Former chancellor Rishi Sunak has made it to Downing Street (Picture: Number 10/ Flickr)
Rishi Sunak’s second attempt to take control of the Tory party saw him handed the keys to Number 10 on Monday. Sunak, the man who once said he had no working class friends, clawed and scraped his way to the top after Liz Truss’ demise. He beat leader of the Commons Penny Mordaunt and knocked his former boss Boris Johnson out of the race.
As Johnson’s chancellor, Sunak helped the pandemic spread with his Eat Out to Help Out scheme and slashed universal credit uplift payments. His only solution to skyrocketing prices was a tiny 5p a litre reduction in the price of petrol.
Just like his boss, Sunak was fined by the Met police for breaking lockdown rules during the Partygate scandal. He later claimed that Johnson’s handling of Covid lockdowns was too thorough—“empowering” scientists and encouraging scaremongering. That’s despite Britian having one of the highest pandemic death rates in Europe.
Sunak has been criticised by some Tories for being too soft on lowering taxes. He had planned to raise corporation tax from 19 to 25 percent and National insurance contributions. But as the richest man in the House of Commons, Sunak is partial to tax avoidance.
In 2020, he was found to have not declared his wife Akshata Murty’s financial interests, including a combined £1.7 billion shareholding in her family’s company Infosys. Then this year, Murty, daughter of one of India’s richest men, was revealed to have been using non‑domicile status to avoid paying British taxes on her massive overseas earnings. This saved her at least £4.4 million last year. Sunak also waived his salary as chancellor so that—as a US Green Card holder—he could avoid paying tax in the US.
Having the first non-white prime minister in Downing Street isn’t a triumph for diversity. During his previous leadership campaign, Sunak backed deporting asylum seekers to Rwanda and pledged to “crack down on gender neutral language”. Sunak also said he wanted to slash taxes by 20 percent by the end of the decade, promising to cut income tax to 16p—putting some £6 billion less into the public purse.
The ex-banker will certainly seem like a safer pair of hands to bosses and businesses to solve the current economic crisis. As former chancellor George Osborne put it last weekend, “There’s someone else with a vote in all of this at the moment, and that is the markets. We don’t have to wait for a general election for them to have a vote.”
But Sunak faces a combination of problems. His party faces a crisis of legitimacy. And, it is doubtful they can offer a political lead when faced with crushing economic issues, an environmental crisis and the war in Ukraine. He might last longer than Truss, but the battle against him starts now.
What horrors are the Tories set to unveil in chancellor Jeremy Hunt’s statement on Halloween, next Monday? Hunt smashed predecessor Kwasi Kwarteng’s plans to cut taxes for the rich, but now warns that he’s about to make decisions of “eye watering difficulty”. That’s Tory code for bloodcurdling spending cuts on public services, as the ghost of austerity comes back to haunt Britain.
Hunt will use his statement to publish the government’s fiscal plans, which will include cuts and tax hikes. He’s set to take a meat cleaver through the energy bills support—which will end in its present form in April. But the architect of austerity 1.0 is set to go all out to please the bankers and the markets.
Paul Johnson, director of the Institute for Fiscal Studies, said, “Hunt will need to find a way of making his plans credible.” That is likely to involve at least some cuts to planned investment and day to day spending—such as health, pensions, welfare, education and defence. “There are no easy options here.”
Hunt sheds crocodile tears about the vicious period of cuts he’s about to unleash. But it will be a major assault on working class people and that we must resist.
The latest phase of the Tory crisis began on Thursday last week as Liz Truss resigned after just 44 days as prime minster. Her tax cuts and borrowing plans upset the bankers, the markets and the International Monetary Fund. She never recovered from their vote of no confidence.
Truss sacked Kwarteng but it soon became clear she could not carry on. Tory MPs saw her as a vote-loser and a route to extinction. The shabby process highlights the lack of democracy in the system. Theresa May followed David Cameron in 2016 after an internal Tory election. Boris Johnson followed May the same way. Truss then replaced Johnson with the backing of only Tory members.
Now Sunak has re‑entered Downing Street armed only with the support of Tory MPs. The Financial Times newspaper wrote last week, “The Tory party has shown itself inept, riven with factionalism, contemptuous of the rule of law and exhausted of credible economic ideas.” The Tories cannot be allowed to ride out yet another extraordinary political crisis.
