RISHI SUNAK VS LIZ TRUSS - THE NEXT PRIME MINISTER: THE FINAL CONTENDERS - SEC Newgate UK
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For the third time in six years, the Conservative Party finds itself looking for a new leader, with the winner set to be announced on Monday 5 September. After five rounds of voting Despite having both served among MPs, Foreign Secretary together in Cabinet for most of Liz Truss and former Chancellor the Johnson administration, Rishi Sunak emerged as the final Sunak and Truss have set out INTRODUCTION two candidates to face the full significantly different positions Conservative membership in a on a range of issues, from the head-to-head contest. While economy to Net Zero, and are Sunak finished top of each set for a bruising month-long round of MP voting, it is Truss campaign to convince members who starts the membership they have the right ideas to win ballot as clear favourite as the next general election. hustings take place around the country during August. Our SEC Newgate briefing looks at what the candidates stand for, who their key allies and potential Cabinet appointments are, and what positions they have taken on the crucial policy decisions they will face when entering No.10 as Prime Minister. 2 3
LIZ TRUSS The Foreign Secretary with a ten-year frontbench Truss is running from the right of the Conservative career behind her is pitching herself as the Party and is known for her economic libertarian views continuity candidate. Identified by pundits as a and enthusiastic support for free trade. A Liberal frontrunner early in the Conservative leadership race, Democrat during her student days and a campaigner her campaign got off to a rockier than expected start, for a remain vote in the 2016 referendum on the UK’s with Penny Mordaunt coming close to keeping her EU membership – as Sunak’s campaign has been off the final ballot. eager to remind the Conservative membership base -Truss has refashioned herself as a born-again Brexiteer. Leading Sunak in polls of Conservative Party members, Truss has announced that as Prime Minister, she would reverse the national insurance rise, introduce a temporary moratorium on green levies WHO ARE on energy bills, and rule out corporation tax hikes. RISHI SUNAK AND LIZ TRUSS? She has been keen to draw attention to the difference Known for her at times idiosyncratic speaking style, between her background and Sunak’s, emphasising which has led to clips of some of her speeches going her education at a state comprehensive school and viral, her campaign has faced some challenges over RISHI SUNAK drawing some media criticism for describing whether she cuts a ‘serious’ enough figure for a The one-time favourite to be next in line, whose opportunities that he went on to enjoy, a narrative that Roundhay in Leeds - where she spent part of her potential Prime Minister. However, these criticisms resignation as Chancellor helped bring about the Sunak campaign put at the heart of his original childhood - as a ‘red wall’ area. seem to be having minimal influence on the position Boris Johnson’s sudden downfall. Sunak’s handling launch video. Concerns remain among some of Conservative members. As the situation stands, of the economy during the pandemic - built on huge members, however, about the questions Sunak would Truss is in pole position to become the next additional spending - catapulted him into the face in a general election campaign regarding his Prime Minister. spotlight and earned him plaudits from MPs and the family wealth. public alike thanks to interventions such as the furlough scheme. On policy, Sunak is positioning himself at the responsible small ‘c’ conservative who has insisted on However, this picture has looked very different tackling inflation and controlling the public finances, as of earlier this year. His fine for breaching Covid before his promises of tax cuts can be delivered. His restrictions coupled with the media attention on his decision to temporarily scrap VAT on energy bills to wife’s tax affairs left him facing accusations of being help with the cost of living, however, is evidence of out of touch and out of luck as he pushed through the pressure his fiscal conservatism has come under a controversial rise in National Insurance. during the campaign. He has tried to fight back against perceptions of him Sunak’s handling of the as part of the wealthy elite by emphasising the economy during the pandemic - conservative values of ambition and hard work, highlighting his family’s backstory as evidence of the built on huge additional spending opportunities that the UK can provide. Sunak’s family - catapulted him into the emigrated to the UK with little money but built a spotlight and earned him plaudits successful family business, working to provide the from MPs and the public. 4 5
