Dec 3rd 2022

Rishi Sunak's Daunting Challenge

by Chris Patten

Chris Patten is a former EU Commissioner for External Relations, Chairman of the British Conservative Party, and was the last British Governor of Hong Kong. He is currently Chancellor of Oxford University and a member of the British House of Lords.

LONDON – Fate has not dealt Rishi Sunak, the United Kingdom’s first prime minister of color and its third prime minister in two months, a winning electoral hand.

Sunak entered office following two horrendous displays of prime ministerial incompetence. Boris Johnson, who served as prime minister from 2019 to September of this year, combined idleness with mendacity to create “cakeism,” a governing philosophy based on the notion that it is possible to have your cake and eat it. Promise voters whatever they appear to want while paying little regard to whether it is realistic or whether it contradicts other promises.

Johnson was followed by another Conservative Party darling, Liz Truss, who lasted just 44 costly days in office, becoming the UK’s shortest-serving prime minister. With her reckless chancellor of the Exchequer, Kwasi Kwarteng, Truss tried to borrow her way to an economic miracle, announcing massive tax cuts that would have overwhelmingly benefited the rich.

But while many Conservatives and their favorite newspapers cheered her on, bond markets gave Truss’s “mini-budget” an emphatic thumbs down. During the Brexit campaign, right-wingers used to ask, “Who runs Britain?” Last month, they got an answer: the holders of British government bonds who do not want to be on the hook for billions of pounds’ worth of bad debt.

Following Johnson and Truss’s egregious mismanagement, it has become abundantly clear that the Brexiteers require adult supervision. Enter Sunak, whom Truss had beaten for the top job only weeks before, and his new chancellor, Jeremy Hunt. Sunak headed the Treasury until relatively recently, so it is safe to assume that, unlike Truss and Kwarteng, he is familiar with how budgets work. And Hunt – a moderate – will also likely favor fiscal prudence over irresponsible borrowing.

This is not to say that Sunak is perfect. He has made some disastrous political decisions, including his support for Johnson’s bid for the premiership. He is also a dyed-in-the-wool Brexiteer: Leaving the European Union, he argued, would make the UK “freer, fairer, and more prosperous,” and amounted to a “once-in-a-generation opportunity for our country to take back control of its destiny.”

Moreover, Sunak’s political judgment has often been amiss. He has made some silly errors in his efforts to distract attention from his extreme wealth. But his ability to make intelligent decisions, be decent, and distinguish right from wrong should matter more than his (lack of) populist credentials.

Conservatives would like to think that Sunak could easily knock things into shape and prevent an electoral disaster for the party in the next general election, scheduled to take place no later than January 2025. By then, it will have been more than 14 years since the last Labour Party-led government. But recent polls give Labour, under the leadership of the competent (if not very exciting) Keir Starmer, a huge lead over the Tories.

But to have any hope of avoiding a humiliating electoral defeat, Sunak and Hunt must first climb a mountain of daunting economic challenges. Within four years, the UK’s tax burden is expected to exceed 37% of GDP, a postwar record, despite the Conservative Party’s stated belief in lower taxes. The economy is predicted to shrink by 1.4% next year, and inflation is expected to be 7.4%, eroding real wages and likely provoking a wave of industrial action.

Living standards, moreover, look set to fall by 7% over the next two years, the biggest decline in six decades. On top of that, £30 billion ($35.9 billion) in spending cuts will likely be needed to fill the fiscal hole created by Truss’s catastrophic plan.

All of this adds up to a less-than-compelling election message. Conservatives will likely present the coming economic pain as necessary and attempt to deflect attention from their own culpability.

Russian President Vladimir Putin’s invasion of Ukraine is the leading cause of rising energy prices, they will say, and the massive hole in the country’s public finances is the result of helping people through the COVID-19 pandemic. But what about Brexit? Experts estimate its economic cost at 4% of GDP, which is why the Tories have been trying to bully us all into not talking about it. The hunt for the opportunities allegedly opened up by Brexit has proved to be a wild goose chase.

