Rishi Sunak on Tuesday became Britain’s third prime minister in the space of two months and issued a bleak warning on the steps of Downing Street: “Our country is facing a profound economic crisis.”
Sunak, who was invited to form a government by King Charles on Tuesday morning, said he would prioritise “economic stability and confidence” but said: “This will mean difficult decisions to come.”
The former chancellor arrived in Downing Street after several months of turmoil. Boris Johnson resigned in July following a series of scandals while Liz Truss, who became prime minister on September 5, quit after her economic policy had to be unwound after it sent markets into a tailspin.
Sunak said Truss had made mistakes and he was standing in Downing Street “in part, to fix them”. A new fiscal plan is expected next week, which will aim to reassure markets that debt is under control.
Sunak said he would act with “compassion” but that he would not let future generations pay for debt that “we are too weak to pay ourselves”.
In contrast to Johnson’s shambolic administration, Sunak promised: “This government will have integrity, professionalism and accountability at every level.”
Aged 42, he is Britain’s youngest prime minister in modern times and the first British-Asian person to lead the country. Sunak has been an MP for only seven years and is about to be tested in extremely tough political circumstances.
With opposition parties demanding an immediate general election, Sunak claimed he derived his legitimacy from the 2019 Tory manifesto, upon which Johnson built an 80-seat majority.
The new prime minister said he would deliver that manifesto’s commitments on a stronger NHS, safer streets, better schools, environmental protection and the “levelling up” of Britain’s unequal economy.
“I have work to do to restore trust after all that happened,” he acknowledged, but insisted: “I am not daunted.”
Earlier, Truss gave her final speech as UK prime minister, urging Sunak to be “bold” and making no apology for the chaos that engulfed her party and the markets during her brief time in office.
Speaking in Downing Street, she suggested that Sunak should follow her policy agenda of low taxes, while pursuing “Brexit opportunities”. Vowing to continue as MP for South West Norfolk, she said: “I know that brighter days lie ahead.”
She made no mention of her disastrous September 23 “mini” Budget, with its £45bn of debt-funded tax cuts. Sterling plunged, gilt yields rose, the Bank of England was forced to intervene and she sacked her chancellor.
Sunak will on Tuesday afternoon begin forming his first cabinet. Jeremy Hunt, the current chancellor who immediately began demolishing Truss’s economic plan, is widely expected by Tory MPs to continue in his job.
Hunt has planned to unveil a new fiscal plan next week, showing how the government will cut debt as a share of gross domestic product in the medium term, ahead of a Bank of England decision on interest rates on November 3.
Michael Gove, Kemi Badenoch, Oliver Dowden and Suella Braverman are among Sunak’s supporters who are hoping for big jobs.
Sunak faces big challenges, including the UK economic downturn and cost of living crisis, the repercussions of Brexit and Russia’s invasion of Ukraine.
Addressing Conservative MPs on Monday, he said the party needed to “unite or die” following its ratings plunge in opinion polls. “We get one shot. No second chances. This is an existential moment,” he added.