Return to Transcripts main page
Connect the World
Rishi Sunak To Become Britain's Next Prime Minister; Rishi Sunak Warmly Greeted At Conservative Party H.Q.; Liz Truss Resigns As U.K. Prime Minister After Six Weeks In Office. Aired 10-11a ET
Aired October 24, 2022 - 10:00:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(COMMERCIAL BREAK)
[10:00:38]
ANNOUNCER: This is CNN Breaking News.
MAX FOSTER, CNN ROYAL CORRESPONDENT: Hello. I'm Max Foster. We are at Abingdon Green in London outside the Houses of Parliament in the U.K. about
to get a new prime minister. Rishi Sunak soon to take the reigns.
JULIA CHATTERLEY, CNN INTERNATIONAL CORRESPONDENT: And I'm Julia Chatterley in New York bringing you the latest on Russia's war in Ukraine. The
protests in Iran and a wrap of China's Communist Party congress.
Rishi Sunak making history today. He's not just been chosen to head Britain's Conservative Party, which means he'll become the U.K.'s first
prime minister of color. Well, just take a listen.
(BEGIN VIDEO CLIP)
GRAHAM BRADY, CHAIRMAN, 1922 COMMITTEE OF TORY M.P.S: Good afternoon, as returning officer in the leadership election I can confirm that we have
received one valid nomination.
Rishi Sunak is therefore elected as leader of the Conservative Party.
(END VIDEO CLIP)
FOSTER: It's a moment of triumph but also challenge for the former finance minister after he officially is appointed to the role by King Charles. Mr.
Sunak faces what some political observers are calling a poison chalice restoring U.K. economic stability. Will take over after six weeks of chaos
under the departing Prime Minister Liz Truss. Just hours ago before Sunak's victory was announced, the wraps came off a U.K. economic report showing a
sharp drop in business expectations for the entire year ahead.
We're live in Downing Street where CNN's Bianca Nobilo is waiting. So tell us more about the next occupants of number 10. So, who is Rishi Sunak,
Bianca?
BIANCA NOBILO, CNN CORRESPONDENT: Well, we know him mainly in the U.K. for being the former chancellor, the man who presided over the economic support
packages during the COVID-19 pandemic. In fact, that's really the first time that he came to the public imagination, and he was recognized by the
wider British population. That's because he was lauded for the slick presentation that he gave in press conferences and how he was reassuring
and at times empathetic when he addressed the nation from within the government buildings behind me.
Before then, he was the chief secretary to the Treasury, a more junior ministerial role. So both of his government roles that have been
significant have revolved around the economy. So that's very relevant for the fact that he's taking on the helm now when the country is in what he
describes as a profound economic crisis. He is a trailblazer in the sense that he is the first prime minister of color, the first Asian prime
minister, the first Hindu Prime Minister.
But actually his path to power is as old as time. He attended a very prestigious school Winchester College. He then went on to Oxford to do PPE,
the most popular degree of all prime ministers at the most popular university where over half of Britain's prime ministers have been. He then
went on to do an MBA. He was to be the next leader of the Conservative Party when he did give a very strong performance during the pandemic.
But then, Max, his popularity took something of a nosedive and that was mainly because of a scandal or a lot of media coverage of his wife, Akshata
Murthy's non-domicile status. She is extremely wealthy woman, her father is the billionaire founder of Infosys. And Rishi Sunak came under fire because
of that. He was staunchly loyal and defended his father in law and his wife against attacks in the media.
But that's hampered his progress and popularity somewhat. He was criticized for being out of touch as well, because video surfaced of him being a
youngster referring to the fact that he didn't really have any working class friends, this juxtaposition of him being the wealthiest Member of
Parliament, one of the wealthiest people in the United Kingdom and then maybe not being able to relate to Brit suffering through a cost of living
crisis really did resonate with the media and the public at large.
But now he is going to take on the biggest job in the country. Prime minister at a time when lots of people in the country don't know if they
can afford their heating and food bills. He's told us so far that he believes that inflation has to get under control before taxes can be cut.
He is a fiscal conservative. And he's quite conservative across the board actually, when it comes to Brexit, immigration and other key issues.