Meanwhile, efforts to restore some sense to British public policy have been hampered by right-wing ideologues who plot under the banner of the European Reform Group. Despite its name, the group is not interested in reform – or in Europe. Its goal is to block any effort to enhance the UK’s relations with the EU countries that make up its largest economic market, or to improve the dreadful Brexit deal negotiated by Johnson.

Even though it undermines both national and party interests, some of these right-wingers oppose the government’s plans to stimulate house building by reforming the planning laws, a move opposed by voters in many of their wealthy constituencies. As the French statesman Talleyrand famously said of the Bourbons, these zealots have “learned nothing and forgot nothing.”

Alas, Sunak’s ability to resist far-right Conservatives is limited by his apparent belief that he must pander to them. To retain their political support, he has had to make several awful ministerial appointments, including that of Suella Braverman as home secretary. But, as always, the more the right gets, the more it wants.

The Conservative leadership must stand up to the party’s extremists, and it must do so sooner rather than later. If moderates cannot defeat the hardliners by the next election, and the outcome turns out to be as bad for the Tories as recent polls suggest, they will find they have the same fight on their hands in opposition.

Conservatives must never underestimate the importance of their moderate supporters. If the Party continues to disregard centrists whenever the Brexiteer right stamps its feet, it may find itself out of power for a long time to come.

Chris Patten, the last British governor of Hong Kong and a former EU commissioner for external affairs, is Chancellor of the University of Oxford and the author of The Hong Kong Diaries (Allen Lane, 2022).

© Project Syndicate 1995–2022

 


This article is brought to you by Project Syndicate that is a not for profit organization.

Project Syndicate brings original, engaging, and thought-provoking commentaries by esteemed leaders and thinkers from around the world to readers everywhere. By offering incisive perspectives on our changing world from those who are shaping its economics, politics, science, and culture, Project Syndicate has created an unrivalled venue for informed public debate. Please see: www.project-syndicate.org.

Should you want to support Project Syndicate you can do it by using the PayPal icon below. Your donation is paid to Project Syndicate in full after PayPal has deducted its transaction fee. Facts & Arts neither receives information about your donation nor a commission.

 

 

