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BCW Political Insights: And then there were two…July 21, 2022

Following yesterday’s voting we now know that Rishi Sunak and Liz Truss will face off to become Prime Minister.

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Following yesterday’s voting we now know that Rishi Sunak and Liz Truss will face off to become Prime Minister.

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The Results

Following yesterday’s voting we now know that Rishi Sunak and Liz Truss will face off to become Prime Minister. The former Chancellor and current Foreign Secretary have radically different views on the solution to the cost-of-living crisis, and their campaigns will be looking to make them as distinct as possible in the eyes of the “selectorate.”

What happens next?

The schedule as it’s reported currently is:

July 25th: BBC Debate

August 1st-5th: Ballots distributed to members

August 1st – Husting (Exeter)

August 3rd – Husting (Cardiff)

August 4th – Sky News Debate

August 5th – Husting (Eastbourne)

August 9th – Husting (Darlington)

August 11th – Husting (Cheltenham)

August 16th – Husting (Perth)

August 17th – Husting (Northern Ireland)

August 19th – Husting (Manchester)

August 23rd – Husting (Birmingham)

August 25th – Husting (Northwich)

August 31st – Husting (London)

September 5th: Results announced

Analysis
With two candidates selected, Conservative MPs hand the fate of the party over to Conservative HQ and Conservative members. Crucially, it has been decided that members will be able to change their vote: With online voting and paper ballot allowed, it will be the last vote issued by each member that counts. Whilst many members are expected to vote early - soon after they receive their ballots at the beginning of August - a major gaffe, or striking policy announcement could change the whole race. This will be a marathon – not a sprint.

Both candidates are expected to front-load announcements, and the airing of skeletons in the closet that many expect, is likely to happen sooner rather than later.

Team Sunak
Rishi Sunak won the support of the largest number of MPs – and has a wide range of senior support including Deputy PM Dominic Raab, and at least four former chief whips, including Mark Spencer, Julian Smith, Gavin Williamson and Mark Harper. One of those, Gavin Williamson, is seen as having masterminded the victory at the parliamentary stage of the leadership election for both Theresa May and Boris Johnson. He has now made it three for three through to the final two.

Sunak’s campaign is being spearheaded by Liam Booth-Smith, his chief of staff, along with his special advisers from the treasury, including Cass Horowitz – his social media adviser who is credited with creating ‘Brand Rishi’ and also Sunak’s well-crafted launch video – apparently put together in just 48 hours from when Johnson announced his resignation.

Sunak goes into the campaign with a difficult tight-rope to walk, Economically far more right wing than events have forced him to be, he contrasts directly with Truss in his reticence to cut taxes – fearing the potential for spiralling inflation caused by an increase of capital in the economy. Ideologically, having been a Treasury minister for the majority of his career in parliament, ‘Rishi-ism’ is far less clearly defined than ‘Truss-ism’, but his pro-Brexit, pro-innovation, and pro-business stances demonstrate he is far more of a traditional Conservative than some of his detractors painted him as being during the campaign.

Team Truss
Truss’ team pulls from across the world of Westminster, with a quad of Ruth Porter, Jason Stein, Adam Jones and Sophie Jarvis among her lead advisers.

In parliament, she is backed by big beast Brexiteers like Rees-Mogg, Dorries, and former chief Brexit negotiator Lord Frost.

Despite having voted remain, a decision she says she has now come to ‘regret’, Truss is arguably the candidate who has done the most to shape the post-Brexit reality, having negotiated trade deals and the future relationship between the EU and the UK with regards to Northern Ireland. Joining the campaign, she said she would ‘fight the election as a Conservative and govern as a Conservative’ – a statement she believes means both corporate and personal tax cuts, and a drive to deregulate the economy to encourage growth.

Policy
In terms of policy, there are areas of clear blue water between the candidates:

Fiscal
Sunak:
Vowing to stick with a host of recent tax rises to balance the books, and to stop runaway inflation caused by a glut of money in the economy. Criticises Truss extensively on this point.

