The Challenges Facing Rishi Sunak As He Takes Over From Liz Truss

The former chancellor may have had an easy coronation, but he inherits a series of problems that will make his job very difficult.
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Rishi Sunak today told Tory MPs that the party "must unite...or die".
JUSTIN TALLIS via Getty Images

Tory MPs have just chosen Rishi Sunak as the UK’s next prime minister following the disastrously short-lived tenure of Liz Truss.

Sunak will be the UK’s first Hindu prime minister, the first of Asian heritage and the youngest for more than 200 years, at the age of 42.

Sunak was elected without a vote of the Tory Party membership after Penny Mordaunt dropped out at the last minute.

His coronation represents a remarkable comeback for the former chancellor, who was rejected by members in the last leadership race just six weeks ago.

But as Sunak is about to find out, the issues that dogged Truss are not about to go away any time soon.

Here are the main challenges awaiting Sunak as he prepares to become prime minister.

Struggling UK Economy

The UK’s finances were already under strain before Truss became prime minister, but his predecessor’s policies served to make a bad situation worse.

Inflation is at a 40-year high of 10.1 per cent and — as Truss repeatedly liked to point out — growth has been slowing.

Truss inherited these problems but her mini-budget created a host of new ones.

The £45billion tax cuts bonanza spooked the markets and led to a fall in the value of the pound while also accelerating the rise in interest rates. The average mortgage rate now stands at 7.32%, up from around 4.74% before the mini-budget.

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Liz Truss looks on as Jeremy Hunt rips up the core aspects of the mini-budget.
House of Commons - PA Images via Getty Images

The market’s reaction prompted Jeremy Hunt to rip up the core aspects of the mini-budget when he was appointed by Truss as chancellor.

Sunak now has to come up with an economic blueprint that will reassure the markets.

That is likely to mean higher taxes and lower public spending — a hard sell during the worst cost of living crisis the country has seen in decades.

Cost Of Living Crisis

When Truss became prime minister, she unveiled an energy package that limits the price households pay per unit of gas and electricity.

Truss said this meant that the average household would not pay more than £2,500 a year for their energy over a two-year period.

However, she was forced to dial down the support so that it only covers the next six months.

Sunak will be under pressure to keep up support for families as the winter edges closer.

Tory Civil War

While Sunak secured the support of more than half the Conservative parliamentary party, not everyone was on board the Rishi train.

Allies of Boris Johnson, who pulled out of the race last night, still blame Sunak for precipitating his downfall with his decision to resign as chancellor.

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Boris Johnson withdrew from the Tory leadership race after he concluded that standing again "would simply not be the right thing to do".
Dan Kitwood via Getty Images

They could make life difficult for the new PM by voting against major pieces of legislation.

A number of Tory MPs are also angry at the manner in which Sunak was elected. 

Some believe that members have been denied a real say because the threshold for getting on to the ballot was so high, at 100 MPs. Sunak was effectively chosen by the parliamentary party and not by members.

Demands For A General Election

Labour and other opposition parties are demanding a general election, arguing that the mandate the Tories won in the 2019 general election has expired.

Labour’s deputy leader Angela Rayner said: “The Tories have crowned Rishi Sunak as prime minister without him saying a single word about how he would run the country and without anyone having the chance to vote.

“Rishi Sunak has no mandate and no idea what working people need. We need a general election so the public get a say on the future of Britain – and the chance for a fresh start with Labour.”

And it is not just Sunak’s opponents who are issuing calls for a general election.

Some Tory members have quit the party in protest at being denied a say in the leadership race.

Samuel Jukes, a retail worker from Birmingham who joined the Tories in 2019 and supported Johnson in the contest, said a general election should now be called as Sunak had “no mandate”.

“I’m fuming right now, we never voted for Rishi Sunak,” the 33-year-old told the PA news agency.

And Christopher Chope, the Conservative MP for Christchurch, also called for a general election, saying the party was now “ungovernable”.

“The party is ungovernable in the House of Commons and so we’re going to have continuing rebellions as we try to change policies and so on,” he said.

“I’m very pessimistic, I’m very angry, and I feel that Boris has been let down once again and undermined by our parliamentary colleagues.”

Strikes

Frustrated by the rising cost of living and pay offers that do not keep pace with inflation, workers have been striking until the government gives them an offer they can accept.

The strikes are set to intensify this winter, with teachers, nurses and postal workers all set to walk out.

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There have already been a series of damaging strikes on the rail network throughout this year.
Martin Pope via Getty Images

Sunak’s party will demand that he takes a tough line against the unions — but any push to limit the right to strike will be met with fierce resistance by the trade union movement, which risks prolonging the industrial action and alienating the public further.

Ukraine War

A positive legacy Johnson does leave behind is the support the UK has given to Ukraine as it defends itself from Russian aggression.

Sunak will be under pressure to keep up that support as Vladimir Putin resorts to increasingly barbaric tactics, targeting more civil infrastructure and city centres.

The risk of nuclear escalation is growing more intense after the Russian president gave a number of speeches.

In one, he said that Russia “has various weapons of destruction and with regards to certain components they’re even more modern than NATO ones”.

“If there is a threat to the territorial integrity of our country, and for protecting our people, we will certainly use all the means available to us – and I’m not bluffing.”