THE RISHI RAJ CHALLENGES & PITFALLS
EVEN AS INDIA CELEBRATES ONE OF ITS OWN MOVING INTO 10, DOWNING STREET, RISHI SUNAK FACES THE DAUNTING CHALLENGE OF PULLING THE UK ECONOMY BACK FROM THE BRINK
In 1869, telegraph pioneer John Pender set up the British Indian Submarine Telegraph Company to lay undersea cables from Britain to India. When English author John Ruskin was told about the venture, he asked, half in jest: “I wonder what the message will be.” A century and a half later, a man of Indian descent, well-tailored and whipsmart, has become a powerful message unto himself, to a country that has itself has become a joke as it grapples with an economic crisis and political instability. Former hedge-fund manager Rishi Sunak has become the youngest prime minister of Britain in 200 years, and the first person of colour and the first practising Hindu to hold that office. The lights had long dimmed on the Empire where the sun never set and on Diwali day this year, Westminster was drowned in a festive light of diversity, as the Empire struck back in style. Even Labour peer Paul Boateng could scarcely contain his joy: “Britain has shown the world that you can have a truly multi-racial democracy and it’s something I’ve fought for all my life.” For Sunak, it has been an astonishing race to the top. He was the first minister to quit the scandal-scarred Boris Johnson cabinet on July 5, which marked the beginning of the end of BoJo’s government. Soon, he became one of the two candidates in the prime ministerial race after winning the backing of the majority of Conservative MPs. Later, he failed to win the hearts of Tory members against his party colleague and foreign secretary Liz Truss, a gutsy and vocal schoolteacher-turned-politician. Truss’s government lasted a mere 49 days—an embarrassing record of its own—and Sunak was elected the prime minister after securing the support of more than half of the Tory MPs.
In retrospect, winning the prime minister’s post may turn out to be easier than rescuing
A SELF-CONFESSED FAN OF STAR WARS AND A COMMITTED SUPPORTER OF THE SOUTHAMPTON FOOTBALL CLUB, SUNAK IS ALSO A PRACTISING HINDU, VEGETARIAN AND A TEETOTALLER
Britain’s flailing economy and plummeting international status. Sunak faces enormous challenges and dangerous pitfalls that could unseat him as rapidly as they did Truss if he does not deliver in the coming month (see Economy: The Big Four Challenges). Post Brexit, the UK moved away rapidly from the promised land of financial opportunities and trade deals with the rest of Europe. Amid the highest inflation in four decades of above 10 per cent, the pound plummeted precipitously to 1.03 to the dollar, its lowest level ever, in late September. Food prices spiralled upward at their fastest pace in more than 40 years. A cost-of-living crisis hit all parts of the country as wages remained low. Consumer spending nosedived, with data released on October 21 showing that people were buying less than before the pandemic. Interest rates were climbing up, sparking angry reactions. Britain’s famed bureaucratic and diplomatic efficiency, and the advantage of a universal language, was fast losing its steam.
As households face the prospect of high energy bills, Matthew Taylor, the chief executive of the NHS Confederation, chose to point out how research shows that up to 10,000 people die from underheated homes in a year. And the cost-of-living crisis will create an “unprecedented number of people who won’t be able to heat their homes”. There will be more deaths this winter unless the government acts. Life in modern Britain has started to resemble Dickensian fiction. Spanish daily La Vanguardia’s London correspondent Rafael Ramos minced no words. “In literature and art, absurdism is the tendency to avoid the constraints of the logical, shun experience and reality, and give oneself over to the irrational and the arbitrary,” he wrote. “In politics, this is what we’re seeing in the UK.”
