Long stories short
- Liz Truss left Downing Street after seven weeks as Prime Minister.
- Myanmar’s military killed at least 50 people in airstrikes on a concert, according to a Kachin separatist group.
- Ukraine’s intelligence chief said Russia was evacuating civilians from Kherson in order to strengthen its defences.
Unite or die
The King is in London today, so Rishi Sunak can be anointed the kingdom’s third prime minister this year. He was appointed without a vote by party members, much less the electorate. He hasn’t given a single interview since the summer or a hint of how he might steer the country away from recession or into a new accommodation with its neighbours. His first speech to the nation as party leader lasted 89 seconds. So much for British democracy.
Sunak is the UK’s first non-white PM, and the wider world is paying attention to that even if Number Ten’s revolving door is now a blur. India’s Narendra Modi sent immediate congratulations. The Times’ Sathnam Sanghera writes movingly that “all sorts of brown kids in all sorts of places will dream higher as a result of Sunak’s appointment,” even though “he still had to prove himself repeatedly against utterly woeful white candidates”.
But what will he do?
Certainly MPs have a sense of the former chancellor as a fiscal conservative who will prioritise balancing the books. Markets rallied as he told Tory backbenchers yesterday they must “unite or die”. But while he has dispensed with Trussonomics, anyone who thinks he represents a shift to the centre-ground has another thing coming.
Austerity 2.0. Throughout his failed campaign against Truss, Sunak tried to outdo her as the Thatcherite candidate. In principle that would have meant lower taxes and spending, but his own Covid furlough scheme added £70 billion to the national balance sheet and Truss’s mini-budget put an extra premium on probity. Hence Jeremy Hunt’s giant tax cut u-turn earlier this month and – assuming Sunak keeps Hunt as chancellor – spending cuts that will hit public services and every Whitehall department.
Northern Ireland. A Brexiteer long before Truss, Sunak has committed to the Northern Ireland Protocol Bill, which would allow the UK unilaterally to scrap large parts of the original Brexit deal even though it was supposedly signed in good faith and tearing it up would damage rather than encourage European trade on which Britain depends. Steve Baker, the arch-Eurosceptic who gave the new PM his backing, says Sunak is a details man with the “sophisticated statecraft” to solve the dispute. We’ll see.
Immigration. Sunak says he’ll do “whatever it takes” to make the plan to deport asylum-seekers to Rwanda a success, even though the UNHCR says it’s illegal and Rwanda is a police state. He’s also pledged to tighten the definition of who is eligible to claim asylum in the UK and called for a cap on refugee numbers to be “determined by need”.
Ukraine and defence. Sunak has said he would “redouble our efforts and reinforce our policy of total support for Ukraine that Boris has so ably led”. Whether that means sticking to a Truss pledge to boost defence spending to 3 per cent of GDP by 2030 now looks doubtful. He called the target arbitrary in a 2019 row with Ben Wallace, the defence secretary, and didn’t commit to it as a leadership contender. Keeping defence spending at 2 rather than 3 per cent would save £157 billion over the next eight years.
Net zero. Sunak has vowed to make the UK energy independent by 2045, saying the country should have “more offshore wind, more rooftop solar and more nuclear”. He told Cop26 he’d make the UK the “world’s first net zero financial centre”. And yet he argued it was “pro-farmer” to restrict solar development on agricultural land. He’s also committed to drive up North Sea gas production.
Any other business. During the campaign, Sunak said he doesn’t believe trans women are women, and his campaign set out plans to combat “recent trends to erase women via the use of clumsy, gender-neutral language”.
What next? Barring any unforced errors on the mini-budget scale, Sunak can expect to enjoy a brief honeymoon, but he’ll need to start two herculean tasks at once: uniting a party that may now be ungovernable and minimising some of the country’s anticipated economic pain.
His path to victory at a general election is strewn with landmines if it exists at all. Key dates include:
- This week: a reshuffle may clear out some Trussites and bring in a new team, but Sunak is likely to extend the olive branch to other camps as well as surprise supporters from the right of the party. That said, no reshuffle ends without creating new enemies.
- Halloween*: the Medium Term Fiscal Plan promised by former chancellor Kwasi Kwarteng should be published as planned on 31 October, presumably by Hunt. There may be Tory complaints about belt-tightening, but after Trussonomics’ failure relief among MPs at even the appearance of competence will dominate.
- Honours and by-elections: with Nadine Dorries and others expected to move into the House of Lords, there could be a few tough tests in the coming months, before….
- 4 May, when local elections will give a sense of how the Star Wars fan who went to Winchester and married a billionaire is faring among voters who can’t pay their bills at a time when Labour leads by 30 points in polls. It will be a stern test of aspirational politics for both sides, as Labour’s Wes Streeting acknowledged: “There are children in my constituency this evening who turned on the news to see someone like them about to become our country’s prime minister,” he said this morning. “I think that’s a wonderful thing.”
