Factbox: What is Rishi Sunak’s solution to Britain’s problems?

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LONDON, Oct 24 (Reuters) – Britain’s next Prime Minister Rishi Sunak has said little publicly about how he intends to lead the country and how it will weather multiple economic and political crises.

Sunak ran unsuccessfully for prime minister earlier this year, establishing a comprehensive political platform. Although some of the challenges have changed since then, what does this campaign tell us about how he will govern?

ECONOMIC CHALLENGES

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Britain faces an economically toxic combination of recession and rising interest rates. The Bank of England is trying to rein in double-digit inflation as consumers grapple with rising costs and falling real incomes.

Britain must restore its international financial credibility after outgoing leader Liz Truss’ plan for unfunded tax cuts and a costly energy price guarantee spooked the bond market last month and forced the Bank of England to intervene.

To balance a budget deficit made worse by rising borrowing costs caused by the crisis, the next prime minister will most likely have to oversee spending cuts and tax hikes. A financial statement on this is expected on October 31.

It comes as the government faces pressure to help vulnerable households through a painful financial crisis, with rising mortgage costs on top of rising food, heating and fuel prices caused by the war. in Ukraine and other global factors.

ECONOMIC POLICIES

In a statement on Sunday announcing his candidacy, Sunak said the country was facing a “deep economic crisis”.

As finance minister between February 2020 and July 2022, he put Britain on track to have its biggest tax burden since the 1950s. He also planned higher public spending but simultaneously promised more discipline and reduce waste.

During the summer leadership campaign, he criticized Truss’s tax-cutting program, saying he would only cut taxes once inflation was brought under control. At the time, he presented a plan to cut income tax from 20% to 16% by 2029.

Sunak supported the independence of the Bank of England and stressed the importance of government policy working alongside the central bank to control inflation, not exacerbate it.

POLICY CHALLENGES

One of Sunak’s first challenges will be to show he can control a Conservative party that has a large majority in parliament but is torn by factions that differ on key issues like Brexit and immigration as well as economic management.

Higher taxes will be strongly opposed by some party members; others will oppose spending cuts in key areas like health and defence.

Winning the leadership race is just the first step in unifying a party that ousted its last two leaders over internal disputes and has spent years arguing over how to leave the union European.

Sunak backed Brexit in the 2016 referendum, but is still seen by some on the right of the party as too pro-EU.

The key issue of trade with Northern Ireland is still being negotiated with Brussels. Sunak will face pressure to secure a deal that rewrites parts of the original exit deal without giving in to a lasting EU scrutiny over trade between Britain and Northern Ireland.

He will also face calls to follow through on government promises to control immigration to the country, an issue that many conservative lawmakers see as key to winning over voters in the upcoming election.

POLICIES POLITICS

Sunak’s campaign launch statement on Sunday said he wanted to “fix our economy, unite our party and deliver for our country.”

On Northern Ireland, Sunak had previously said he would pursue legislation to unilaterally overturn the Brexit deal while trying to negotiate with the EU. The bill, currently in parliament, has been strongly criticized by the EU.

On Brexit more broadly, in August he promised to “protect Brexit” and set up a new government unit to review EU regulations that still apply in UK law.

In the summer leadership race, he said he was proud to come from an immigrant family, but he believed Britain needed to control its borders and would maintain a plan to deport claimants asylum to Rwanda.

He also refused to rule out Britain’s withdrawal from the European Court of Human Rights.

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Reporting by William James Editing by Elizabeth Piper and Mark Potter

Our standards: The Thomson Reuters Trust Principles.

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