How Will The New PM Rishi Sunak Affect You?

The UK saw the confirmation of its 57th Prime Minister on Monday 24th October 2022. The Rt Hon Rishi Sunak won the Conservative leadership election and is now Prime Minister. His predecessor, Liz Truss, resigned on 20th October after 45 days in office, the shortest period of any Prime Minister. After an expected turnout for the leadership by previous PM, Boris Johnson, Sunak was left uncontested as Sir Graham Brady announced the news. The other candidate, Penny Mourdant, pulled out before the 2PM deadline due to not receiving enough votes from MPs.

After a circus merry-go-round within the party over the past few weeks, it follows the third PM this year alone. Many would hope a degree of unity and calmness will ensue from now, with a cost-of-living crisis to contend with. Many of the public however, believe a general election is imperative following the fourth unelected leader in 6 years.

There’s arguably no tougher time than present than to take the helm of the nation as Sunak begins his tenure. We break down what to expect from the new PM, his priorities in terms of focus, and its impact…

Cost Of Living Crisis

The immediate topic of discussion and focus for Sunak will no doubt be the cost of living crisis. As the rate of inflation remains a record high, the cost of household goods have risen. This means that likely a huge number of the public will be forced into poverty. There’s also the cost of gas and electricity spiking, as many will be forced to choose between eating and heating this winter. During the July leadership contest, Sunak stated he was prepared to tell hard truths about public finances. His public disapproval of Truss’ unfunded tax cuts proved to be correct.

Usually unenthusiastic on spending commitments, Sunak will likely be on board with the spending cuts of the Chancellor, Jeremy Hunt. This also means the tax U-turns issued by the Chancellor last week will remain. This includes the NI rise scrapping, which Sunak brought in whilst he was Chancellor. The PM will be working tirelessly with the Chancellor ahead of the Medium Term Fiscal Plan on 31st October 2022.

Forming A Cabinet

One of the main talking points of any incoming PM is who makes up the cabinet. It’s been confirmed that the Chancellor, Jeremy Hunt, will remain in his role. Since taking over in Number 11, Hunt has been welcomed by the Tory party, as well as the financial markets.

Foreign Secretary is one of the main big positions which was a contentious role up for grabs. Penny Mourdant and Tom Tugendhat, were said to be within the mix, however James Cleverly has been reappointed. He is the first Liz Truss loyalist to stay in post under the new PM.

The Home Secretary position is also a contentious position, with Suella Braverman resigning under headline-making circumstances last week. Despite many news outlets stating she was unlikely to be reappointed, Sunak has chosen to stick with her. Braverman has taken a tough stance on immigration, previously saying it was her ‘dream’ to see Rwanda deportation flights take off.

Of the other high-profile positions up for grabs, Dominic Raab is awarded the Deputy PM position. Ben Wallace will also continue his role as Defence Secretary, whilst Penny Moudant continues her role as Commons Leader.

Tackling The NHS & Social Care Backlog

Another major point of focus in the PM’s in-tray will be the NHS and Social Care backlog. With record waiting periods in A&E departments, as well as not properly recovering from the damage that COVID did infrastructurally, this pressing issue shows no sign of decreasing in intensity. During the July leadership election, Sunak proposed bringing in a £10 penalty for missing appointments as part of efforts to tackle the NHS backlog. He also ensured a ‘backlogs taskforce’ to strategise the number of overseas doctors and nurses brought in to work in the NHS. Whether these will remains to be seen.

Mr Sunak will have a challenge on his hands with the introduction of the new social care system from October 2023. This is intended to make sure that nobody exceeds £86,000 for the personal care they need, amidst an ageing population and rising demand. An expected spike in COVID and flu patients this winter will need Sunak’s urgent attention.

Winning Over The Public

As mentioned, the calls for a general election are huge. With opposition parties united in seeking a general election, much of the general public are tired with the current regime. The Conservatives have been in charge for over 12 years, with the quality of living arguably stagnant. As well as this, the opinion polls look very unfavourably for the Tories. Labour on average hold a 25+ point lead across ten polls, signalling the public disapproval.

Mr Sunak will have his hands full in trying to make the Conservatives look more favourably to voters. Unless an earlier one is called, the next election isn’t due until January 2025. This is a fair amount of time for Sunak to turn things around, yet many believe the challenge is insurmountable. There will be huge growing calls from opposition MPs, as well as the media, to call for a general election however Tories will be understandably reluctant to do so. Sunak will have to get to grips with the enormous job at hand, and fast.

We will be touching upon heavily many of the issues at hand for the new PM and the impact on the UK public, in our upcoming webinar on Thursday 27th October at 12:30PM. It would give us great pleasure for you to join the discussion on the economy, and how businesses can navigate the tough times ahead.

We hope this has outlined to you what to expect with the new Prime Minister, Rishi Sunak. If you’d like to know any further information on anything mentioned, or anything accounting related for that matter, please do not hesitate to get in contact with us at Nordens, where one of our trusted advisors would be happy talking you through your query.