In four months, the country has had four chancellors, two interior ministers and two prime ministers before Sunak took over. Even Russia was quick to join the jibe machine. Its foreign ministry spokesperson, Maria Zakharova, said Truss would be best remembered for her “catastrophic illiteracy”. Sunak was clear about the circumstances of the change of guard at Downing Street and making changes was the theme of his first speech. Admiring his predecessor’s “restlessness for change”, he acknowledged that she had made mistakes. “Not borne of ill will, or bad intentions—quite the opposite, in fact—but
mistakes nonetheless. And I have been elected as leader of my party and your prime minister, in part to try to fix them.” Sunak promised to deliver on the commitments in the 2019 manifesto—a stronger NHS, better schools, safer streets, control of borders, protecting the environment, supporting the armed forces, levelling up and building an economy that embraces the opportunities of Brexit. Many in Britain believe Sunak will rewrite the British story, which has lost the plot.
Like all good stories, this one too begins with someone new coming to town. Someone whose rise is a phenomenal story of success. Sunak’s Punjabi grandparents came to Britain from colonial East Africa in the 1960s. His doctor father and pharmacist mother sent him to an elite private school, Winchester College. The line-up of the school’s alumni is impressive—
General Sir Nick Carter (Chief of the Defence Staff), David J. Thouless (who won the Nobel for Physics in 2016), Mansoor Ali Khan Pataudi (the famed Indian cricketer) and George Mallory (Everest mountaineer). Sunak’s biggest regret is that he never won a scholarship to Winchester and his parents had to fork out a princely sum of £43,000 annually as fees.
But not all elite private school students end up getting British cabinet memberships. For that, one perhaps has to enrol for a course established almost a century ago. Sunak joined Lincoln College at Oxford University as an undergraduate to study Philosophy, Politics and Economics (PPE). “More than any other course at any other university, more than elite private schools, and in a manner unheard of in any other democracy, Oxford PPE pervades British political life,” says Farzana Baduel, director of Curzon PR. From the right to the left, from the centre to the periphery, from top
HIGH ENERGY BILLS MAY FORCE BRITONS TO FOREGO HEATING IN HOMES. RESEARCH SHOWS UP TO 10,000 PEOPLE DIE A YEAR ON ACCOUNT OF UNDERHEATED HOMES. THE COST-OF-LIVING CRISIS WILL EXACERBATE THEIR WOES
notch activists to ultra-capitalists, from bad boys to charmers, PPE grads have worked in rooms of all sizes in British political mansions. The Labour peer and thinker Maurice Glasman, who studied modern history at Cambridge, says: “PPE combines the status of an elite university degree—it is the ultimate form of being good at school—with the stamp of a vocational course. It is perfect training for cabinet membership, and it gives you a view of life. It is a very profound cultural form.” When Sunak graduated in 2001, he went straight to Goldman Sachs, like many ambitious students. The, after two years in California completing an MBA degree, he returned to London and Mayfair in 2006, where a new kind of boutique finance called the ‘hedge fund’ was flourishing. He was hired by Sir Christopher Hohn at The Children’s Investment (TCI) Fund Management, a coveted role at an activist firm. “There are two kinds of people at hedge funds. Handsome smooth-talkers who chase clients
to part with their money, and dull ones in the back room with their shirts buttoned up badly. Rishi was the first type,” says Sumesh Puthiyaveetil, director of eXcentius, a firm that provides strategic tech due diligence and value creation for private equity.
It was at Stanford that Sunak met his wife Akshata Murty, daughter of Indian tech millionaire N.R. Narayana Murthy. The two were married in a two-day ceremony in Bengaluru in 2009. Sunak later brought her to Southampton, to the family temple he attended growing up and to Kuti’s Brasserie, where he’d once laid tables as a young student. His former employer, Kuti Miah, catered Thai food at a 200-strong reception for Sunak. “The perfect son-in-law was soon made a director at Catamaran Investment, Murthy’s private family investment vehicle. It showed how much Murthy trusted him with his money,” says Puthiyaveetil. He was then parachuted to a Tory safe seat in Richmond, to the utter dismay of many Tory grandees. “Sunak’s billionaire father-in-law, Narayana Murthy, however, was so enthusiastic about Sunak’s parliamentary career that he had flown in, and had even been leafleting on his behalf, wearing a Rishi sweatshirt,” says Ben Judah, British journalist and author of This is London and Fragile Empire. Sunak joked to his friends about him and his wife being the only immigrant population in the constituency. “To be honest,” argued Sunak, “I think it’s patronising to assume minorities should only run in minority seats.” On May 7, 2015, Sunak won, with more than 50 per cent of the vote.