Browse articles by author

More Current Affairs

Jun 11th 2022
EXTRACT: "If Trump had his way, then Vice-President Pence would have also broken his oath to the constitution and derailed the certification of electoral votes. Our continued existence as a Republic might very well have hung on Pence’s actions that day. The mob’s response was to call for Pence to be hanged, and a noose and scaffold was erected apparently for that very purpose. What was Trump’s reaction when he was told that the mob was calling for Pence’s summary execution? His words were: “Maybe our supporters have the right idea.” Mike Pence “deserves” it."
Jun 10th 2022
EXTRACTS: "Speaking to journalist Sophie Raworth on the BBC’s Sunday Morning show recently, former war crimes prosecutor Sir Howard Morrison, now an advisor to the Ukraine government, highlighted the dangers posed by the negative – often insulting and dehumanising – statements made by some Russian politicians and media personalities about Ukraine and its people." ---- "The conditions and attitudes described by Morrison have existed for centuries: Russians have viewed Ukrainians as inferior since before the Soviet era." ----- "And, as Morrison said, stereotyping and denigrating a people as inferior or lacking agency makes atrocities and looting more likely to happen, as we are seeing in Ukraine."
Jun 9th 2022
EXTRACT: "Unless Russia realises that the west is willing and able to push back, a new, stable security order in Europe will not be possible. Concessions to Russia, by Ukraine or the EU and Nato, are not the way to achieve this. That this has been realised beyond Ukraine’s most ardent supporters in the Baltic states, Poland, the UK and the US is clear from German support for strengthening Nato’s northern flank and a general increase in Nato members’ defence spending."
Jun 8th 2022
EXTRACT: "Highly civilized people can turn into barbarians when demagogues and dictators exploit their fears and trigger their most atavistic instincts. Rape, torture, and massacres often happen when soldiers invade foreign countries. Commanding officers sometimes actively encourage such behavior to terrorize an enemy into submission. And sometimes it occurs when the officer corps loses control and discipline breaks down. Japanese and Germans know this, as do Serbs, Koreans, Americans, Russians, and many others."
Jun 1st 2022
EXTRACTS: "Like Metternich, Kissinger commits the fatal error of believing that a few wise policymakers can impose their will on the world. Worse, he believes they can halt domestically generated change and the power of nationalism. Many years ago, this is what Senator William Fulbright termed the “arrogance of power.” This approach failed in Vietnam, Iraq, and Afghanistan. It is also doomed to fail in Russia and Ukraine." ------ "Not surprisingly, Kissinger misunderstands Russia. He appears to believe that, because Russia has been an “essential part of Europe” for over four centuries, it is therefore fated to remain so for the foreseeable future.The claim is completely at odds with history." ---- "Finally, Kissinger misunderstands the implications of his own analysis for Western relations with Russia. “We are facing,” he said, “a situation now where Russia could alienate itself completely from Europe and seek a permanent alliance elsewhere." ---- "But what’s so bad about Russia’s isolating itself from Europe and becoming a vassal state of China? "
Jun 1st 2022
EXTRACTS: "According to the latest figures from China’s National Bureau of Statistics, China’s population grew from 1.41212 billion to just 1.41260 billion in 2021 – a record low increase of just 480,000, a mere fraction of the annual growth of eight million or so common a decade ago." ----- "China’s total fertility rate (births per woman) was 2.6 in the late 1980s – well above the 2.1 needed to replace deaths. It has been between 1.6 and 1.7 since 1994, and slipped to 1.3 in 2020 and just 1.15 in 2021."
Jun 1st 2022
EXTRACTS: "Casualties are very high. A very conservative estimate of overall Russian losses is that they have lost more troops killed since February 24 than in ten years of fighting in Afghanistan. This implies well over 40,000 men taken out of the fight, including the wounded." ----- "Away from the cauldron of Donbas, Belarus has been rattling its somewhat rusty sabre by deploying troops to its border with Ukraine. This is unlikely to trouble Kyiv. The Belarus president, Alexander Lukashenko, is well aware that he may need them at home to shore up his shaky regime."
May 27th 2022
EXTRACTS: "Monetary policymakers are talking tough nowadays about fighting inflation to head off the risk of it spinning out of control. But that doesn’t mean they won’t eventually wimp out and allow the inflation rate to rise above target. Since hitting the target most likely requires a hard landing, they could end up raising rates and then getting cold feet once that scenario becomes more likely. Moreover, because there is so much private and public debt in the system (348% of GDP globally), interest-rate hikes could trigger a further sharp downturn in bond, stock, and credit markets, giving central banks yet another reason to backpedal." ----- "The historical evidence shows that a soft landing is highly improbable. That leaves either a hard landing and a return to lower inflation, or a stagflationary scenario. Either way, a recession in the next two years is likely."
May 26th 2022