KEY ALLIES AND POSSIBLE CABINET LIZ TRUSS Truss has also been buoyed by a number of high- Pitching herself as the continuity candidate who - profile endorsements from her colleagues in the The first challenge for the new leader will be appointing a unlike Sunak - stayed loyal to Boris Johnson until the Cabinet and former contenders in the leadership Cabinet that strikes the balance of rewarding their own supporters end, a Truss Cabinet is likely to bring together new election. The endorsement from Defence Secretary and old. Expect promotions for her inner circle, with Ben Wallace, whom Truss has worked closely with in while also bringing in talent from all wings to unite the party Business Secretary Kwasi Kwarteng, Work and response to the situation in Ukraine, no doubt after a bitter contest. Pensions Secretary Thérèse Coffey and provides a significant boost to her credentials as a Chief Secretary to the Treasury Simon Clarke likely candidate capable of leading on the major foreign to be among the biggest winners. policy challenges of the day. Regarded as having delivered an effective response to the Russian Ahead of what is to be a difficult end to the year with Others who may be hoping for a spiralling living costs, a double-digit deficit to Labour Kwarteng, a long-term friend and intellectual ally of invasion, expect Wallace to remain in post, with one job under Sunak include Mel Stride, eye on the eventual role as NATO General Secretary. in the polls and further planned strike action, putting Truss, shares her vision for a tax cutting, small state up a united front will be essential if the new who has been helping to lead his approach to governing. Should the Brexit-backing Truss’ plans to increase defence spending, followed government is to hit the ground running. campaign. Currently serving as Kwarteng be promoted to Chancellor, we can expect by the endorsement of Wallace look to signal a Chair of the Treasury Select the pair to sing from the same hymn sheet on the reversal of Johnson’s planned cuts to troop numbers. Tom Tugendhat’s endorsement also bolsters Truss’ Though Sunak and Truss have each said they would Committee - scrutinising Sunak’s economy, in stark contrast to the often-fractious offer the other a role in their Cabinet, the reality is that relationship between Johnson and Sunak. credentials as a serious figure on foreign policy and economic agenda from the is likely to be under consideration for a role in from Chancellor and Foreign Secretary the only way is down for whoever misses out on promotion to No.10, backbenches - Stride represents a Despite working alongside Sunak, Chief Secretary the Foreign Office next time round. meaning a return to the backbenches could be on the safe choice for an economic brief to the Treasury Simon Clarke was an early backer of cards for the runner up, making it easier for them to and knows the department well Truss’ campaign and has been critical of the former Though the contest still has a way cause trouble for the winner. following his time as Financial Chancellor’s move against Boris Johnson. Part of the to go, the fact that Wallace and 2017 intake and representing one of the first bricks Secretary to the Treasury under Tugendhat have broken the way of in the ‘Red Wall’ to fall, the Middlesbrough South and RISHI SUNAK Theresa May. East Cleveland MP’s appointment to Business Truss suggests that they are Sunak would also be expected to reward his Secretary would be presented as a signal of Truss’ acutely aware of the current campaign team with roles at the top table. Health One particular challenge for Sunak – and indeed Truss Secretary and former Chief of Staff to Boris Johnson, - will be what to do with former Levelling Up commitment to continue the levelling up agenda direction of travel. and allay fears that it will be left behind with the Steve Barclay, is touted as potential Chancellor, Secretary Michael Gove. Gove was an early backer of change in government. International Trade Secretary Anne-Marie Trevelyan bringing experience from his time as Chief Secretary Kemi Badenoch but has yet to declare for either of the – whose strong criticism of Penny Mordaunt helped and an earlier stint as Economic Secretary final two candidates. Still regarded as an effective Other loyal supporters dent her campaign to Truss’ benefit - would also hope to the Treasury. minister capable of driving ahead with his own agendas, most recently putting flesh on the bones of including Work and Pensions to remain in the fold and challengers to the right of In line for returns from the wilderness are former levelling up, Gove may be in line for an immediate Secretary Thérèse Coffey and Trade Truss such as Kemi Badenoch and Suella Braverman can also expect to be rewarded with good jobs. Housing Secretary Robert Jenrick and former Culture return to the job he had made his own before his Minster Ranil Jayawardena would Tapping into the party’s new blood, rising stars of the Secretary Oliver Dowden, who resigned from his role shock sacking. also be in line for promotions, while 2019 intake such as Dehenna Davison would be odds as party chair following the two by-election defeats the newly appointed Education on to