
As early as July 15, just a week after Johnson announced his resignation, Sunak was accusing Truss of “fairytale economics” by promising billions of pounds’ worth of tax reductions without a costed plan.
As the summer progressed — despite opinion polls showing his message was not landing well with the Tory grassroots — he began warning Truss’ economic ideas could cause an “inflationary spiral” likely to push up interest rates. He also accused her of wanting to “avoid independent scrutiny of the OBR.” [Office for Budget Responsibility] in the emergency budget.”
His warnings were vindicated within a fortnight of Truss taking office. Her mini-budget was filled with unfunded tax cuts and was unveiled without any OBR analysis of the public finances, spooking global markets at the UK’s sudden change of direction. Truss sent the pound crashing to record lows against the dollar while government borrowing costs surged.
The Bank of England is now expected to increase interest rates to six per cent by the end of the year, increasing household bills for millions of mortgage-holders and making business investment difficult.
Somehow Sunak held his tongue, wisely resisting the temptation to deliver a gleeful “I told you so” to Truss and her failing government.
“Frankly, it’s quite obvious that what Rishi was warning of in the summer has come to pass, and hopefully he’s now in a position to rectify it,” said Andrew Bowie, a Conservative MP who was one of Sunak’s early backers. “But I don’t think anybody is gleeful. We’d rather that we weren’t in the position we are in.”
Among the wider party membership there is now a quiet sense of vindication from those who backed Sunak’s message of moderation during the summer over Truss’ ballsier, more eye-catching campaign.
“It’s not gloating,” one Tory activist insisted. “But there is a sense of ‘well, we did say this would happen.’ Now we need to get it right this time.” A former government adviser said there was a feeling among Tory “sensibles” that “now we are basically coming in with a broom and having to clean up the mess.”
Bumpy road ahead
Sunak’s supporters can perhaps allow themselves a brief moment to feel smug about their choices — but their man now faces a number of daunting challenges ahead.
First his new administration must finalize a package to help households and businesses pay their soaring energy bills, after two radically different programs were outlined under Truss during her six weeks in power. More broadly, he must seek to balance the UK books — likely through tax hikes and spending cuts — at a time the National Health Service and other parts of the state are already under immense strain.
As one Sunak-backing Tory MP pointed out, the pressure from markets for Britain to over-correct after the turmoil of Truss’ mini-budget means he is constrained in a way he might not have been had he beaten her in the first place.
“If Rishi had been leader six weeks ago, we probably wouldn’t have been in the same situation we are in now, because the markets would have had more respect for the decision-making in No. 10 and No. 11,” said Scarborough MP and select committee Chairman Robert Goodwill.
“Any PM is currently just ‘vibes’, because [in reality] the Treasury is in charge,” observed another MP, who backed rival candidate Penny Mordaunt.
Sunak also faces an enormous battle to revive the fortunes of the Conservative Party, now 12 years in office, hopelessly split and tanking in the polls.
New research by the center-right Onward think tank predicts the Tories face oblivion if the new leader does not fully break with so-called Trusonomics in favor of more economically interventionist measures which would bring jobs and growth to poorer parts of the country.
More than one in three voters (35 percent) rate their chances of ever voting Conservative at zero percent, according to the research, while 41 percent say they would prefer a government focused on reducing inequality over growing the economy.
Will Tanner, director of Onward, said Sunak had been defined by “fiscal realism” but had also supported Boris Johnson’s “leveling up” program, “so there is quite a lot to Rishi Sunak’s policy which aligns with this agenda.” But Tanner warned: “We’re in a different economic situation [to when he was chancellor] and there will be more challenging circumstances to deal with as PM.”
Many Tory MPs believe Sunak is unquestionably now their best option to go up against opposition leader Keir Starmer, because he is at least seen as a competent leader and safe pair of hands.
But even with the widely-disliked Truss now gone, the Labor Party remains bullish about their chances at the next election, likely to be held in 2024 or January 2025.
One Labor MP suggested the party would now focus on the Conservatives’ tarnished brand and their 12-year record in power rather than on specific individuals in the next election campaign, hammering them on the fall in many people’s living standards and on struggling transport and health services.
Inside the opposition leader’s office, Sunak is widely thought to be beatable — and one Labor adviser’s verdict was succinct. “This is the man who spent the summer being embarrassed and outperformed by Liz Truss,” they noted with a smile.
Sunak may need to up his game again for the challenges ahead.
Annabelle Dickson and Emilio Casalicchio contributed reporting.