He's also pledged that he will continue to support Ukraine in the way that Boris Johnson did. So I'm sure that we'll see no deviation there, Max. And
that's a very quick introduction to the man who will soon be prime minister.
[10:05:07]
FOSTER: Amazing. One of the things that people in this country remember about him is his immense wealth. There was a headline over the weekend that
he's richer than the king. That is seen as a pertinent point, because we're dealing with a cost of living crisis. And he sometimes looks out of touch,
law, that wealth, you know, he obviously made a huge amount of money himself from his hedge funds and working at Goldman's.
But a lot of it obviously is as a result of his father-in-law's wealth. And he actually use that, didn't he? As a -- as a narrative to say, well,
that's a truly conservative story because this father in law came from nothing and built this well.
NOBILO: He did. So this really came into the public discourse. During the previous leadership contest, when the candidates produced these very highly
produced slick videos about their background, there was a lot made in the media about how everybody was trying to emphasize the grittier or difficult
parts of their story that Rishi Sunak emphasized that not just his father- in-law but also his family being immigrants to the United Kingdom had worked exceptionally hard and therefore should be able to seize all the
opportunities that Britain can present to them.
And indeed, whenever he was challenged about his father-in-law's wealth, he maintained that he was extremely proud of what he'd achieved. And as you
say, it was completely congruent with conservative values that if you work hard, and opportunities are given to that any form of success is something
to be proud of. And he was very defensive of his wife as well. And we've seen that in a number of media interviews.
He speaks about his family quite frequently too. In the last leadership contest, he have frequently referred to his daughters in terms of their
influence on him and his policies on climate change, and that they speak to him a lot and inform some of his opinions, too. He mentioned his own family
when he wrote to the Ukrainians pledging support. He said that his family sends love to them.
So he's definitely bringing a bit more of a personal touch. And sometimes we see from prime ministers, Max.
FOSTER: What happens now to Penny Mordaunt, one would assume that there were some conversations and she's been offered a massive job?
NOBILO: One would might assume that because that can frequently be the case, especially if you get somebody concealing or dropping out last
minute. And there's a lot of horse trading that goes on behind the scenes with these leadership contests. I was told by members of Parliament who
back Rishi Sunak that he was deliberately trying to adopt a policy of not promising jobs.
He wants to reward jobs, any reshuffling he does based on merit alone and who is best to be in that role in the national interest. And that there
wasn't promises behind that, there weren't promises behind the scenes about oh, you support me and I'll give you this. That's their narrative, at
least. It might make sense to bring Penny Mordaunt in a significant role in the cabinet purely because she obviously does have the support of a chunk
of the party.
It -- difficult to know how much because her public declarations, I don't believe reached 30. Even though her team were suggesting to us that she'd
got over 90 nominations. But it would make sense to try and include big heavy hitters from different parts of the party in his governing approach.
And that's because one of the biggest criticisms that people launched at Liz Truss is that she did the opposite.
So without the mandate of the general election and without the support of M.P.s, she had more support from the Conservative Party membership. She
plowed ahead and basically populated her cabinet with loyalists. That didn't go down well and given the party is so fractured that simply isn't a
sustainable way to govern. So I would imagine we'll see a different approach from Sunak.
FOSTER: On that and the fractious nature of the party, Rishi Sunak very much represents one side of the party which isn't the Boris Johnson side of
the party and he was pretty much hated, wasn't he? By a lot of the Boris Johnson supporters. Is he the man to unite the party?
NOBILO: Well, when the conservative started speaking about the imperative of uniting the party last week when they were faced with the dismal
ignominious end of Liz Truss after a mere six weeks and the party openly fighting with each other in the media, Unity became the buzzword. But
almost no lawmaker that you spoke to you could tell you who that person would be. OK. So you want unity, well, who will be the person that's
perfectly place to bring that unity?
There wasn't a clear answer. So it's all going to be about the governing approach. It's interesting, because you correctly mentioned that there's a
lot of animosity between supporters of Boris Johnson and Rishi Sunak and his supporters, mainly because they blame them -- blame him for his role in
precipitating the downfall of Boris Johnson because his resignation was one of the most significant and instrumental ones that lead to Boris Johnson's
political demise.
But Sunak has made an effort to reach out to those Johnson supporters and as you've mentioned, we've seen heavy hitters from the Johnson camp such as
Priti Patel come out in support of Sunak.
