26 October 2022

Rishi Sunak’s ruthless streak should worry Labour

The new Prime Minister has shown he is willing to discard people and policies to secure his advancement.

Let’s start with that grizzled cynic Andrei Gromyko, the one-time Soviet foreign minister whose words about Mikhail Gorbachev back in 1985 have been ringing in my ears at Westminster this week: “Comrades, this man has a nice smile. But he has teeth of iron.”

Rishi Sunak has a nice smile too. He uses it a lot. But he wasn’t smiling during his first Downing Street statement, as he underlined the profound crisis ahead and his determination to fix Liz Truss’s mistakes: “I understand how difficult this moment is… I am not daunted.” And he showed, if not iron, a certain steeliness, promising “integrity, professionalism and accountability at every level”. If that wasn’t a direct swipe at Boris Johnson, I know nothing.

Along with Jeremy Hunt, Sunak is one of the most courteous and affable people in British politics. Some will ask, so what? But if the Johnson story taught us anything, it was that in the pressure-cooker of modern politics, temperament and personal behaviour really matter.

So, what about those iron teeth? Sunak is a numbers man, perfectly prepared to behave ruthlessly if he thinks that’s the way the political numbers point. Think of his spring statement in March, when he refused campaigners’ pleas to increase Universal Credit in line with inflation, then at 7 per cent. Not cuddly, nor centrist.

That same statement, by the way, is one way of measuring the economic mess he now inherits from Liz Truss. Back then, post-Putin’s invasion but pre-Kwarteng, the Office for Budget Responsibility was predicting growth next year of 1.8 per cent; earlier this month Goldman Sachs, the new Prime Minister’s former employer, was predicting a contraction of 1 per cent. If these seem like small numerical differences, they won’t feel that way.

Another measure of Sunak’s ferrous bite comes from his private confrontation with Johnson on the evening of 22 October at Millbank Tower near Westminster. Johnson tried very hard, using all the force of his personality and rhetoric, to persuade Sunak to give way to a Bozza-led “unity ticket”. Sunak, no doubt, smiled back nicely. But he didn’t give an inch. He had the numbers. The writer Ben Judah, who has profiled Sunak, tells me: “He has a spreadsheet mind.” This may seem a pedestrian quality, but it means that when he sees a story in those numbers, he feels a certainty that humanities graduates may lack.

The lesson for Labour seems obvious: to paint Sunak in Day-Glo colours as a hyper-rich, callous accountant who doesn’t understand a real Britain suffering from what next year will be, almost certainly, a recession.

But the story is less obvious. The new Prime Minister is certainly fabulously rich, with a fortune of around £730m – much richer in terms of personal wealth than, for instance, the King. In real terms he is the richest Prime Minister since Archibald Primrose, Earl of Rosebery, who took over from Gladstone in 1894 having married the Rothschild heiress Hannah.

Rosebery is only a useful precedent in demonstrating that great wealth doesn’t necessarily translate into political success. He once said that he had three ambitions in life: to win the Derby, to become prime minister and to marry an heiress, and had achieved all three. But trying to run the country as an anti-socialist liberal from the House of Lords proved impossible even in late Victorian Britain: his premiership was brief and unsuccessful.

Rishi Sunak, by contrast, is a modern Briton. He grew up helping his mother run her pharmacy in Southampton, cycling prescriptions round to customers; and, later, serving in an Indian restaurant. His family story is one of hard work and ambition. In his local Hindu temple they speak of him as a humble man, a quiet worshipper who mucks in.

It’s not clear that a political attack based on his later marriage to the daughter of an Indian tech tycoon will be effective. The politics of envy have never worked terribly well in Britain. Even Johnson’s ability to command huge fees for his writing and speaking was not what turned people against him – a shrugged “good luck to him” was a more normal response.

If the new PM, because of his heritage, has a hotline to the great rising power of modern India, and if he, because he knows the US financial and tech world from the inside, understands that other, already risen power, then for many people this will be an advantage.

Yet Sunak’s time in hedge funds, and his enthusiasm for California – reflected in his keeping a green card for longer than one might expect from a leading British politician – remain inevitable opposition attack lines. “Rich” might produce shrugs. “Out of touch” is slightly different. But here’s where it gets interesting. Sunak, with a close eye on his own polling, knows he achieved maximum popularity through his generous pandemic schemes. Among his first words as Prime Minister were: “You saw me during Covid doing everything I could… I will bring the same compassion to the challenges we face today.”