enter government for the first time in in Wakefield and Tiverton and Honiton. Jenrick and As much as Sunak’s broad base of support from his Dowden are close allies of Sunak, with the three colleagues in Cabinet and across government meant Secretary, James Cleverly, would public-facing junior ministerial roles. penning a joint article during the 2019 leadership he had the early momentum during the race, it also also fancy his chances of retaining How Truss would look to reward those Johnson campaign that played a key role in winning support poses an additional layer of challenges with those his place in the Cabinet. uber-loyalists such as Nadine Dorries and for Boris Johnson among new MPs. backers looking to be rewarded. Deputy Prime Jacob Rees-Mogg, whose backing helped haul her Minister Dominic Raab and Transport Secretary above Mordaunt in the final round of MP voting, Grant Shapps are just two of the senior Cabinet would be a more challenging prospect given their members whose endorsements lent significant aggressive opposition to Sunak and the backlash to it credibility to Sunak’s bid and both will expect to retain from his supporters. senior positions in government. Balancing this with the need to bring in his own team would no doubt be a major challenge early on. 6 7
E C O N O M Y A N D TA X Undoubtedly the biggest battle throughout this leadership campaign has been over economic policy and, in particular, the differing levels of taxation that Truss and Sunak are proposing. With a contest being fought at a time when the UK economy is suffering extreme stagflation, the new Prime Minister will have to develop policies to deal with low growth and high inflation, both at levels that have not been seen in the UK since the 1970s. Both candidates have attacked each other’s proposed Economists and critics of Truss have highlighted that, tax policy. During the BBC debate, Sunak repeatedly by nature, tax cuts are inflationary. Still, the Foreign interrupted Truss to declare that her plans were “not Secretary hopes economic growth and further responsible,” “not moral,” and a “short-term sugar borrowing will fund the cuts. Furthermore, Truss has rush,” with an effort to position himself as being more been keen to highlight that both the American and fiscally conservative. Truss hit back, claiming that Japanese economies have higher levels of debt than Sunak’s tax policies as Chancellor were the UK and that no other G7 nation has raised unconservative and his plans would lead the UK taxes since the pandemic – and therefore, she towards a recession. believes there is room for the UK to borrow more. Truss has pledged tax cuts Truss also wants to view the Covid debt as akin to a wartime debt, with less emphasis on repayment. It is totalling £30bn. She would reverse a risky approach for Truss to take, given the global the National Insurance inflationary predictions and tax cuts certainly will not increases that Sunak introduced, guarantee that the UK avoids a recession. She was cancel the Corporation Tax rises also unable to provide an answer to the due next April, and introduce a BBC Economics Editor, Faisal Islam, when he asked what impact the record high long term interest rates temporary removal of green energy would have on how ability to pay off public debts levies on electricity bills. from Covid-19. Despite this, she has claimed that the economic policies of the last 20 years have failed and Sunak pledged to cut taxes, but only after inflation stated that she wants to alter them radically. has peaked and returned to some level of normality. Sunak has pitched himself as the responsible candidate to manage the economy and has made tackling inflation his key priority. He has said he would stand by his increase in taxes but insists this will only be in the short term. He has been clear that he views any policy approach that passes on public debts from Covid-19 as both irresponsible, and unfair to future generations. Sunak has also avoided pledges to increase the defence budget or announce new public sector spending plans. 8 9
NET ZERO TARGETS Sunak has stated that he supports the UK’s 2050 net zero target, pushing the narrative that Net Zero would allow the UK to invest in the economy of tomorrow. He has also announced that as Prime Minister, he would introduce policies to move the UK towards a self-sufficient energy network by 2045. Liz Truss has also stated her support for the UK’s legally binding Net Zero target but has said that the Net Zero agenda must be delivered in a way that “doesn’t harm people and businesses.” E N E R GY A N D N E T Z E R O The energy sector has been on the front pages since Russia invaded Ukraine. There is great pressure on both candidates to set out how they would navigate the UK out of the energy crisis, with COP26 President Alok Sharma threatening to resign should the new PM fail to deliver on the Net Zero agenda. However, despite the energy price crisis, green Ultimately, neither Truss nor Sunak has demonstrated issues has not been