[10:10:02]
So, the early indications suggest that quite a lot of previous Boris Johnson backers might get on board with the Sunak premiership. It all
depends on how much the conservatives recognize the sort of existential crisis of the party finds itself in. Even if they have personal
difficulties supporting Sunak, even if they have policy differences with Sunak in order to survive, in order to preserve their seats and have a
fighting chance for the next election. They do somehow need to find a way to unite and work together.
FOSTER: OK. Bianca, back with you later. Conservative M.P. George Freeman joins me now. You have worked very closely with Penny Mordaunt. And you've
also been involved in the process to convince her to step back. I mean, just describe what's happened over the last 24 hours.
GEORGE FREEMAN, MEMBER OF PARLIAMENT OF THE UNITED KINGDOM: Yes, I have to run Penny Mordaunt's campaign in the summer. We were narrowly short. I
think she's a very classy candidate. I think she's got an incredible back story and authentic conservative early Brexiteer who reaches out around the
country. But my advice during the last 24 hours has been, look, the turmoil in the financial markets, the importance of stability and unity, which now
has a real cost and instability and disunity.
Literally people pay with their mortgages. I don't think this is the time to have another week of internal conservative leadership contest and I was
urging her to pile in behind and join Rishi Sunak in a unity ticket and I'm pleased she has.
FOSTER: Presumably there are other advisors suggesting she should push to a wider conservative party vote that she could have beat Rishi Sunak there.
That's the feeling of many people in her account.
FREEMAN: I think that's right. I suspect she was very close to and probably had 100 votes. But I think she's judged the mood right. And yes, I mean,
this is why politics is so electrifying. There by small decisions go very big implications, but I think she's done the right thing because when you
see Suella Braverman, Steve Baker, Kemi Badenoch, people who have traditionally been on the harder right of the Conservative Party and not
perhaps natural Sunak guides, come across to Rishi yesterday.
FOSTER: And not Penny Mordaunt.
FREEMAN: I think that tells you that this party is ready to unite. And my advice to Penny was given that she was running on unity and stability to do
just that. And I -- I've just heard Rishi Sunak give his first speech to the Conservatives Party.
FOSTER: They tell us what he said.
FREEMAN: As prime minister and it was a very strong message, I think three key points. One, he paid tribute to all of his predecessors which needed
saying often sometimes doesn't, he did on this occasion. Secondly, he made the point that we are in the last chance saloon and --
FOSTER: As a party.
FREEMAN: As a party. And that this country requires us now to come together properly. And he got a thundering ovation. And he said, it won't be
comfortable for everybody. Unity means sticking behind the leadership. And then thirdly, he made a really important point that we won in 2019 on a
manifesto that was very popular. And I think part of Boris Johnson's big legacy is this leveling up this drive to spread growth and opportunity all
around this country.
And that we have to deliver that. And the response was phenomenal. Overwhelming. I haven't seen a response like that since 2010 when Cameron
arrived here. So I think we're off to a good start. But we've got a lot of work to do.
FOSTER: He's committed to keeping Jeremy Hunt, I believe, as finance minister, Chancellor of Exchequer. She wonders what sense of you've got
about the rest of the cabinet he might create? Or is he going to stick with the one he's got for in the name of unity?
FREEMAN: No, I think big changes coming. He was very clear today that he feels very strongly that -- and I do that this Conservative Party actually
has got a wealth of talent. This isn't a burnt out old, tired parties. Half the members have been elected in the last five years. And his job and he's
-- was very clear about it to build a government and a cabinet that reaches across and unites and takes the best talent from all wings. That was one of
Liz Truss's big mistakes.
FOSTER: Yes.
FREEMAN: It was a victory reshuffle.
FOSTER: She didn't take any of the Rishi Sunak supporters into her cabinet.
FREEMAN: No. In fact, only her supporters really.
FOSTER: Yes.
FREEMAN: Which -- I mean, if they'd had a universal monopoly on talent, that would have been one thing but they clearly didn't. So, I think very
clear statement, I would expect a big reshuffle. I think there'll be some senior voices -- senior figures in the cabinet I would expect to remain in
the cabinet. But I think he will want to show he's reaching out and bringing in people from all wings.