Sunak then backed the Brexit movement and, more importantly, backed Boris Johnson to the hilt. After Johnson deposed Theresa May as prime minister on July 20, 2019, he ensured that the Tories would return to power with a landslide victory in December that year. Johnson initially picked Sunak to be chief secretary of the Treasury and then made him Chancellor of the Exchequer (equivalent to the Union finance minister in India) after dropping Sajid Javid in February 2020. On average, British finance ministers have a cabinet experience of five years and will have spent at least 15 years in Parliament; Sunak came and wrote new rules for himself. He went off
the blocks quickly. When Covid struck, more than Johnson, Sunak became the man of the moment. His profile soared when he oversaw generous cash schemes and furloughs to help the needy and unemployed, which saw him being acknowledged as a “compassionate leader” even as he took tough decisions to steady the tottering economy.
Simultaneously, Sunak built up his public image, even enlisting the help of Cass Horowitz, co-founder of The Clerkenwell Brothers, an independent creative studio working across strategy, identity, advertising and social media. “The particular approach he and his team took has probably a lot to do with the old advertising idea of positioning—finding a distinct persona within the market—so the slick but homely image that’s being pushed for him is different from the belligerent populist images that have dominated politics recently, and has the chance to stand out because of this,” says Philip Seargeant, author of The Art of Political Storytelling: Why Stories Win Votes in Post-Truth Politics.
Sunak struck at the right time by resigning from his position as chancellor in July when he found that Johnson’s reign had turned chaotic. In a tweet he posted soon after his resignation, he said, “The public rightly expect government to be conducted properly, competently and seriously.” His resignation set off a cascade of ministerial departures that culminated in Johnson’s ouster. Though losing the leadership race to Truss was a setback, it may have been a blessing in disguise. It gives Sunak more leeway and time to go about pulling the economy out of the morass it has sunk into. Sunak will have to deal with not just an economy in a shambles, but also a Tory party that is hopelessly split into groups and a resurgent Labour party that is demanding fresh general elections rather than wait till 2024. As Sunak told his partymen after being elected, “It’s a do or die moment for us.”
For the Labour party, Sunak is a more difficult opponent than any other Tory candidate given his charisma, rare confidence and can-do approach in addition to his relative youth and good looks, captured pithily in a tabloid headline that called him “Dishy Rishi”. The British media, which can be both brutal and irreverent to politicians, are even talking about how the Labour party is pinning its hopes on an obscure statistic that believes a taller prime ministerial candidate tends to win. Both Labour leader Sir Keir Starmer and Boris Johnson are relatively short, at 5 feet and 8 inches. But the Labour leader is still taller than Rishi’s 5 feet, 6 inch height. “Bring on the little Rishi,” they say. Rishi can find solace in the fact that one of Britain’s longest-serving and most powerful prime ministers, Margaret Thatcher, was just 5 feet 5 inches tall.
Like Thatcher, Sunak has to resort to tough, unconventional measures to deal with a collapsing economy and public confidence. Sunak is not a pragmatic centrist. “Indeed, his ascension represents a triumph for the Conservatives’ Thatcherite wing,” says George Eaton, senior editor of the New Statesman. “Tory members were offered two varieties of neoliberalism: Reaganite tax cuts from Truss or Thatcherite fiscal discipline from Sunak. The implosion of the former has created the ideal pretext for the latter.” His major tasks are to control inflation to keep the electorate happy, steady the pound and lower interest rates to get investment going to revive the economy. Economist Nitin Desai says this will require Sunak to take tough decisions, including spending cuts, particularly in the defence budget, if he doesn’t want to impose taxes, in addition to other austerity measures. He also has to find ways to restore trade relations with Europe if Britain’s economy is to regain its former might.
