Liz Truss took office last month as British prime minister, but her tenure lasted only 45 days, damaged by economic policies that roiled financial markets and turmoil within her own Conservative Party.
“One of the things you can say about Liz Truss is that she makes quick decisions,” said political scientist Brendan O’Leary in an interview last week with Wharton Business Daily.
Now that Rishi Sunak has been named prime minister, Penn Today talked with O’Leary to get his take on where things go from here.
Where do Rishi Sunak and the Conservative Party stand now in the U.K.?
He has just over two years to stop the bleeding of support for his party and to improve its electoral standing. A U.K. general election must be held by January 2025. Upon nomination, Sunak privately promised the Conservative parliamentary party that he would not call an early general election. His party remains deeply divided. Boris Johnson was a ‘big government’ Tory; Truss was a small state libertarian; Sunak stands for fiscal prudence and fixing the messes left behind by his predecessors. Some in his party want more immigration; some want less. Some want big infrastructure spending; some want to strangle the state. It is a party of unhappy bedfellows, a pack of ferrets fighting in the sack they created for themselves known as ‘Brexit.’
Sunak is the third Conservative prime minister in three years and the fifth Conservative prime minister in six years, and he lost the first race to succeed Johnson just six weeks ago. Italian politics currently looks more stable. It may seem premature to declare this prediction, but I think his prospects of presiding over a fifth consecutive Conservative term in office are almost zero.
According to data at yougov.com, which tracks polls from Great Britain since 2019—Northern Ireland is excluded because its party system is distinct and pollsters don’t regard it as part of British politics—the Tories have reached unknown levels of disapproval—less than 15% support in one recent poll. Labour currently enjoys at least a 30-point lead over the Tories. No such midterm lead has ever been reversed by an incumbent government. The best Sunak can hope for is a sufficient revival to confine Labour to being the largest party, and in need of a coalition partner. All parties, however, including the Liberal Democrats, will be running against the Tories.
‘I have tidied up my colleagues’ tanking of the currency, the government’s credit rating, and the housing and pension markets,’ is not an exciting prospectus on which to run in the winter of 2024. The Labour Party is now run by a competent lawyer and former prosecutor, Keir Starmer, and he will have an easy case before the jurors of electors. We will see if Sunak is lucky enough to enjoy a brief honeymoon. Truss did not get one.
Aside from stabilizing the hemorrhaging of electoral support from his party, Sunak has two immediate international tasks, aside from supporting the western alliance with Ukraine against Putin. Against the prevalent instincts among his MPs, and perhaps his own, he must repair relations with the European Union, still the U.K.’s largest trading partner. And he must repair U.K. relations with the Biden administration. The easiest way to do that is to eat humble pie on the Ireland-Northern Ireland Protocol, abide by international law, and allow a reset. Listen for claims of negotiating successes as the humble pie is politely digested without British beef to accompany it.
You mentioned in the Wharton interview that any leader would have a legitimacy deficit since they don’t have a mandate from the electorate. What will that look like for Sunak?
In a parliamentary system, the mandate is won by the winning party, not by the prime minister. Truss had no mandate for the brief experiment in fantasy macroeconomics. Sunak claims he will follow the 2019 manifesto, but it remains to be seen what that will mean. Sunak did not win among the party membership in the summer, though he did win a majority of Conservative MPs. Whether he has just won after a bargain with the right-wing Suella Braverman, whose distinct aspiration is to see all illegal immigrants flown to Rwanda, is as yet unproven. In his first Prime Minister’s Questions session in the House of Commons, Sunak avoided answering Starmer's question on whether the prime minister had received advice from officials not to appoint her; Truss had sacked Braverman for breaking the ministerial code.
Very shortly, Boris Johnson is likely to be indicted by the Privileges Committee for lying to parliament, and the committee is likely to impose sanctions, which may include a by-election, a special election, in Johnson’s constituency. Sunak would then have to decide whether to let Johnson run under the Conservative brand. In short, it is going to be very difficult for Sunak to preserve a reputation for integrity without outright combat within his party. If Johnson were to retire in disgrace that would suit Sunak, but Johnson doesn’t do much shame or repentance.
What do you take from Sunak’s decision to delay an economic strategy announcement planned for Monday until Nov. 17?
I think he and the new chancellor have to agree on policy. Sunak was a very hands-on chancellor and will want to review Jeremy Hunt’s plans. The currency markets and the gilt markets have calmed after the departure of Truss and the failed resurrection of Boris Johnson. A little improvement in the mortgage rate and the bond markets may make the political economy of borrowing more money a mite easier than it would have been under Truss. Postponing the fiscal statement makes sense, but it has side costs. The Bank of England may raise interest rates in the interim; indeed, it is expected to do so because of the pace of inflation. The new government has to show that it is intent on balancing its books. How it does that without tax rises or significant cuts in public expenditure is not easy to see. Austerity is rarely popular, and a man married to one of the richest women in the world, whose tax-status was ‘non-domiciled’ until very recently, will find it particularly hard to impose austerity. Rich Rishi will have to tax the rich.
What is the most important thing to understand about what’s happening now in the U.K.?
Brexit is devouring the political children who promoted it and who came to power under its auspices. You don’t make an advanced economy richer by cutting it off from its major trading partner. You don’t advance your global standing by breaking international treaties and trying to bully Ireland—and failing. The U.K.’s low productivity, low skills, and low growth are rooted in an inadequate, antiquated, and class-biased education system, especially in England, not in regulations issued from Brussels. And, it needs to be said, the U.K. is on the verge of break-up. Either Northern Ireland or Scotland or both will leave the United Kingdom ‘ere long, and fair-minded historians will place the blame where it belongs, on Brexiteering Tories, drunk on nostalgia and libertarian economics.
