If at first you don’t succeed: What sort of prime minister will Rishi Sunak be?

The former chancellor will have the daunting task of clearing up the mess he predicted

If at first you don’t succeed… Rishi Sunak has tried again and is now going to be the UK’s next prime minister. Only seven weeks after Conservative Party members rejected him and inflicted Liz Truss on us, the former chancellor has bounced back much sooner than he ever thought possible.

Indeed, some of Sunak’s allies thought it would never happen. The words of Jeremy Hunt, who twice ran unsuccessfully for the leadership, rang in their ears: “You only get one shot.” Tory grassroots members do not like to admit they got it wrong, but they made a catastrophic mistake in ignoring Sunak’s repeated warnings that Truss’s unfunded tax cuts would spook the financial markets and end in disaster. Truss branded him a “doomster” – but rarely has a politician been proved so right, so soon.

So Sunak will have the daunting task of clearing up the mess he predicted. Thanks to Truss’s failed experiment, the state of the public finances is worse than if Sunak had won this summer’s contest. There is an estimated black hole of £40bn to fill to show that debt is falling in the medium term, meaning tax rises and spending cuts.

Hunt is expected to remain his chancellor. It is not always easy for the chancellor when the prime minister used to be at the Treasury, as Alistair Darling discovered when Gordon Brown was PM. Sunak and Hunt have a similar outlook, though Sunak is bound to want to make a few tweaks to the medium-term fiscal strategy Hunt is due to unveil on 31 October.

They know they cannot afford to fall out when the City is watching them like hawks. There was a positive reaction on the markets today after Boris Johnson withdrew from the Tory race. A Sunak-Hunt double act is a dream team for the markets, but not enough. Crucially, the markets will be looking for evidence they can administer the unpalatable medicine in the fiscal plan and win enough support from Tory MPs to secure Commons approval.

Relations with his mutinous MPs will likely prove Sunak’s biggest headache. He knows that on the most sensitive tax and spending issues, there could easily be a group of 35-40 Tory backbenchers against him – enough to defeat the government if they join forces with the opposition parties. The same equation will apply on some measures to boost growth – for example, allowing more housebuilding.

Sunak has many enemies on the Tory backbenches. He is widely blamed for bringing down Johnson – unfairly. Although he and Sajid Javid resigned first, another 60 ministers and aides followed. While Johnson will publicly rally behind Sunak, his withdrawal statement left no doubt about his future ambitions. If Labour remains clearly ahead in the opinion polls, how long before the first media report that Johnson allies are plotting a vote of confidence in Sunak?

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Of course, the faction-ridden Tories might finally come to their senses, recognise that the public’s patience with them has already reached breaking point, and accept Sunak will lead them into the general election. But I wouldn’t bet on it. The parliamentary party has become ungovernable since David Cameron gave in to the troublemakers and granted them an EU referendum.

Some Sunak allies suggest he could threaten his enemy within with an early general election in an attempt to keep them in line. But that would cut little ice with the hardcore rebels. One of them, Christopher Chope, even called for one today, claiming Sunak did not have a mandate. But he is a maverick; although there should be an election now, I doubt there will be one before 2024.

Sunak will try to calm his party down by appointing a cabinet of all the talents and factions – learning from the mistakes of both Johnson and Truss, who relied on allies, supporters and friends, which propelled second-rate ministers into important jobs. However, there will not be enough posts to go around for the new PM to keep everyone happy. Those who miss out will be more likely to rebel against him.

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An MP for a mere seven years, Sunak likes to think things through and road-test ideas – the opposite of Truss. But he will have to take big decisions at breakneck speed, as he did at the Treasury during the pandemic. While the economy will dominate, Sunak’s in-tray is bulging. He will maintain the Johnson-Truss position on Ukraine but be wary about the Truss plan to hike defence spending to 3 per cent of GDP by 2030.

The good news is that Sunak will thankfully want to “reset” and improve relations with the EU – not before time. The bad news is that his record as chancellor shows he is a sceptic about some of the measures needed to hit the “net zero” target, while officially committed to it.

As for the voters, the “rich Rishi” label (he is the richest MP) might damage him with some, though not with many potential Tory voters. Looking out of touch during a cost of living crisis is more dangerous. Some Tories privately doubt his appeal in the red wall. But above all, Sunak will be judged on whether he can turn the economy around and offer hope of a better future by the election.

A very tall order, and one made much harder by Truss’s brief but destructive “new era,” as we already begin another one.