*Words that may come back to haunt him: “We inherited a bunch of formulas from the Labour Party that shoved all the funding into deprived urban areas. That needed to be undone. I started the work of undoing that.” Sunak to Tory activists, Tunbridge Wells, 5 August 2022.
CAPITAL ECONOMY, BUSINESS AND FINANCE
Chinese fire escape
Everyone except readers of Chinese state media may be aware that there was a huge sell-off in Chinese assets yesterday, after President Xi Jinping cemented his control over the ruling Communist Party and stacked loyalists into top positions of power. Chinese stocks sank in the biggest single-day drop since 2008 in Hong Kong, while the renminbi fell to a 14-year low against the dollar. It’s not just financial investors who are making for the exit – some of the richest families in China are instructing their lawyers to “execute their fire escape plans”, says the FT, amid concerns of a rumoured wealth tax and fears for their personal safety. The destination of choice is Singapore, where “family offices” – private businesses set up to manage personal wealth – have almost doubled from 400 in 2020 to 700 last year, according to Citi Private Bank. Xi will probably have known this would happen, not least by looking at Russia. The signs are he doesn’t care.
TECHNOLOGY AI, SCIENCE AND NEW THINGS
Bess up
Buy cheap, sell dear. It’s the best business model out there, and it could make a reality of implausibly large batteries. Until not long ago batteries were considered too heavy and expensive to solve the problem of wind and solar intermittency at scale. That would have to be done with compressed green hydrogen produced by the electrolysis of water with super-abundant renewable power. Then Elon Musk installed a village-sized battery for back-up power for 30,000 homes in South Australia, and the dream of charging from the grid for next to nothing at dead of night and discharging to the grid for a handsome profit at kettle-boiling time was born. Now a British business called Gresham House Energy Storage is building 28 giant batteries housed in rows of shipping containers across the UK to take advantage of what the Times’ Patrick Hosking calls an “arbitrageur’s dream”. Wholesale UK power prices can swing from minus £100 to plus £4,000 per megawatt-hour in a few hours. GHES is worth £800 million and counting.
The 100-year life health, education AND GOVERNMENT
Forgotten flu
A highly pathogenic new strain of bird flu is decimating captive and wild bird populations. The FT reported in August that this new strain of H5N1 bird flu had killed more than 86 million birds in the US and Europe alone, mainly as a result of poultry culling. The risk of transmission to humans remains relatively low; it can only be caught by touching infected birds, and the WHO reports that from 2003 to 2022 there had only been 456 fatalities. But the real risk is to humans is to food security; so many captive birds are being culled in the US that in 73 per cent of cases, farmers have resorted to the “ventilation shutdown method” which kills animals by sealing off the airflow to poultry sheds and increasing temperatures to lethal levels. European officials say this method should not be used in the EU. The humane alternative would be to vaccinate the birds, which one UK breeder who’s lost 100,000 said yesterday is feasible. The trouble is it isn’t legal. UK officials say they’re looking into it.
Our planet CLIMATE AND geopolitic
Northern sea routes
There is still a cold place on Planet Earth. Siberia may burn and swimmers may take summer dips at the North Pole but even with 2 degrees of warming, even in summer, there will still be ice in the Parry Channel. This runs east-west south of the remote Inuit settlement of Resolute but across the top of the rest of Canada. It would be the easiest version of the Northwest Passage to navigate, but for the ice. New research published in the journal Anthropocene confirms new shipping routes will open up north of Siberia as warming races past 1.5 degrees three times faster in the Arctic than the global average. But according to the researchers’ models even in this scenario the surface air temperature will stay below zero in the Parry Channel in September, the month of minimum sea ice. The Northwest Passage will open up further south, but with greater risk of running aground and getting lost.
CULTURE soCIETY, IDENTITY AND BELONGING
Brazil’s election violence
A Brazilian politician has been arrested after throwing grenades at police. Roberto Jefferson, an ally of far-Right President Jair Bolsonaro, wounded two officers during a long siege after they arrived at his Rio de Janeiro house to arrest him for insulting a judge. He has now also been charged with attempted murder. Bolsonaro, who faces former President Lula da Silva in a run-off election this Sunday, quickly distanced himself from Jefferson, saying “there’s not a single picture of him and me” – a tactic that quickly backfired when photos emerged of him with Jefferson at the presidential palace. “What we saw on Sunday could well be the prelude to a new wave of political violence, in particular amongst groups who won’t accept the election result if President Bolsonaro loses,” said Mauricio Santoro, a political scientist at the State University of Rio de Janeiro. The latest polls put da Silva 6 to 7 percentage points ahead – but nearly all of them significantly underestimated Bolsonaro’s support in the first-round vote.
Thanks for reading. Please share this round, send us ideas and tell us what you think. Email sensemaker@tortoisemedia.com.
Catherine Neilan
@CatNeilan
Additional reporting by Sebastian Hervas-Jones, Giles Whittell, Jessica Winch.
Photographs Getty Images
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