especially prominent in either the same level of enthusiasm for green policies and candidate’s campaign speeches or contributions to Net Zero as Boris Johnson has during his time as PM. debates. Open Democracy noted that BBC, LBC and While both have managed to secure the backing of GB News dedicated only 3% of interview time with influential Conservative MPs who are committed to both candidates to climate issues. What Rishi Sunak keeping the UK on a 2050 Net Zero trajectory (Net and Liz Truss have presented thus far have been Zero Support Group Chair Chris Skidmore MP is described by the New Statesman as ‘lip service’, with backing Sunak, and BEIS Secretary Kwasi Kwarteng both candidates promising un-costed tax cuts and has thrown his support behind Truss) it remains to Truss stating that green levies on energy bills should be seen how much these voices will influence the be temporarily scrapped. direction of either’s campaign – or premiership. 10 11
GREEN ISSUES At a hustings organised by the Conservative Environment Network, Truss pledged that if she becomes Prime Minister, she would attend and send a delegation to the COP15 biodiversity conference in Montreal. Truss has previously been criticised by parts of the Moreover, he has pledged to renewable energy industry for introducing uphold the ban on new onshore controversial cuts to subsidies for solar farms during her time as Environment Secretary, and for claiming at wind farms in England, which would the time that solar farms hindered food production. mark a departure from Boris Johnson’s plans to consider Sunak has announced that he would consider relaxing the planning rules for introducing new energy efficiency schemes for onshore wind in England in areas housing. However, some critics have noted that during his time as Chancellor, there were reports of where it has local support. clashes between Sunak and Johnson over green policies, and Sunak is believed by some to have delayed the release of the government’s Heat and Buildings Strategy. ENERGY BILLS During Truss’ campaign, she has emphasised her focus on energy security, and has pledged that she would put a temporary moratorium on green levies on energy bills. She has also argued that the war in Ukraine demonstrates that reliance on fossil fuels is “unsustainable.” Criticising her opponent’s introduction of a windfall Sunak has announced that he tax on oil and gas company profits during his time as would remove the 5% VAT charged Chancellor, Truss has said that she does not believe in windfall taxes, and that “what we should be doing is on household energy bills for encouraging Shell and other companies to invest in 12 months from October if, as the UK because we need to get our productivity up.” expected, the energy price cap for a typical consumer rises above £3,000. This announcement was met with some criticism from Truss’ campaign, with BEIS Secretary and Truss-backer Kwasi Kwarteng describing the move as “a screeching handbrake U-turn.” 12 13
H E A LT H HOUSING Winning him few friends on the backbenches but Housing remains one of the major public service signalling his commitment to pragmatism against his challenges which the candidates will need to confront own economic instincts, Sunak’s major contribution to in office. NHS reforms remains the increase to national insurance contributions. With waiting lists at record Throwing red meat to the membership, Sunak has highs, Sunak declared that addressing this would be pledged to protect the Green Belt and prioritise his “number one public service priority” in office with housing reform through building more houses in the the further target of eliminating one year waits by the North and Midlands, while also reforming the end of 2024. planning system to empower local communities. As part of last year’s Budget, he provided an Showing her willingness to take on a challenge, Truss’ additional £6bn in funding for the NHS as part of approach is rather different. She has outlined her broader plans which Truss has also committed to desire to build a million new homes on the Green Belt honouring. Truss would be likely to find her hands tied while also scrapping “Whitehall, Soviet-style, in continuing to provide this additional funding for top-down targets.” Also key will be the appointment the NHS. Consistent with her wider agenda of cutting of the next Housing Minister – with a dozen different red tape, she has also outlined her desire to reduce housing ministers in as many years, such a churn in micromanagement on the NHS frontlines, to reduce personnel inevitably makes planning for the waiting times and increase GP capacity. long-term difficult. PUBLIC SERVICES E D U CAT IO N Pitching herself as the ‘Education Prime Minister,’ Truss has set out her six-point plan for reforming the Truss favours a low tax, small state in which the government education system, including driving up maths and literacy standards while replacing failing academies focuses on encouraging growth and reducing regulation, while