Here is a key question about Sunak as we try to get a handle on this new Prime Minister. Which has been the bigger professional influence on him? Has it been his years working for banks, hedge funds and inside the Treasury? Or has it been his early years of graft, and then the popular Covid-19 measures, such as Eat Out to Help Out in the summer of 2020? Trading floor or temple?

There is nothing theoretical about the question. As he struggles to fill the £40bn hole in the government finances (which is shrinking as the markets give a thumbs-up to the new administration), where will he try to cut, and where will he raise taxes? These are moral choices.

Making them may curtail any honeymoon period: that’s where the Labour critique must come. After the clownishness and yah-booery of recent years, let’s hope we are entering a period of more sober and honest political debate, about the real choices during this crisis, and then the rival strategies for growth afterwards. Then come the bigger issues, beyond growth: Sunak tells me he has strong environmental views, partly tutored by his daughters. Again, we shall see.

Keir Starmer has been chastising colleagues for taking Labour’s huge polling leads for granted. He is beginning to train the shadow cabinet for the realities of power. Soon, I’m afraid, his natural wariness will be vindicated. But if we now have two parties vying to balance difficult choices, both promising caution and fiscal rectitude, how does the opposition stand out? Where does the idealistic push come from? The old tunes about decency in office and responsibility, may now sound – well, simply old.

There are no shortcuts. Labour must double down on green growth, produce a much more detailed plan for raising educational standards and begin to flesh out a fairer taxation system. As argued here before, this is the time for an opening to Europe, the huge market on our doorstep, and for radical reform of our own political institutions. Starmer is now sounding, at last, like a steely leader with a good back-story. Him against Sunak tantalises: could we get a grown-up conversation about our future once more?

Labour will focus on the dozen years of relative Conservative economic failure and be alert to the nightmare of a second round of Tory austerity. Sunak, despite right-wing criticism that he is not a “proper Conservative”, was recently in favour of getting the basic rate of income tax down to 16p, albeit not until the next parliament. Politics will soon be as sharply divided as ever. Yet some of the personal poison, thank goodness, will be missing.

Or, at least, it may be missing in that traditional left-right argument. For Sunak’s victory has opened the door to a fresh mutation of hard-right conspiracy theory. Waiting by the gates of Downing Street to try to hear Truss’s resignation, I and other journalists were screamed at by a well-dressed, middle-aged man, his face contorted by hatred, who appeared to believe – from the few intelligible sounds making their way through the spittle, – that we were “the globalist conspiracy”. When asked what he meant, he wiggled his fingers as if dangling a puppet, and shouted “You know… international… bankers.” Ah, I replied, I do know what you mean – the Jews.

Now, one shouldn’t make too much of a short, unpleasant confrontation on the street. People who were invested in the Truss-Kwarteng assault on mathematics are understandably upset. Perhaps he had forgotten to short the pound. And in the heat of the moment, people say things they don’t really mean.

But beyond that incident the usual suspects, the conspiracist hacks, the political self-promoters hoping to replace the Tories from the right, are already pushing the line that Sunak is not a legitimate leader.

We know from the Trump era that conspiracist fantasies spread fast. So let’s be clear. In a parliamentary democracy, in which MPs choose their leaders, the elevation of Sunak was an entirely proper, legitimate and constitutional event. We don’t get general elections when parties change their leaders or policies. If we did, we’d never stop voting. We elect MPs normally every four or five years and if they fail to honour their manifesto promises, we get the chance to kick them out. That’s the system we’ve had throughout our democratic history. For all its flaws, it has allowed all parties to change tack as needed in office. It has kept extremists away from power.

Liz Truss fell not because shadowy forces from the international banking system decided that offering decent British folk tax cuts was unacceptable, or because the hedge funds wanted more immigration, but because market-makers looked at the sums and simply didn’t believe them. Boris Johnson’s comeback failed because he didn’t have the support of Tory MPs who couldn’t face more of that psychodrama. Rishi Sunak has a nice smile. He was a banker, and his family did come from India. It’s still a Conservative government. The choices ahead are no easier. If he does have iron teeth, he’s going to need them.