Like mould that keeps coming back, Boris Johnson returned to headlines last weekend as he attempted to take back Tory leadership. Johnson had some 59 Tory MPs backing him in the hope he could float their sinking ship—despite them kicking him out just three months ago. The possibility of a comeback was an insult to us all, but in the end his long list of crimes risked tearing the Tories apart.
That’s why leading right wingers and such as Kemi Badenoch, Suella Braverman and Lord Frost refused to back him. But former home secretary Priti Patel and Jacob Rees-Mogg did. Johnson remains up to his eyes in expenses and corruption scandals, and faces being kicked out of parliament for lying about breaking lockdown laws.
From funding for renovations in his Downing Street flat, to not revealing donations into his bank, Johnson’s corruption is coming back to bite him. None more so that his hosting of illegal parties during three waves of Covid restrictions.
When asked about his conduct, he told a private meeting of MPs that he’d “do it again.” Johnson was finally booted out of Downing Street after it was revealed he ignored multiple accusations of sexual misconduct against his as deputy chief whip Chief Pincher. “Hasta la vista” were his last words as prime minister. He should stay gone.
Nigel Farage, former UKIP and Brexit-turned-Reform Party leader, attempted to use the Tory crisis to push his nasty right wing agenda. Taking a swipe at the Tory “circus” he proclaimed that the stitch up is a “Remainer coup”—despite new prime minister Rishi Sunak being pro-Brexit.
And of course, he made sure to scapegoat migrants by accusing the Tories of being too weak on border controls. But in an acknowledgement of his own weakness, Farage wrote last weekend, that without reform to the electoral system his own return to politics would be impossible.
Labour’s response to the Tory crisis is to prove desperately it will do everything “the markets”—the bankers, financiers and top bosses—want it to. At the very least it will mean dropping some of the party’s already meagre promises. At every twist and turn of the Tories’ debacle, Labour responds that it offers “stability” for the system, which it says will benefit everyone.
Yet in an interview on Sunday last week, party leader Keir Starmer warned not to expect too much from a Labour government. “There are things that we would like to do as an incoming government that we will not be able to do as quickly as we would want,” he said. Instead, Starmer said Labour would wait for the Office for Budget Responsibility to tell it what it could do.
He said that would mean “difficult choices” in government. That’s a hint that Labour might not only abandon its pledges, but follow through with cuts. But while Labour has only dire warnings for ordinary people, it’s desperate to woo big business. The Telegraph newspaper reported that the party’s shadow chancellor Rachel Reeves has launched a “Prawn Cocktail Offensive 2.0”.
That’s a reference to arch-right wing former leader Tony Blair’s push to win over businesses in the 1990s. It says Labour has been talking to banks NatWest and HSBC, bosses from Tesco, Sainsbury’s and Amazon, top stock-exchange-listed companies, and the B5 collection of bosses’ groups. The bosses seem to be listening. Tesco chair John Allen last week backed Labour as “the only team on the field.”
And a “senior Labour source” told the Telegraph, “From lobbyists and public affairs, there’s a huge amount more interest in the last few weeks.” A political lobbyist representing major businesses said that firms are moving “en masse” to set up meetings with Labour. Just to reassure them, Labour won’t put a toe outside the safe confines of the parliamentary system.
In an interview last week Reeves said, “It will be through parliament that we get a new general election.” But, as even Starmer admitted, that means waiting for the Tories to get rid of themselves, while doing nothing to the point of being invisible. So, in the depth of one of the most extraordinary crises in the Tories’ history, Labour refuses to consider anything remotely out of the ordinary, and claims it is powerless. The Tories’ crisis has exposed Labour as well.
Liz Truss held back-to-back parties at Chequers, the prime minister’s posh mansion, last weekend to thank ministers and staff who supported her doomed premiership. She held a farewell party for ministers on Saturday night, and another for close aides and their partners on Sunday. Truss is eligible for an annual allowance of up to £115,000 granted to former prime ministers to help them with costs “arising from their special position in public life”.
The fund was set up by Tory prime minister John Major in 1991 to direct cash to the departing prime minister Margaret Thatcher. In 2020-21, the most recent year there are accounts, John Major, Tony Blair, Gordon Brown and David Cameron all claimed more than £113,000 from this allowance.
Theresa May claimed about £58,000. Truss also grabs a cash payoff of £18,860—a quarter of the additional £75,440 a year she took on top of her MP’s salary as prime minister. She is entitled to issue a resignation honours list, which means allies could be given peerages and knighthoods.
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