I posted this thread on Twitter this morning:
Rishi Sunak could be a great prime minister. That possibility cannot be denied. Equally, the probability that he will be is very small. A thread…
History does not suggest that many prime ministers appointed mid-term with their predecessor having failed turn out to be great. Sunak has two failed predecessors. That's really not good.
That Sunak is petrified of the role he is taking on does not help. How do I know he is petrified? First, he spoke to no one during this campaign, not even MPs. Second, his speech to Tories at their HQ yesterday was as wooden as anything Truss has done. He is already overwhelmed.
Third, the issues he has to address justify his feeling overwhelmed, given the near impossibility of appeasing his backbenchers on almost any of them. They could all be solved, but not by a Tory.
They include:
- Brexit, which does not and never will work.
- Division over Northern Ireland.
- Scotland wishing to leave the Union, to which Tories have no answer.
- Covid, which is crippling the NHS with more cases than ever.
- No progress on climate change.
Then there is:
- Inflation, which is not caused by wage demands, meaning what the government and Bank of England are seeking to do by raising interest rates is the wrong solution to the problem we face.
- Strikes, because people need inflation matching pay rises to survive.
Top that with:
- A cost of living crisis, which inflation policy is not addressing.
- Officially encouraged interest rate rises that massively increase the scale of the cost of living crisis. Millions of British people face poverty and even financial destitution as a result.
It's fair in that case to assume we will have:
- An increase in homelessness as people cannot pay their rents or mortgages.
- Overwhelmed food banks.
- Hungry children, who might be homeless too.
Mix into all this:
- The fact that vast numbers of small businesses are in deep trouble because of interest rate increases and because people who can't pay their mortgages or rent have nothing left to spend on anything else.
- Unemployment is going to increase as a result.
Then note the problems for a man wanting to balance the government budget:
- Record NHS waiting lists.
- A failing court system.
- Social care beyond breaking.
- Education stretched to its limits.
- Increased defence demand.
- An alienated civil service.
Nothing can be cut.
Sunak's own policies are only likely to make this worse:
- Unemployment is forecast to increase significantly by the Bank of England.
- Universal credit costs will rise.
- Falling real wage increases push up benefit claims.
- Increasing rents require more benefit payments.
The current cost of living crisis will also cut some tax revenues in real terms.
- Rents, mortgages and food will be a bigger party of spending. None have VAT on them.
- Energy has low VAT.
- Companies not making profits don't pay tax.
- Nor do most unemployed people.
Sunak won't be balancing any books any time soon then. But he has to:
- Keep markets happy because that is apparently his main job.
- Fill a supposed ‘black hole' in government finances without creating new money, which he did during the Covid era.
Sunak has to succeed despite these constraints:
- Crazy demands from across the Tory party, that are irreconcilable.
- Demands for balanced budgets that are exactly the wrong economic policy for this moment.
- A kamikaze Bank of England intent on crashing the economy.
There are policies Sunak could use to address the issues he faces. He could:
- Use QE to fund spending to address the cost of living and continuing Covid crises, quite legitimately.
- Tell the Bank of England to hold or even cut interest rates.
He could also:
- Massively reduce the interest paid by the government to banks in their funds held at the Bank of England.
- Change the rules on ISA and pension saving to provide funding for a £100 billion a year Green New Deal to deliver sustainability and beat recession.
And he could:
- Give the public services and their staff the funding it needs.
- Pay public sector employees inflation matching pay rises to stop them leaving, for good.
- Raise taxes on energy companies, banks and the wealthiest to pay for this, with ease.
But the Tories won't let Sunak do these things. They will instead demand the impossible from him. Markets might do the same. His inability to challenge the madness at the Bank of England will undermine him. His own lack of a mandate is fatal.
Sunak could not have been better set up to fail by anyone. And I suspect he will fail. But that is not because this country's problems cannot be solved. They can be, but not by a Tory constrained by that party whilst he is in awe of markets and the Bank of England.
Sunak's task is impossible because of the constraints imposed on him and those he has chosen. And we will all pay an enormous price for that.
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A great summary.
And the stuff of tragedy in the sense that there is a better way but it is rejected.
Those whom the gods wish to destroy, they first make mad.
So in essence we’re fucked. Even if we had a GE Labour aren’t giving any indications they would do anything better to solve the issues we face.
We need to keep opposing
Ultimately we do have the power, but it takes time….
A further relevant consideration would be whether or not we have the time in the light of a substantial evidence of system wide collapse as a direct result of the failed model and it orthodoxy pursued by all UK political party’s?
https://bylinetimes.com/2022/10/14/britain-is-sleepwalking-into-societal-collapse/
Sorry, I know this is off- thread but Global Justice has a petition at the moment to protest the deregulation of banks under The Financial Services and Markets Bill. If this bill passes it will allow banks to take the sort of risks that led to the 2008 meltdown
Do you have a link?
[…] Murphy has an interesting blog today. Richard concedes that Sunak could be a great Prime Minister but that he probably won’t […]
Given that our early life defines a large part of the way we think and behave as adults I think it is worth considering Rishi Sunak’s life before he became an MP.
