Rishi Sunak has managed to last 200 days as UK prime minister. That is four times as long as his predecessor Liz Truss. But the fragility of the party that he leads is such that knives are out on the back benches. In a way, it has nothing to do with him. No matter how well he performs, the Conservative party is in the throes of a nervous breakdown. You do not have to take my word for it. There are telltale signs.
The first sign is the loss of seats and councils at the local elections on 4 May. Normally, the party in power always loses seats. The test is how many and how badly. Not being a seasoned politician, Sunak ventured a prediction which proved somewhat optimistic – or rather not pessimistic enough. A seasoned operator would have sounded much gloomier, predicting a big loss and then hailing the actual loss as a triumph.
Divisions over Brexit
Given the record of the 2019 Tory government, which has already had three prime ministers (five since 2015), the deep malaise of the UK’s oldest party is obvious. You can see it in the recent put-down of Kemi Badenoch, secretary of state for business, energy and industrial strategy, by the speaker in the House of Commons. This has to do with the inner party warfare continuing from the UK’s departure from the European Union.
During the party leadership contest in July and August, Sunak made a promise to cancel all legislation which had come from the EU. Wiser counsels have prevailed and the Retained EU Law (Revocation and Reform) Bill has been watered down. So now a restricted list is being piloted through. That has led to anger and cries of betrayal from the Brexiteers on the Tory back benches. The party is deeply divided even now on Brexit and Sunak is being accused of abandoning his anti-EU stance.
The problem is that issues which look clear cut from the back benches begin to look complex from the prime minister’s perspective. Cancelling all EU legislation may not look as attractive from the front bench as it does from the back.
Inflation persists
But Sunak also needs to deliver on issues such as inflation. H has promised to reduce inflation to half of its current rate and then possibly introduce a tax cut, just like Margaret Thatcher’s government. But that is misreading the history of the Thatcher era.
In the 20-year period from 1970-90, when we had a parallel situation of high inflation, Thatcher did not try to try to win votes with promises of tax cuts. The monetarist experiment was a failure as money supply was difficult to control. It was the capitalists taking their industries to Asia to find cheap labour and lower prices of imported manufacturing goods which brought down inflation. Then, after eight years in power, Thatcher allowed Chancellor of the Exchequer Nigel Lawson to cut income tax.
What this proved is that, while central banks and monetarists thought of inflation in a closed economy macroeconomic framework, the cause as well as cure pointed towards an open economy. Neither central banks nor Sunak have realised this. The chances of successfully bringing down inflation by the BoE increasing interest rates are slim.
Brexit has failed to restore prosperity or relieve the crisis of immigration, which is still haunting the Tories and Home Secretary Suella Braverman. The anger has now turned towards the House of Lords, which amends the bad legislation sent from the Commons. There is talk of removing the House of Lords. If that happens, it will be the radical right fulfilling the dreams of the radical left.
The convergence of the two extremes indicates that the malaise goes very deep. Sunak has become prime minister at an historic moment of nervous breakdown in the UK. The coronation of King Charles III brought a welcome distraction. But even there, Penny Mordaunt, Sunak’s leadership rival, stole the show and pointed out that she is ready to take over the job.
Meghnad Desai is Emeritus Professor of Economics at the London School of Economics and Political Science, Chair of the OMFIF Advisory Council and Crossbench Peer in the House of Lords. He resigned from the Labour party in 2020 after 49 years of membership.
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