Rishi Sunak: the leader who foresaw the financial chaos he now inherits

Rishi Sunak’s “coronation” as Tory leader less than two months after losing out to Liz Truss is the most rapid political comeback in modern history.

As a British Asian, he sets records as he will become the UK’s first prime minister who is not white, the first Hindu in the top job and, at 42, the youngest PM for more than 200 years.

Vindicated in his warnings of catastrophe over Ms Truss’s tax-cutting agenda, it was the former chancellor’s economic experience that precipitated his resurgence.

But his record-breaking biography is also bound to create political challenges at a time when he will have to make potentially punishing decisions during a cost-of-living crisis.

He will arguably be the richest prime minister, sitting on a family fortune of about £730 million, meaning the occupants of No 10 Downing Street will be far richer than the King.

Mr Sunak won the rapid Tory leadership contest on Monday by a “coronation” after rival Penny Mordaunt withdrew after Boris Johnson had pulled out of his own attempt at a comeback.

He secured the public backing of the majority of his colleagues and was spared facing the party membership that comfortably backed Ms Truss over him on September 5.

In that contest, he positioned himself as the candidate prepared to tell hard truths about the state of public finances rather than the “comforting fairy tales” of his rival.

Mr Sunak argued that her unfunded tax cuts at a time of spiralling inflation were dangerous, predicting they would lead to surging mortgage rates.

https://twitter.com/RishiSunak/status/1584114970723512321?ref_src=twsrc%5Etfw

He was right. Ms Truss’s disastrous mini-budget triggered turbulence in the financial markets, sending the pound tumbling and forcing the Bank of England’s intervention.

He did not crow “I told you so” and instead kept a low profile during the weeks that followed, staying away from the Tory conference overshadowed by infighting and a U-turn on the abolition of the top rate of income tax.

The scale of the market shock only strengthened his backers’ pitch to Tory MPs that his “calm competence” showed he is a “serious person for serious times”.

Born in 1980 in Southampton, the son of parents of Punjabi descent, Mr Sunak’s father was a family doctor and his mother ran a pharmacy, where he helped her with the books.

After private schooling at Winchester College, where he was head boy, and a degree in philosophy, politics and economics at Oxford, he took an MBA at Stanford University in California where he met his wife, Akshata Murty, the daughter of India’s sixth richest man.

A successful business career, with spells at Goldman Sachs and as a hedge fund manager, meant by the time he decided to enter politics in his early 30s he was already independently wealthy.

In 2014 he was selected as the Tory candidate for the ultra-safe seat of Richmond in North Yorkshire – then held by William (now Lord) Hague – and was duly elected in the general election the following year.

In the 2016 Brexit referendum he supported Leave, to the reported dismay of David Cameron who saw him as one of the Conservatives’ brightest prospects among the new intake.

Given his first Government post, as a junior local government minister, by Mr Cameron’s successor, Theresa May, he was an early backer of Mr Johnson for leader when she was forced out amid the fallout over Brexit.

When Mr Johnson entered No 10 in July 2019, there was swift reward with a promotion to the Cabinet as treasury chief secretary.

An even bigger step up followed in February 2020 when Sajid Javid quit as chancellor and Mr Sunak was put in charge of the nation’s finances, at the age of just 39.

The rapid spread of Covid-19 meant his mettle was swiftly tested. Within a fortnight of his first Budget he was effectively forced to rip up his financial plans as the country went into lockdown.

The new chancellor, who saw himself as a traditional small-state, low-tax Conservative, began pumping out hundreds of billions in government cash as the economy was put on life support.

But as the country emerged from the pandemic, some of the gloss began to wear off, amid growing tensions with his neighbour in No 10 and anger among Tory MPs over rising taxes as he sought to rebuild the public finances.

To add to his woes, he was caught up in the “partygate” scandal, receiving a fine, along with Mr Johnson, for attending a gathering to mark the prime minister’s 56th birthday, even though he claimed only to have gone into No 10 to attend a meeting.

There were more questions when it emerged his wife had “non-dom” status for tax purposes, an arrangement which reportedly saved her millions, while he had retained a US “green card”, entitling him to permanent residence in the States.

For a man known for his fondness for expensive gadgets and fashionable accessories, and who still has an apartment in Santa Monica, it all looked dangerously out of touch at a time when spiralling prices were putting a financial squeeze on millions across the country.

His frustrations with Mr Johnson’s chaotic style of government, as well as a deepening rift over policy, finally spilled over when he dramatically resigned, prompting the rush for the door by other ministers which forced the prime minister to admit his time was up.

Mr Sunak was unrepentant over his decision to quit, even as he admitted that it was a decision that may have damaged his standing among a grassroots that picked Mr Johnson as prime minister only a few years earlier.

Knowing his popularity with the membership, Mr Johnson plotted a return to No 10 after Ms Truss’s demise.

But despite having jetted back from a Caribbean holiday to fight for the top job, he threw in the towel as Mr Sunak surged in picking up the support of Tory colleagues.

The need to maintain power at the top of a parliamentary party that is on to its third leader in less than two months is now Mr Sunak’s problem.

And he must improve the Conservatives’ plummeting poll ratings, with a general election about two years away and their reputation for financial responsibility shattered.

All this while inheriting a nation in a bleaker financial position than at his first attempt.

Mr Sunak will also need to keep a beady eye on the backbenches, with Mr Johnson slinking back to them with his leadership ambitions shelved for now, but appearing entirely unchastened.