New UK Prime Minister announced… again

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Rishi Sunak is set to become the new Prime Minister after Penny Mordaunt has pulled out of the Conservative leadership contest. He will become the UK’s first non–white and the youngest Prime Minister (42) for more than 200 years.

Sunak has won the race to succeed Liz Truss as PM, as the only MP to receive more than 100 nominations from MPs.

Boris Johnson pulled out of the Conservative leadership contest after he accused Sunak and other Tory leadership candidate Penny Mordaunt of failing to come together in the national interest after they rebuffed his attempts to strike a deal.

Senior Tory party MPs Priti Patel, James Cleverly and Michael Gove switched their support to Rishi Sunak.

Rishi Sunak ‘s Insights and policy approach

•The new PM has promised “Integrity, professionalism and accountability” as Prime Minister•He is a fiscal conservative who vows to “fix the economy”.•Was Chancellor of the Exchequer in February 2020.•He won praise during the pandemic for introducing support schemes to keep jobs and businesses afloat. Through scheme such as “Eat Out to Help Out”•Faced criticism when his wife held non–dom status while lead to him facing accusation that his personal circumstances made him unsuitable candidate to take over and tackle the cost–of–living crisis.•His resignation as Chancellor in July 2022 sparked a ministerial exodus that led to Boris Johnson’s resignation.

Tax

•Wants to present himself as traditional low–tax Tory and pledged to drop the bottom rate of income tax from 20% to 16%.•Has pledged to put up corporation tax from 19 to 25 percent.•Imposed a four–year freeze on income tax thresholds, an effective tax that was set to raise £21 billion.•Is unlikely to deviate from Jeremy Hunt’s U–turn on tax

Spending

•Rishi Sunak’s final mini budget in March included £17 billion in cuts because he made spending decisions in cash terms and did not include any allowance for soaring inflation

Cost of Living Crisis

•The new PM said he would spend £5 Billion cutting VAT from energy and a further £5 billion to help pensioners and the poorest through existing benefits systems such as Universal Credit.•He previously pledged to temporarily scrap VAT on energy bills from October

Climate Change & the environment

•Rishi Sunak is firmly stuck to the target of making UK energy independent by 2045.•In the summer he stated “We need more offshore wind, more rooftop solar and more nuclear” but is less keen on solar farms and onshore wind.•He has pledged to streamline planning and licensing rules for green energy to help achieve that goal.•As Chancellor, he cut VAT on home insulation measures

Foreign Policy

•Backed Brexit from the beginning, but is pragmatic and considered and wants a negotiated solution to the NI protocol•He appears to have taken a more aggressive stance on China than Liz TrussNHS and Social Care Spending•He insisted on rising the National Insurance contributions to pay for clearing of the NHS backlogs and to fund social care spending.

Market Reaction to Johnson’s Dropout and leadership Contest

•The pound and British government bond rose due to Mordaunt’s withdrawal.•Against the dollar, the pound rose slightly by 0.15%•The pound gained 0.4% against the dollar in $1.1344 in morning trading in London, and advanced 0.5% against the euro to 1.1519 in the aftermath of Johnson dropping out.•Derek Halpenny, head of research for global markets at MUFG bank said that Sunak “stands a much better chance of bringing stability to government”

Rishi Sunak and the NI Protocol

•He said he would also “seek to talk to Europe, Ireland and the French to see if we can find a negotiated outcome”•He stated there was “probably not an enormous amount of disagreement” between him and Truss on the restoration of Stormont.•In August 2022, the new PM was asked “Will he fully defend the NI Protocol Bill through the rest of its passage in Parliament?”. “Absolutely, yes, under my leadership, the NI Protocol Bill will continue to make its way through Parliament. If negotiation with EU doesn’t deliver what we need it to, the bill will become law”.•Northern Ireland Minister, Steve Baker and Simon Hoare chairman of the Northern Ireland affairs select committee stated in the The Times yesterday (23th Oct) that as Prime Minister, Rishi Sunak can fix the NI protocol.•Northern Ireland Secretary Chris Heaton Harris backed Rishi Sunak after having backed Boris Johnson initially.

ERGs MPs

•At the conclusion of the ERG meeting on a new PM, Mark Francis the Chairman, said the group could not come to an agreemnt and he said they were “unable to endorse either candidate”.•For the ERG, the issues around NI and the protocol is one of the most important.•The group agreed to give whoever became the PM their “full support”.

First Speech

•In his first speech Sunak warned of “profound” economic challenges ahead but called on Conservatives to unite to form a stable government•He pledged to serve with “Integrity and humility”

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