with free schools. She has also announced plans to shifting power away from Westminster and Whitehall. As he give all pupils who achieve top grades at A-Levels automatic interviews at Oxford and Cambridge. demonstrated throughout the pandemic, Sunak is more pragmatic in his approach. The experience of being Chancellor Given her background as a junior minister at the Department for Education – her first role in during the Covid-19 period has meant that he had to make government – education is perceived as an area of numerous politically challenging decisions, in many cases against advantage for Truss over Sunak. Much of her focus in the role was on driving up standards for early years his own more fiscally conservative instincts. education and reforming A-Levels to make Britain competitive on the world stage, so it is unsurprising to Truss has vowed to maintain current levels of public Taking a more pragmatic approach informed by his see this agenda developed as she mounts her spending despite her plans to cut tax. Whether the time heading up the nation’s finances, Sunak initially leadership bid. numbers add up remains to be seen, but her warned against tax cuts until public finances improve. immediate priority as set out during her campaign The planned increases to corporation tax along with Aside from announcing a ban on Confucius Institutes would be encouraging economic growth to drive the National Insurance hike he signed off on have won in schools and allowing Ofsted to grade PE lessons, investment from the private sector. As for public him few friends amongst the Conservative Sunak’s vision for education is less clearly defined. As sector spending, her priority is making the current membership base. Chancellor he signalled an interest in skills reform, so system work better through ‘cutting bureaucracy’ and this may well be an area which we would see built out ensuring that government support is provided in a under his premiership. more targeted way. 14 15
FOREIGN POLICY BREXIT Unsurprisingly Brexit has continued to play a significant role in the leadership contest, posing its own unique set of challenges to both candidates. Sunak, who backed Brexit from the beginning in spite Truss, by comparison, has had an of warnings about the impact that it might have on his easier time shaking off critics’ views political career, has struggled to win over the more ardent Eurosceptics within the party despite his on her Brexit position. Having repeated calls for the UK to embrace the championed remain in the EU opportunities that Brexit brings. At last year’s referendum, Truss has been able to Conservative Party Conference, he proclaimed that effectively rebrand herself as a born “the agility and freedom provided by Brexit would be again Brexiteer – helped in no small more valuable in a 21st century global economy than just proximity to a market.” In government he has part by being the face of post-Brexit continued to champion the use of freeports, special Britain through signing Free Trade areas within the UK’s borders with different Agreements (FTAs) with Japan, economic rules which he believed would make it Australia and New Zealand during easier and cheaper to do business. her time as International Trade and Foreign Secretary respectively. As a consequence, Sunak has sought to convince his Most recently, Truss has been leading the Northern pro-Brexit colleagues of his Ireland Protocol Bill through Parliament, legislation credentials by promising to scrap or that will unilaterally scrap parts of the deal signed with reform all “EU law, red tape and the EU in 2020. In spite of fierce EU opposition, Truss believes that the legislation will fix parts of the bureaucracy that is… slowing Northern Ireland Protocol which were “undermining economic growth.” The former the Belfast (Good Friday) Agreement.” Chancellor has also pledged to create a new Brexit Delivery Being the face of Global Britain has lent her credibility Department which will be tasked in representing the country on a global stage, shaking off some of the concerns from those within the party with focusing on either removing or regarding her previous support for Remain. This status reforming the 2,400 EU laws in our has been further cemented by securing the support of statute book so Britain can some of the most vocal Brexiteers in the Conservative “capitalise on the freedoms” Party, including members of the influential European of Brexit. Research Group and Minister for Brexit Opportunities, Jacob Rees-Mogg. 16 17