EXTRACT: "No, I am not arguing that Powell needs to replicate Volcker’s tightening campaign. But if the Fed wishes to avoid a replay of the stagflation of the late 1970s and early 1980s, it needs to recognize the extraordinary gulf between Volcker’s 4.4% real interest rate and Powell’s -2.25%. It is delusional to believe that such a wildly accommodative policy trajectory can solve America’s worst inflation problem in a generation."
May 26th 2022
EXTRACT: "It will be critical in this context how China will act and whether it will prioritise its economic interests (continuing trade with Europe and the US) or current ideological preferences (an alliance with Russia that makes the world safe for autocracies)."
May 26th 2022
EXTRACT: "The document is full of embarrassing and damming stories of illegal gatherings and bad behaviour. There was “excessive alcohol consumption”, a regular fixture referred to as “wine time Fridays” and altercations between staff. Aides are shown to have left Downing Street after 4am (and not because they had worked into these early hours). Cleaning staff and junior aides were abused, and a Number 10 adviser is on record before the infamous “bring your own booze” party...."
May 17th 2022
EXTRACT: "But even a resounding Russian defeat is an ominous scenario. Yes, under such circumstances – and only such circumstances – Putin might be toppled in some kind of coup led by elements of Russia’s security apparatus. But the chances that this would produce a liberal democratic Russia that abandons Putin’s grand strategic designs are slim. More likely, Russia would be a rogue nuclear superpower ruled by military coup-makers with revanchist impulses. Germany after World War I comes to mind."
May 4th 2022
EXTRACT: ".....a remarkable transformation is taking place in Ukraine’s army amounting to its de facto military integration into Nato. As western equipment filters through to the frontline, Nato-standard weaponry and ammunition will be brought into Ukrainian service. This is of far higher quality than the mainly former Soviet weapons with which the Ukrainians have fought so capably. The longer this process continues and deepens, the worse the situation will be for the already inefficient Russian army and air force."
May 3rd 2022
EXTRACT: " The conventional wisdom among students of the Russian arts and sciences is that Russian culture is “great.” The problem is that, while there are surely great individuals within Russian culture, the culture as a whole cannot avoid responsibility for Putin and his regime’s crimes." ---- "Russianists will not be able to avoid examining themselves and their Russian cultural icons for harbingers of the present catastrophe. What does it mean that Fyodor Dostoevsky was a Russian chauvinist? That Nikolai Gogol and Anton Chekhov were Ukrainian? That Aleksandr Solzhenitsyn was an unvarnished imperialist? That Aleksandr Pushkin was a troubadour of Russian imperial greatness? May these writers still be read without one eye on the ongoing atrocities in Ukraine?"
Apr 29th 2022
EXTRACT: "The following day Lavrov met his Eritrean counterpart, Osman Saleh, in Moscow. Eritrea was the only African country to vote against the UN resolution condemning the invasion. In this refusal to condemn Russia, Eritrea was joined by only Belarus, North Korea and Syria. Even longstanding allies such as Cuba and China abstained. It’s an indication of Russia’s increasingly limited diplomatic options as this war continues."
Apr 24th 2022
EXTRACT: "Although the milestone lasted only for a brief time, it points to a future in which California runs on 100% wind, solar, hydro and batteries, a future that will certainly arrive even faster than the state plans. As it is, California is ahead of its green energy goals." ...... "A world of 100% green energy and electric cars is not only a healthier and more comfortable world, it is a world where oil and gas dictators like Vladimir Putin are defunded."
Apr 17th 2022
EXTRACT: "Kazakhstan’s authorities have also showed uncharacteristic leniency in allowing public rallies in support of Ukraine. Thousands of protesters holding banners reading “Russians, leave Ukraine”, “Long Live Ukraine” and “Bring Putin to trial” marched across the capital, Almaty, wrapping monuments to Lenin and other Soviet-era figures with yellow and blue balloons symbolising the Ukrainian flag."
Apr 15th 2022
EXTRACT: "People’s identification with the Soviet Union appears to have a clear and growing basis in Russian public opinion. Surveys we have conducted throughout the Putin period show that Soviet identification among the general population – something that had been steadily declining after the collapse of the Soviet Union in 1991 – began to increase in 2014, when the Russian government annexed Crimea and supported rebellions in the Ukrainian regions of Luhansk and Donetsk. By 2021, almost 50% of those surveyed identified with the Soviet Union rather than the Russian Federation."
Apr 13th 2022
EXTRACT: "Worse yet, the Hungarian government has effectively been helping Putin by prohibiting the shipment of weapons to Ukraine across its borders. Hungarian public TV spreads Russian disinformation day and night. The day before the election, an assembly of ordinary people expressing solidarity with Ukraine was framed on state television as a “pro-war rally.” "
Apr 13th 2022
EXTRACT: "It may well be that the Russian army’s fate has already been sealed in what is likely to be a long war. The single qualification to this may be that Russia could default to escalation using “weapons of mass destruction” of one form or another – whether tactical nuclear warheads or chemical weapons."