Comeback kid

Yesterday Rishi Sunak was declared leader of the Conservative Party after becoming the only candidate to secure enough MP nominations to qualify for the position.

His victory was all but guaranteed after former Prime Minister, Boris Johnson, stunned friends and foe alike by announcing that he would not stand in the contest. Sunak's only remaining rival, Penny Mordaunt pulled out at 13.58. The Chairman of the now infamous 1922 Committee declared Rishi Sunak leader of the Conservative Party just after 2pm yesterday afternoon, setting in motion the formal process to anoint Sunak Prime Minister.

Today - Liz Truss will tender her formal resignation to the King, after which the monarch will meet with Rishi Sunak to ask him to form a Government. Sunak will arrive at Downing St and address the nation for the first time as Prime Minister. He will then begin to appoint his Cabinet and will aim to have all appointments made ahead of his first outing at Prime Minister's Questions on Wednesday.

Rishi, set, go

So what can we expect from a Sunak premiership? Just two short months ago we had a pretty good idea. Sunak had spent the summer touring the nation and setting out his vision for the economy. But that was then, and this is now, and both the economy and the Conservative Party are in a vastly different place to where he left them.

Nonetheless, we wouldn't expect Sunak to deviate wildly from the platform he stood on the first time around. Here's what he said last time:

  • Tax and spending

Like Truss, Sunak positioned himself as a traditional low-spend, low-tax Tory. Unlike his predecessor, however, he insisted he would "never get taxes down in a way that just puts inflation up", suggesting the tax cuts he would implement (including cutting the basic rate of income tax from 19 to 16 per cent) wouldn't come into force until the end of the next Parliament in 2029.

He was also the architect of two major tax hikes binned by Truss - the 1.25 per cent rise in National Insurance contributions and a 6 per cent rise in corporation tax. It remains to be seen whether Sunak will reinstate those policies as quickly as Truss binned them, but the country's finances are tight and Sunak will be keen to do everything in his power to regain the market's confidence.

  • Energy and net zero

Sunak is a supporter of the 2050 net zero target and has pledged to make the UK energy independent by 2045. He's called for more offshore (but not onshore) wind, rooftop solar and nuclear power, and stressed the urgency of insulating homes. All eyes will be on the new No. 10 to see whether he extends the beefed-up household relief scheme that was curtailed by Truss.

  • Levelling Up

Sunak himself represents a seat in the North, and knows that the red wall remains a barometer of political success. He will want to be seen to deliver priorities for his colleagues who won for the first time in 2019.

What does this mean

Sunak is a fiscal Conservative, his main priority will be to restore trust in the management of the economy, an area he knows is essential not only for market stability, but for future votes. He will also want to restore party order and bring the different wings of the party back together and, having been a Brexiteer, will feel he is well suited to doing this. However, he will be sensitive to the fact that many of those who supported Boris will see Rishi as the man responsible for Johnson’s downfall.

There will also be a sense that Sunak’s focus must be on the delivery of manifesto pledges – especially Levelling Up. What remains to be seen is whether ideas such as freeports, investment zones, and shared prosperity funding remain as policy.

Sunak will now go about building his team. There is an expectation that the new Cabinet will reflect a return to rewarding talent and experience rather than just loyalty. Additionally, it is expected that some current Cabinet members to remain in place; our money is on Jeremy Hunt and Grant Shapps both remaining in their roles, with a mixture of Sunak backers and Boris/Penny supporters welcomed to the fold. The absolute focus of the new government will be on rebuilding economic stability, and the selection of the top team is crucial to achieving this.

All of this means lots of engagement. His team wants to rebuild bonds with business and the confidence of UK plc in order to address the economic headwinds the UK is facing, and they understand that communicating the government’s agenda more clearly and consistently is key to achieving that. The first example of this will be how he manages Monday’s ‘fiscal event’. There will then be a focus on message and policy discipline which hasn’t existed since Johnson and Truss pushed through their highly ideological agendas.

Today has the potential to bring to an end one of the most extraordinary and unsettling periods in British political history.