Truss: Will ‘start cutting taxes from day one’ including overturning a 6% hike in corporation tax. Most strikingly, she wants to launch a review of the Bank of England’s mandate to set interest rates independently – a reversal in the policy of successive governments since 1997.

Home Office
Sunak and Truss:
Both support the Rwanda policy on immigration.

Ministry of Defence
Sunak:
committed to current defence spending levels.

Truss: Size of the army is ‘up for review’ and pledges to move toward 3% of GDP spent on defence by end of 2020s.

Department for Housing, Levelling Up & Communities
Sunak:
Committed to the Northern Research Group’s pledge card on levelling up.

Truss: Committed to the Northern Research Group’s pledge card on levelling up and goes further with plans to reduce red-tape to allow developers to build on brownfield sites.

Also committed to scrapping local authority housing targets to be replaced with incentives to build new homes.

BEIS
Sunak:
Committed to Net Zero by 2050, and pledged to create a separate Department for Energy to lead on reforming the energy market, alongside energy self-sufficiency for the UK by 2045.

Truss: Committed to Net Zero by 2050, but with a review on the fracking ban.

DCMS
Sunak: Replace GDPR with a UK Data Protection Regime, opposes those identified as biologically male at birth being allowed to compete against women in sport, would scrap BBC License Fee.

Truss: Committed to ensuring the ban on conversion therapy does not include trans people, and overhauling EU regulation to allow pension funds to invest in high tech start-ups.

The PM’s In-Tray
When the next Prime Minister is announced on September 5th, the new leader will face a formidable range of topics for immediate consideration. There will be a huge energy price hike within just weeks of having taken office, spiralling NHS waiting lists, a crisis of confidence in the police, fears about educational attainment in ‘Generation COVID’, the rise of in-work poverty, decisions to be made about the future of public transport, as well as decisions to be made on the future of bills already in parliament.

Opportunities for Business
There are 24 months ahead of the next election. Both candidates will need to differentiate themselves from what has come before and will be seeking to court the business community. Targeted engagement with both campaign’s senior leadership could pay dividends. Whomever becomes Prime Minister will have the greatest political capital to effect change right at the start of the premiership, so now is the time to reach out with specific policy requests. However, knowing how to make your request politically useful, and also achievable, is critical. That’s because neither candidate can wriggle away too much from the 2019 manifesto without an election so be prepared for the policy agenda and the bills in parliament already to continue in some shape or form.

Away from the campaigns, the government in Westminster will be on a ‘night watchman’ footing until September, . with no new major decisions expected unless forced by a major crisis. Ministers will not be seeking to make new policy, but civil servants will continue to execute existing decisions.

Engagement with those civil servants, who will be there long after their current masters are gone, will be much more effective than speaking to ministers.

Parliament is in recess from tomorrow, with the business of both houses on hold until after the new Prime Minister is in post.

A final word from BCW Senior Adviser, John McTernan, about the long-term implications of the leadership race:
“Opposition research – the task of digging the dirt on your political rivals – is normally a painstaking, dry as dust task. Researchers beaver through the archives – both in print and in the ever-widening digital record – in search of gaffes and damning quotes.

“This summer the Labour Party has simply reached for the digital recorder and the popcorn and watched the Tory leadership campaign instead. There have been so many ‘blue on blue’ attacks to pick from. Over the next few weeks the pickings will just get richer as the Tory race goes to the membership.

“It’s a cliché to say that oppositions don’t win elections, but governments lose them – but all clichés have a basis in fact, and this run-off vote isn’t just picking the next Prime Minister, it’s also picking the next leader of the Opposition.”

Conclusion

Former Conservative leader Lord Hague said he ‘wouldn’t wish this job on anyone’ right now. Describing it as the worst time to be Prime Minister since 1945, there is a sense that the next leader of the country must be prepared to manage crises on many fronts. No one will argue that a Chancellor of the Exchequer or Foreign Secretary is underqualified for the job, but which type of leader the Conservative Party goes for will determine whether the party maintains its grip on power into an unprecedented fifth term of office, or falls finally to a resurgent opposition: 14 years of government ended.