FOSTER: Penny Mordaunt to the foreign office, potentially?
FREEMAN: I can't -- I couldn't speculate really. I mean, I would have thought that's quite a natural position. I think, you know, if Jeremy Hunt
is a chancellor, basically, this is an international crisis of political and economic turmoil. Penny's got strong background, sexual state for
defense for international development, trade. I think Rishi, Jeremy Hunt, Penny Mordaunt, top three --
FOSTER: Ben Wallace defense.
FREEMAN: Ben Wallace a defense. I think that would be a very strong and stable group.
FOSTER: So why don't you bring in the ERG, that sort of right of the party?
FREEMAN: Well, I think it's a question of -- I mean, again, it's for the prime minister to decide. But I -- my instinct would be, you've played to
people's strengths and there'll be people like Steve Baker, Suella Braverman, there are others who are very intelligent and very capable
people in the right -- in the right role.
[10:15:08]
FOSTER: So you look at home office is the other big office of state, isn't it?
FREEMAN: Yes. Yes.
FOSTER: Might be someone from the right in that position.
FREEMAN: Yes. And I think, you know, given that we want to make very clear, we want to modernize and continue to support the NHS, many like me would
like to see it a more innovative and more modern but we absolutely committed to it as a mainstay, you know, you're probably going to want to
put somebody who is very strongly associated with good public services. So, I think he'll be smart about putting the right talent in the right place.
FOSTER: In terms of Liz Truss. How are people speaking with her now within the party and what happens to her?
FREEMAN: Honestly, we're not. And I think -- I think there's a degree of embarrassment and sympathy for her. And I would imagine that she'll want to
take some time and jaw breath, she must have had a pretty grueling last few months. I mean, she's a very strong champion for that sort of hierarchy and
monetarist low tax sort of economics of the right.
FOSTER: And we learned that.
FREEMAN: Didn't we learn that. I mean, I would suggest there's a time and a place for it.
FOSTER: Yes.
FREEMAN: Britain this autumn wasn't the right time. But I think internationally, she's probably got quite a -- quite a future talking to
the think tanks and maintaining flying that flag.
FOSTER: Just one last word. A lot of international headlines are, you know, making something of the fact that this is the first prime minister of
color. I know that wasn't a big debate in the election campaign. But that's something that we can take stock off at this point, isn't it?
FREEMAN: Yes. I think, you know, I've been in Parliament. 12 years I worked here 30 years ago. And because early party then was very white, very sort
of middle class, very pinstripe, very old fashioned. And I think it's a credit to David Cameron, actually, which now a completely different party.
We don't even talk really. None of us are even aware that Rishi Sunak, that that's his main characteristic for many observers.
We've got James Cleverly, Rishi Sunak, Suella Braverman, Kemi Badenoch, we're a very modern diverse party and a very young party full of enterprise
and full of energy for reform.
FOSTER: Thank you so much for joining us today on a momentous day for your party. You can follow live updates on this story online. We'll bring you
the latest from the U.K. as it happens. Find out more about Rishi Sunak and take a deep dive as well into how Britain got to this point. That's all on
your CNN app and you can log on to cnn.com as well.
Back in a moment.
(COMMERCIAL BREAK)
[10:20:46]
FOSTER: Welcome back. More on our breaking news. Several conservative M.P.s are throwing their support around Rishi Sunak because he makes history
becoming Britain's youngest prime minister. Is that right? Britain's youngest prime minister?
DAVID MORRIS, BRITISH CONSERVATIVE M.P.: No.
FOSTER: We're not sure about that, but we'll check it. Conservative M.P. David Morris tweeting earlier now that Boris Johnson has pulled out of the
contest, I'll be joining Rishi Sunak's team. Rishi is experienced, competent and we'll make a great P.M. He has the support of all wings of
the Conservative Party. We'll be able to unite the party, provide stability for the country. David Boris -- Morris joins me now.
MORRIS: Hello.
FOSTER: I mean, the interesting thing about you, though, I say as many interesting things, but you are a Boris supporter.
MORRIS: Yes.
FOSTER: And you switch to Rishi Sunak and not Penny Mordaunt last night. Why was that?