I MMI GR ATI ON However, Truss’ changing position on China has also been picked up on by As one of the ‘red meat’ policy areas for the membership, both Team Sunak. In a speech in 2014 as Education Minister, Truss said she was candidates have taken hard-line stances on immigration as they “delighted to support the IoE Confucius Institute”, adding, “the Confucius Institute and its network of Confucius classrooms will put in place a strong jostle to position themselves as the toughest on issues such as infrastructure for Mandarin.” This perceived double standard in Truss’ Rwanda and the Calais/Dover crossings. actions and rhetoric will no doubt be something that Sunak looks to capitalise on in promoting his credentials as the candidate best suited Declaring in The Telegraph that the UK’s ’’asylum The Foreign Secretary has arguably gone further than system is broken”, Sunak argued that taking back any other candidate on immigration during this to dealing with China on the international stage. control of our borders was one of the reasons he contest, vowing to expand the Rwanda deportation campaigned to leave the EU. As part of this pitch, he policy to other countries and increase frontline border also set out his 10-point plan to tackle illegal staff by 20 percent if she becomes Prime Minster. Her immigration, which included: capping the number commitment to fully implement the Rwanda policy has of refugees the UK accepts each year, creating a new led to her telling Conservative colleagues, during the FREE TRADE cross-government small boats taskforce, and first formal hustings, that she would be “prepared to tightening the definition of who qualifies for UK leave the European Court of Human Rights (ECHR)” Trade is one of the policy areas where Truss is strongest. asylum. Sunak has also repeatedly voiced his support if they continued to exert influence on the UK’s Throughout her time as International Trade Secretary, Truss for the Rwanda policy, stating that he would do immigration plans. This report seemed to be “whatever it takes to implement it and pursue confirmed after Truss said she would “not cower to advocated for the benefits of free trade. During the second reading additional similar partnerships.” the ECHR and its continued efforts to try and control of the Trade Bill, Truss highlighted how free trade not only helps immigration policy.” Britain, but the entire world, noting how it has helped to lift a billion CHINA people out of extreme poverty. Moreover, in a speech to Policy As Foreign Secretary, Truss has raised her concerns During the contest Sunak has come out as a critic of about China. During her Mansion House speech China, believing the Chinese Communist Party to be Exchange, Truss argued that free trade can help to achieve the earlier this year, she urged China to “play by the the “largest threat to Britain.” As a result, he has Government’s levelling up agenda as she set out how the UK’s new rules” and insisted that the country’s economic rise proposed a series of measures to mitigate Beijing’s was “not inevitable.” Truss has also called out China’s influence in the UK, including closing all 30 branches trade strategy will move from “defence to offence.” human rights violations in Xinjiang and warned of the Confucius Institute in the UK, creating a new an invasion of Taiwan would be a “catastrophic ‘NATO-style’ international alliance to tackle miscalculation.” Chinese cyberthreats, as well as reviewing all Her most notable achievements as International Trade Truss’ main trade policy centres Secretary include the Free Trade Agreements (FTAs) UK-Chinese research partnerships that could assist around the previously mentioned China’s technology or have military applications. signed with Australia and Japan, and the opening of The Foreign Secretary has been trade negotiations with New Zealand and the ‘new Commonwealth deal,’ sitting at keen to appear tough on China and Despite this recent tough stance on China, Sunak’s Comprehensive and Progressive Agreement for “at the heart” of her Global Britain has pledged to crack down on previously sympathetic views have not gone Trans-Pacific Partnership (CPTPP). plan. Her plan is to expedite Chinese-owned tech companies unnoticed. During his Mansion House Speech in July bilateral trade agreements with In spite of his desire to leave the EU, an independent such as TikTok. She has also 2021, the former Chancellor argued that too often member nations by prioritising a “the debate on China lacks nuance” and that Britain trade policy was not one of the issues that led Rishi announced that she will launch a Sunak to campaign for Brexit. In Parliament, the model Commonwealth Trade needs to establish “a mature and balanced “new Commonwealth deal” to relationship” with “one of the most important former Chancellor has rarely mentioned free trade. In template which, once agreed, will counter China’s “growing economies in the world.” Allies of Truss have also July this year, he said the future FTA between allow countries to have access to a malign influence.” accused Sunak of being soft on China, with former India and the UK holds exciting prospects for fast-track process to establish financial services but during the leadership contest he Conservative Party Leader, Sir Iain Duncan Smith, tailored bilateral agreements. highlighting that the Treasury under Sunak pushed has not spoken about his plans for new FTAs. hard for an economic deal with China. 18 19
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