The Gryphon takes a look at the UK’s new Chancellor of the Exchequer Rishi Sunak, after Sajid Javid resigned during the Prime Minister’s cabinet reshuffle.
In the run up to the General Election just a few months ago, Rishi Sunak stood in for Boris Johnson in both the BBC’s and ITV’s seven-way debates between all of the main political parties.
At the time, Mr Sunak was Chief Secretary to the Treasury, a position he had held for only a few months prior to the debate, having only become an MP in 2015. But Rishi Sunak is seen by many to be a rising star in the conservative party, and one that is clearly liked by Boris Johnson.
Having supported Brexit from the start, voted against a second referendum and in support of both Teresa May’s and Boris Johnson’s deals, he has an attractive record to the Prime Minister, who has been looking to build a cabinet that will have the enthusiasm to “get Brexit done”.
However for someone with relatively little ministerial experience, it is perhaps still surprising that he has landed what is arguably the second-most important job in the country, Chancellor of the Exchequer.
So who is Rishi Sunak? Well, by his own admission he is “living proof that this is a welcoming, meritocratic and tolerant country”, although not everyone might agree with this statement.
Mr Sunak studied PPE at Oxford, perhaps the most exclusive and yet typical route for aspiring British political leaders.
Before Oxford, he studied at the highly exclusive Winchester College Independent School, where yearly fees are £14,000, before going on to Stanford to complete an MBA.
After finishing his studies, he went to work for investment bank Goldman Sachs and other hedge funds, working his way up to the title of Partner at the Children’s Investment Fund Management.
Sunak has also been the director of Catamaran Ventures, another investment firm, owned by his father in law, billionaire Indian businessman N. R. Narayana Murthy.
One would therefore be forgiven for thinking that there is little difference between Mr Sunak and the men who have preceded him in recent years.
He is from a privileged and wealthy background, where doors will likely have been opened for him throughout his career. However, that is not to say that these doors would not just as quickly shut in his face if he did not have what it takes to make it as a top politician.
Rishi Sunak is a reliable and confident speaker, which bodes well for the budget he is due to announ in just a few weeks’ time on 11th March.
This will be his first real test, particularly as the Prime Minister has been under scrutiny lately over the announcement of further major spending plans, such as giving HS2 the green light and proposing the construction of a bridge between Scotland and Northern Island. For the meantime, it seems unlikely that he will face opposition from any conservative backbenchers.
Indeed, Rishi Sunak seems to be attracting praise from all over the Conservative party, with the former Chancellor Sajid Javid tweeting that “the force is strong with young Sunak”.
What to expect from the Budget
Reflecting back on the election campaign, you may remember that Boris Johnson ran on a manifesto that looked to spend a lot more than any Conservative government in recent times. BBC political show host Andrew Marr put it to Mr Johnson that he was in fact running on a socialist manifesto, with large spending increases in police and healthcare, as well as cuts to National Insurance contributions.
It is now time to see the detail of these policies, in which many have been lacking. This makes the March 2020 budget less dull than usual, as it will be a true indicator of the Government’s fiscal intentions for the next 5 years.
It is expected that there may be announcements of major investment in the North, as the Conservatives look to reward those who dropped their labour loyalty and came out to vote Tory in the last election. Many hope that this investment in the North may be accompanied by redistributive tax changes, reducing the wealth gap between the South East and the rest of the UK.
However Boris Johnson has made it clear that he no longer supports a wealth tax, otherwise known as the ‘mansion tax’ that was proposed by former chancellor Sajid Javid and would have been levied on the most expensive properties in the UK, mostly found in the South.
The Conservative Party election manifesto pledged to increase the threshold for paying National Insurance, which would affect around 30 million workers, earning over £12,600 with a saving of £100 per year. This is likely to be confirmed in the budget, as it is one of the few policies that had been clearly and unambiguously set out in the manifesto.
Other spending plans such as that on social care remain uncertain.
The Queen’s Speech in December came with promises of an extra £1bn of funding for councils to spend on social care, in order to ensure that “no one who needs care has to sell their home to pay for it”, but it is yet to be seen how this will be costed and whether there may need to be a rise in council tax to make this policy feasible.
At a time where environmental issues have come to the forefront of politics and policy making, many will be hoping that this will be the budget in which the Government announces large scale investments in green technology.
Boris Johnson won the election at a time of heightened environmental activism, yet the Tory party rarely focused on the environment in the same way that some of the other parties did, having famously not turned up the Channel 4’s environment debate.
Concerned environmentalists will be hoping that they are not ignored in this budget, as with such a strong majority in parliament and another 5 years of this Conservative government, this budget should be a much better indicator of changes that are to come.