OPINION - We are heading into an economic storm with a leader we barely know

 (Evening Standard)
(Evening Standard)

Even in a year of extraordinary political volatility, the fall and rise of Rishi Sunak has been an astonishing spectacle. On the day of his appointment as prime minister — the first Briton of Asian descent to achieve the distinction — it is worth recalling that in April it seemed possible he would leave frontline politics.

Bruised by the poor reception given to his Spring Statement and the controversy over his wife’s tax affairs, his own US green card, and (lest we forget) his fine for breach of Covid regulations, the then Chancellor was widely considered to be a spent political force. On April 4, in the ConservativeHome website’s regular survey of party members and their opinion of Cabinet members, Sunak was third from the bottom — below such household names as Nigel Adams and Michael Ellis.

To be fair, he picked himself up off the canvas, resigned on July 5 from the Cabinet to help force the defenestration of Boris Johnson and stood in the subsequent leadership contest — only to be defeated by Liz Truss.

That was a mere seven weeks ago. Now, after the disastrous interlude of the Truss premiership, he is at last in Number 10 and digging into the most formidable in-tray to face any new PM since Margaret Thatcher in 1979 (perhaps worse even than hers).

Sunak’s public popularity was never greater than in the depths of the pandemic, when he was especially associated with the job-saving furlough scheme. Yet one of the reasons that he was always so cautious about lockdown — and often explicitly hostile to its extension or renewal — was that he knew the emergency measures he was taking would one day involve the Mother of All Credit Card Bills landing on the Treasury’s doormat. What he did not know was that the impact upon the public finances would be radically compounded by the conflict inUkraine, a significant factor in present levels of inflation.

Rising interest rates, soaring prices, millions of families facing serious financial difficulties and many struggling to keep absolute poverty at bay: this is the landscape that Sunak inherits. Yet as Kwasi Kwarteng’s successor as Chancellor, Jeremy Hunt, has correctly observed, the restoration of basic economic stability will involve some extremely unpopular decisions, including spending cuts (certainly in real terms) that will pile the pressure upon public services already faltering.

We will get a clearer sense of the prospective pain when the medium-term fiscal plan, expected on Monday, is unveiled. But it is already certain that tax rises and renewed austerity will be involved in the blueprint for economic recovery. Such measures are never popular. When prices and mortgage premiums are on the rise, they have the potential to be politically toxic.

At present, and understandably, the Conservative Party is basking in the glow of a political movement that escaped an extinction level event at the weekend (as Boris Johnson made his absurd bid to return to Number 10) and is now led by a politician of proven competence and strategic ability.

Yet Sunak’s honeymoon, if he has one, will be brief. For all the talk of unity today, he has inherited a party that may have become ungovernable; that has simply lost its once-famous instinct for behaving, when necessary, as a single organism. The new prime minister prevailed in the race to succeed Truss partly because he was able to win over unexpected allies such as the hardline Eurosceptic Steve Baker and the Rightwing former Home Secretary, Suella Braverman. But their support will have been won with reassurances about how Sunak will govern; it is strictly conditional.

Above all, he must reintroduce himself to the electorate; those millions of voters baffled by the arrival in Number 10, for the second time in two months, by a prime minister they did not directly vote for.

Yes, Sunak had a high profile as chancellor, and was spotlit during the race to succeed Johnson, but in practice he is an unknown quantity for the overwhelming majority of voters. If the polls and political history are any guide, many of them will already have decided not to vote Conservative at the next general election. To stand any chance of seeing off the revived Labour Party, Sunak must be prepared to answer with panache, conviction and authority the most basic question that, in the event, will decide his own and his party’s fate: who, really, is this guy?