Britain and Rishi Sunak

The new PM faces unenviable challenges ahead, but he is a testament to the progress Britain has made towards becoming a multi-racial society

Britain’s economy and polity are undergoing the most serious stress in the last 50 years. A new prime minister, Rishi Sunak, has been anointed 15 days ago, the third in just over two months. Notably, he is the first PM of Indian origin and a practising Hindu. He faces unenviably challenging tasks, to put it mildly.

Let’s take the economy first. The annual rate of inflation in September rose above 10 per cent and is expected to rise further. According to the latest Monetary Policy Report of the UK’s Monetary Policy Committee, published last week, GDP is expected to decline in the second half of 2022 (that is UK has already gone into recession) and, in their central projection, the recession could last for two years till the first half of 2024, making it the longest recession since the 1920s and raising the unemployment rate to above 6 per cent. The silver lining is that the recession could be shallow compared to earlier ones. The accompanying macroeconomic policy challenges include high levels of government borrowing, large balance of payments deficits and heightened income and wealth inequalities.

The factors contributing to the UK’s current economic predicament include: Brexit from the European Union, which kicked in on February 1, 2020, following the referendum result of 2016 and subsequent prolonged negotiations; a long period of low productivity growth; the Covid pandemic shock and its handling; the ongoing Russia-Ukraine conflict and its implications for energy and food supplies and prices; and the recent September fiasco of the Liz Truss “Mini-Budget” of September. How much of the economic problem is attributable to each such factor is for UK experts to tell us …or anybody’s guess, depending on the reader’s faith in economic scholars.

One salient fact is clear: The UK is unlikely to contribute materially to increases in global economic growth in the next couple of years.

On the political side, the basic story is clear enough: After winning the largest electoral victory for the Conservative Party in 2019 since the time of Margaret Thatcher, Boris Johnson squandered his popularity and credibility in the next three years to such an extent that his party lost confidence in him this summer, leading to the procession of prime ministers we have witnessed since he formally demitted office in early September. Some records of the wrong kind were set, including the first time the UK has had three prime ministers in less than three months and the shortest incumbency by a British PM (Liz Truss for six weeks).

One extraordinary and much-welcomed record was the ascension of Rishi Sunak as PM, when, on October 24, he was the only candidate to secure over a hundred nominations from Conservative MPs by the required deadline and was thus declared leader of the party and duly invited to form the government by King Charles III on the next day. He is the first “coloured” (brown in his case) UK PM of South Asian (Indian in his case) origin and the first practising Hindu. Less welcomed, he is perhaps the wealthiest PM in the last 60 plus years. The appointment of a brown Asian as PM in 85 per cent majority white Britain is an astonishing event and testament to the plurality and tolerance of British society and to the openness of its political processes, at least to well-educated (preferably Oxbridge!) achievers. It is very hard to imagine anything comparable happening in any other G-20 nation, with the possible exception of Canada (Obama was only half-black, and a repetition looks unlikely in the foreseeable future of America). On a personal note, based on my eight years (1959 to 1967) in school and college in England, at a time when Enoch Powell was warning of “rivers of blood” from racial strife, I could never have imagined the progress Britain would make in the next 60 years towards the stated goal of a multi-racial society.

^{Illustration: Binay Sinha}

Some qualifications are necessary. First, though great strides have been made, racism remains a significant problem. Second, though cabinet ministers of South Asian origin have become visible from 2014 (beginning with Pakistani origin Sajid Javid), the numbers are still few (including Sajid Javid, Priti Patel, Rishi Sunak, Alok Sharma and Suella Braverman). Third, all except Mr Sharma are born and bred in the UK, with their parents mostly coming from East Africa in the first instance. Mr Sunak was schooled at Winchester and went to Oxford before earning his MBA from Stanford and working with Goldman Sachs and a couple of hedge funds. Interestingly, all have served in Conservative governments, none in Labour.

Third, and perhaps most importantly, the choice of Mr Sunak as PM was essentially the choice of Conservative MPs, not of the 150,000 or so registered members of the Conservative Party. When the latter had voted two months earlier their choice had been Liz Truss. If Mr Sunak lasts the remaining two years of the current Parliament, it is not obvious that he would be the best choice, politically, to lead the Conservatives in the next general election. Given the major economic challenges facing Britain, the pronounced factionalism within the current Conservative Party and the massive lead of Labour in the current opinion polls, it would be quite an achievement for Mr Sunak to survive as PM for even the next two years.

Will Rishi Sunak as PM make a material difference to Indo-UK relations? We should not harbour any sentimental illusions on this score. Mr Sunak is British first and of Indian origin a distant second. His approach to policy will serve British national interests, not India’s or any other nation’s. That is how it should be. Where British interests are coterminous with Indian ones, we may get warmer smiles. Where such interests diverge, I would not expect Rishi Sunak to hesitate for even a nano-second before pursuing British interests, at the expense of Indian ones, if necessary.

The writer is Honorary Professor at ICRIER, former Chief Economic Adviser to the Government of India and author of An Economist at Home and Abroad (Harper Collins, 2021). The views are personal