“The government’s long-term borrowing costs, previously close to zero, had risen above 5 per cent by mid-October, even with the Bank of England shoring up demand to keep bond yields down,” says Alan Shipman, a senior
FOR THE LABOUR PARTY, SUNAK IS A MORE DIFFICULT OPPONENT THAN OTHER TORY CANDIDATES GIVEN HIS RELATIVE YOUTH, GOOD LOOKS, CHARISMA, CONFIDENCE AND CAN-DO APPROACH
lecturer in Economics at The Open University. “At the same time, consumer borrowing has also risen in cost, dousing any hope of a post-pandemic bounceback of growth-promoting investment. The present high rate of inflation would also, in the past, have eased the government’s financial pressures by eroding the costs of public and private debt. But that shield has worn thin. Payments on 25 per cent of the government’s debt are now aligned with the inflation rate, and lenders are rapidly passing on the rise in borrowing costs to mortgage and credit card borrowers.” What Sunak does for the economy in the next month will make or break his premiership, if not the UK.
While there is euphoria in India over his appointment, experts believe that he may turn out to be more loyal than the King and be tougher on India. His reappointment of Suella Braverman as home minister signals a rough road ahead for the negotiations on a free trade agreement with
India that was to conclude on Diwali. When Truss was prime minister, Braverman as her home secretary had said she had “concerns” about the trade deal because it would increase migration to the UK, and Indians represented the largest group of visa overstayers. India has been calling for the free movement of people to accompany the free movement of goods, and her comments provoked angry reactions from New Delhi. In April, both countries targeted a doubling of bilateral trade by 2030, up from its current value of $30 billion. India wants to increase exports of leather, textiles, jewellery and food products to Britain, while the UK is keen to sell more whisky to India, by reducing the import duty of 150 per cent. But relaxation of visa rules has been one of India’s main demands, and reinstalling Braverman could make this trade deal a casualty.
The other challenge for Rishi is to move beyond his privileged upper-class background and address the cost-of-living crisis in the country. Sunak’s immense wealth works against him, earning him the derisive sobriquet of ‘Rishi Rich’. He, his wife and two daughters, Krishna and Anoushka, live mostly at their five-bedroom house in a Kensington cul-desac in west London, worth around £7 million. On weekends, the family retreats to their Grade II-listed Georgian manor house in the village of Kirby Sigston in his Richmond constituency in North Yorkshire. The house, bought in 2015, is now worth more than £2 million. Later, he gave the house a face-lift with a £400,000 indoor swimming pool, gym, yoga studio, hot tub and tennis court. Rising energy costs mean it will cost more than £14,000 a year to heat the 12 metre by 5 metre pool, almost six times the average family’s energy bill.
His clumsy flaunting of wealth comes at a time when millions of Britons are thinking how they are going to survive as two-thirds are facing fuel poverty and hundreds of excess deaths are expected during the winter. His £450 Prada loafers and £180 smart coffee mug have attracted criticism and snarky social media memes. The Sunaks own a flat on Old Brompton Road in west London for visiting family, and also a Santa Monica beach penthouse valued at £5.5 million. In a podcast with the Telegraph, Sunak said he is not dodging that question. “I actually quite welcome it, to be honest. It’s the opposite of annoying. Very few people bring it up with me. While I was chancellor, I did town hall meetings very regularly with members of the public … virtually nobody asked me about it. Values are what are important, what I’m wearing is irrelevant to all of that.”
In 1947, a half-naked fakir, as Winston Churchill disparagingly called Mahatma Gandhi once, brought the mighty British Empire down to its knees and forced it to grant India independence. In a perfect irony, 75 years later, a man of Indian descent dressed in designer suits with creases so sharp that they can cut you, is seeking to liberate Britain from economic gloom. The Maha Rishi is all set to turn 10, Downing Street into his ashram from where he will rule the island of rainy clouds and cupcakes, with wide-ranging consequences for people at home and abroad. ■
NOT A PRAGMATIC CENTRIST, SUNAK LIKE THATCHER IS A VOTARY OF FISCAL DISCIPLINE. HE’LL HAVE TO TAKE TOUGH DECISIONS, INCLUDING SPENDING CUTS, IF HE WANTS TO AVOID IMPOSING TAXES