He was educated at Winchester, Oxford and in America, it is extremely unlikely that Rishi knows much about the people and the Country he is ruling.
He worked for Goldman Sachs. Even fellow Tory MPs found his “Masters of the Universe” syndrome hard to take.
He was a passionate schoolboy Brexiteer. As William Hague demonstrated, schoolboy enthusiasm for Far-right ideas is a good marker for adult weirdness.
All religions are by definition irrational, but Rishi has grown up in a faith where the caste system is still a significant part of the cultural outlook, as is reincarnation where your present circumstances are seen as being punishment for sins or reward for good behaviour in your past lives.
The only consolation is to remember the Tory alternatives
I’m going to be the optimist here. The Tories really have nowhere left to go. They either follow Sunak or they go down in flames, surely even they realise they cannot appoint another leader in the next 2 years. There is no other option for them right now. That may just give him the leeway to do what you say above. He also understands the markets (he is one of them after all,) and how money works better than his predecessor.
We can pray he follows your excellent path out of the complex maze we face.
Vince, I admire your optimism, but, unfortunately I can’t share it. I agree some of the Tories may be able to think of the greater good (of their party) but most are too selfish and, probably, too thick.
Fail whom and why?
I agree that failure is an option but why?
Well, if he screws this up, he screws up the notion of ‘the state’ with the voters.
He reinforces the feeling of hopelessness and the pointlessness of politics and public services with the public. They’re crap – so why have them? Let’s get rid!! Look at the mess we are in? We can’t cope! Private will be better. Honest! TINA! We can’t afford it.
It’ll be more expensive mind – but we’ll worry about that later – you’ll be OK! We’ll make it affordable – especially for us! Ha Ha!
This is how you destroy public services except that the beneficiaries call it ‘market making’.
Could he go full rebel and appoint a Green MP energy minister and put Labour MPs in home affairs and the chancellors office, could make a LibDem the foreign secretary?
This would be declared a national emergency cabinet, if he could essentially cut off the ERG and the loony arm of the tories by getting legislation through via all the other parties, is it even possible under the rules?
Allow an independence referendum for scotland in two years, to secure their MPs support for pprogressive policies, would call their bluff also, as if he did solve the crisis with a green new deal then it would likely dampen support for indy ref 2.
Just a thought, he has £750m so why not go out in style over the next two years not like he needs the money.
Brring, bring, is that the 1922 committee? yes Mogg here…
He’s appointed Therese Coffey as environment minister, so that’s the idea of a green new deal out of the window. Her voting record on climate change is appalling.
https://www.theyworkforyou.com/mp/24771/therese_coffey/suffolk_coastal/divisions?policy=1030
Agreed
Have just finished watching Channel 4 new tonight and what can only be described as a freak show befitting Halloween!
Liz Truss telling us that we cannot grow economically when the government is taking too many taxes – arrogantly Tufton Street to the end. No sense of shame or contrition.
Braverman – WTF?!! Smiling as she left No.10. Sunak has effectively appointed a political criminal as Home Secretary! Home Secretary!!
As for the rest, it’s just a cast of rejects, isn’t it? Not one of them fit to govern anything. Coffey off to DEFRA!! Not one of them put to the sword at an election. I wonder what lame excuses Gove will find to deal with the mass marine die outs on the East Coast.
What a useless country – seriously.
The rest of us forced to get on with living whilst this charade of mostly expensively schooled half-wits gets to call the shots totally unchallenged!
And are now preparing the bill to US for THEIR fuckwhittage!
Craig Murray agrees, he writes a blog “The Primrose Path” on 25/10 in which he says Sunak will fail as did another super rich PM, Archibald Primrose, 1894-1895. He gives a fascinating history of Lord Rosebery, Murray’s analysis of Sunak will come another day. I am inclined to see similar and expect the Sunak crash with a year. I was specially appalled that Rishi Sunak appointed Suella Braverman as Home Minister and fully supports the forced removal of refugees to our shores off to Rwanda: a cruel and immoral policy. If you can do that don’t expect that other vulnerable people will not be sacrificed if needed.
Lord Rosebery was the penultimate prime minister sitting in the House of Lords, through his UK title of Baron Rosebery, not his Scottish earldom: he was PM for barely more than a year in 1894 to 1895 (then followed by Lord Salisbury for his third term until 1902, and discounting the short period in 1963 before Lord Home disclaimed his peerage.)
Perhaps there are parallels to draw between Akshata Murty and Lord Rosebery wife, Hannah Primrose (née Rothschild). By all accounts, Archibald was never the same after Hannah’s early death in 1890, but I see Craig focuses on other rumours about his private life.
[…] By Richard Murphy, a chartered accountant and a political economist. He has been described by the Guardian newspaper as an “anti-poverty campaigner and tax expert”. He is Professor of Practice in International Political Economy at City University, London and Director of Tax Research UK. He is a non-executive director of Cambridge Econometrics. He is a member of the Progressive Economy Forum. Originally published at Tax Research UK […]