The hard work is only beginning for the UK prime minister.
(Bloomberg) — Prime Minister Rishi Sunak addressed a gala dinner of his Conservatives on Wednesday night, attempting to reassure his unsettled party that he can improve their electoral prospects.
The Tories sit around 20 points behind in most polls and are facing what most strategists expect to be a general election defeat next year. Still, Sunak marked his first 100 days in office by speaking at a glitzy event celebrating 100 years of the backbench 1922 Committee — underlining that while prime ministers come and go, it’s rank-and-file Conservative MPs that ultimately hire and fire party leaders.
Just over three months into his tenure, Westminster’s bars and WhatsApp group chats are already alive with discussion about how the prime minister is doing. Ahead of the black tie party at a private members’ club in west London, Tory MPs and business leaders privately assessed Sunak’s performance so far — and where he needs to change.
The Economy: Running Out of Time?
The economy was Sunak’s number one priority after seven weeks of chaos under Liz Truss. His calm demeanor, plus the decision to keep Jeremy Hunt in post as chancellor, quickly reassured investors and Tory MPs. Financial-market upheaval stopped, but public sentiment on the economy has barely shifted.
The International Monetary Fund now forecasts that Britain faces the bleakest two years of any major industrial nation, meaning that Sunak has got his work cut out to prove that the Tories can be trusted with the economy. In a speech at the start of the new year Sunak pledged to halve inflation, boost growth and reduce the national debt.
Inflation is expected to fall and that may benefit the prime minister, some Tory MPs say. But some ultimately believe tax cuts are the only way to boost sluggish growth — and improve their election prospects.
Expect: Further calls for tax cuts, criticism of the government’s lack of industrial strategy to boost growth, calls for a cut in fuel duty.
Verdict: Now comes the hard bit.
Sunak’s Scandals: Of Bullies and Book-keeping
Sunak argues that he’s still dealing with mistakes made by his predecessors, and is focusing on restoring integrity at the heart of government. But he faced criticism from within for not immediately firing Tory Chairman Nadhim Zahawi over his tax affairs, then doing it anyway once a report cleared the way. Allegations of bullying by Deputy Prime Minister and Justice Secretary Dominic Raab have been under investigation since November. And Sunak himself was fined by police for not wearing a seat belt in a moving car.
That’s not all. Sunak gave a cabinet job to twice-sacked Gavin Williamson, only for Williamson to resign after complaints of bullying, and using “unethical and immoral” methods when he was chief whip. Sunak also brought back Suella Braverman as home secretary just six days after she was forced to quit for security breaches that violated the ministerial code.
Expect: Sunak to face more calls to act decisively over ethics breaches. Also expect exasperation if he makes any more unforced errors.
Verdict: Three months in, Sunak is being compared to John Major, who did win an election in 1992 but was then dogged by scandal and ultimately lost to a Labour landslide in 1997.
Brexit: Will the Nightmare Return?
The current prime minister is under pressure to sort out the impasse in Northern Ireland. The region has been without a functioning government for nearly a year — not the right look before what’s hoped to be a visit by US President Joe Biden at Easter to mark the anniversary of the 25 years since the signing of the Good Friday Agreement.
The standoff is linked to Brexit, with the Democratic Unionist Party refusing to resume power-sharing with Irish nationalists in protest against the sea border created by the 2020 Brexit agreement. Unionists argue the policy — which requires checks on goods brought into Northern Ireland from the rest of Britain — undermines its position within the UK. Meanwhile, Brexit purists in Sunak’s Tory Party are on the lookout for any hint that a compromise deal — reported to be close — would leave the European Court of Justice with any lingering role in arbitrating disputes about UK territory.
Expect: A flurry of last-minute diplomacy between Sunak and EU negotiators, while domestic critics stand ready to say Sunak has sold out.
Verdict: Brexit is unlikely to sink another PM, but it could easily reopen old party wounds.
Party Mood: The Ghost of Boris Johnson
Never ones to be grateful for long, MPs’ relief at Truss’s departure has morphed into boredom and inertia. One Cabinet minister described the mood as “meh.” Another expressed surprise that despite his youth and vigor, Sunak is not leading a more energetic government.
Lurking in the background is Boris Johnson, who some in the party still think is their best chance to reach non-traditional Tory voters and win the next general election. There is bad blood between the two men after Sunak’s resignation precipitated Johnson’s downfall. Johnson, currently on a money-making, whirlwind tour of the globe, is not exactly making life easy for Sunak, regularly presenting himself as Ukraine’s no. 1 ally and criticizing Sunak’s foreign policy.
Expect: Johnson’s televised appearance before Parliament’s Privileges Committee in March over lockdown parties to stir up more speculation about the former prime minister’s future prospects.
Verdict: Boredom can be dangerous — and so can Tory MPs.
Polling: Voters Sharpen Their Pencils
Sunak has his critics, but his personal popularity rating is higher than his party’s even if it is in decline. That won’t stop the prime minister getting the blame for what is expected to be a poor showing at local elections in May. This late in an electoral cycle, the governing party is bound to get a thrashing from voters. However, tactical voting could mean results are even worse than most Tories imagine, according to polling expert Professor John Curtice.
Expect: Poor electoral results lead to a moment of danger for Sunak as Tory critics see it as the last window to change party leader before the general election.
Verdict: If the economy is recovering, will Tory MPs forgive Sunak poor election results?
Strikes: Tipping Point or Compromise?
On Wednesday almost half a million British workers went on strike demanding pay rises that do more to combat the cost-of-living crisis. Industrial relations are at their most fractious since the 1980s, with the UK having lost more than a million working days to strikes last year.
Sunak has tried to link the industrial unrest to union funding for Keir Starmer’s Labour Party — but polls show that the public does not really buy into that argument. Surveys also show voters are largely supportive of pay demands by public sector workers. And even a drop in inflation won’t be enough to satisfy unions who say workers have been underpaid for years.
Expect: Industrial action to carry on into the summer as the government looks at next year’s demands for pay rises.
Verdict: Sunak has flatly refused to raise taxes to end strikes by NHS workers — and the public broadly supports their cause. Something will have to give.
Business Warns: ‘Open the Spigots’
Sunak is under increasing pressure to spell out further his plans for growth, which will include a series of investment zones. Businesses are also crying out for measures to reduce the skills shortage.
Martin Sorrell, the founder and executive chairman of advertising group S4 Capital, said Sunak should “open up the spigots” with tax cuts in the spring 2024 budget ahead of an election that autumn. “Question is, does he have enough time to execute the strategy?” Sorrell said.
Stephen Phipson, chief executive of manufacturing group Make UK, said some “big picture issues” are hurting investment — and require a long-term industrial strategy. “Manufacturers will be looking to the prime minister to set out such as strategy as a matter of urgency,” Phipson said.
What to expect: Pressure to provide more detail on investment zones, further plans to boost life sciences, and an increasing clamor from business for tax incentives, including a permanent 130% super-deduction.
Verdict: March’s budget will need to be creative if there is no money to be spent.
–With assistance from Sabah Meddings.
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