MORRIS: Well, it was a natural thing for me to do that. In fact, Rishi last time, Rishi is actually a friend of mine. And it was very hard for me to
say, no, I'm backing Boris.
FOSTER: But she's closer to your politics surely.
MORRIS: I would say Rishi is close to my politics. Yes. I mean, you could even say, what my politics was Boris Johnson, we're all broad (INAUDIBLE)
the Conservative Party, you know, I don't get up in the morning and say, I'm a conservative M.P., I'm right-wing or whatever we branded. It doesn't
work like that. But now it just felt like a natural home to go to. I was very disappointed when Boris pulled out last night, I have to say that.
FOSTER: Why did he pull out?
MORRIS: Well, I think he realized he couldn't reunite the party with, you know, what's going on the close succession of events.
FOSTER: Because he's a divisive figure?
MORRIS: I wouldn't say he's divisive at all. No, I just think there was just too much that have gone on in such a short space of time. And even
though Boris did get the numbers, because it was controversy, did he or did not get the numbers --
(CROSSTALK)
FOSTER: He definitely got more than --
(CROSSTALK)
MORRIS: He definitely got -- that was verified.
FOSTER: Yes.
MORRIS: You know, it was actually acknowledged by the 1922. So there was no smoke and mirrors there. He just -- I think he took a long, hard look at
the situation and thought, you know, now is not the time. And if you remember, he did this before against Theresa May. And some people have said
to me, will he make a comeback? With Boris, you never know these things. But, you know, Rishi Sunak is now the prime minister.
The Conservative Party have just been in committee room 14. Everybody gave him a standing ovation. I was as close to Rihisi as I am to you. And he
gave a cracking speech about how we're going to sort out this country. How we're going to look out for the people who are vulnerable, how they're
going to find the money to make sure that everything is met. We've got a great chancellor and Jeremy Hunt, he's staying.
And we're now going to start making the fiscal wheels work in this country. And I believe the markets have rallied. So, you know, it's all for the
good. We've just got to be growing up immature and face these problems head on.
FOSTER: He's going to build a unity government, as we understand. He's keeping Jeremy Hunt on and agree with that, presumably, for the continuity
and stability.
MORRIS: Yes. I mean ---
FOSTER: People are talking about more than two foreign office, keeping the current defense secretary Ben Wallace because he's in the middle of a war.
MORRIS: Yes.
FOSTER: Does that naturally put someone from your side of the party into the home office? Something like that?
MORRIS: I don't know. I mean, the reality is, what will happen will happen. I -- given up long ago trying to be Nostradamus working --
(CROSSTALK)
FOSTER: You need to have a seat at the top table, don't you?
MORRIS: Well, myself, I mean --
(CROSSTALK)
MORRIS: I've been, you know, I've been a government minister before. So what will be will be. I mean, at the end of the day, it's all about trying
to get things done for the country and my constituency are trying to get the Eden Project North, the second Eden Project in the U.K. That is my main
priority. Sadly, I didn't stand up and do the standard question. I've asked five prime ministers now, which is will I get the project but there's going
to be time.
FOSTER: In terms of Boris Johnson, what's he going to do now? Is he back on the speaker circuit do you think? Is he --
(CROSSTALK)
MORRIS: Well, whatever Boris -- seriously, whatever Boris does, it's going to be good. And, you know, going back to Jeremy Hunt, say I were trying to
get in there that I was one of his campaign managers. I started off with Jeremy Hunt in this last -- not Rishi's one but the one before. It's very
confusing, isn't it?
FOSTER: Yes.
MORRIS: And the one before that against Boris Johnson. So, you know, one of my closest friends is now the chancellor. That can't be a bad thing. You
know, for me, personally, I don't mean in my personal prospects, but for the country itself, because I've got --
(CROSSTALK)
FOSTER: But you're getting this impression of this one party but everyone knows it's a very divided party.
(CROSSTALK)
FOSTER: -- recent months.
MORRIS: That's exactly what, you know, that's how it's been portrayed. But I don't see it like that. Seriously, in that room, everybody it was at the
back of Rishi Sunak. Everybody was happy that he was there. You know, I think that it doesn't matter who you're back to in the end. We've got
somebody who's got talent, who's got experience and I really do believe can turn the country around and I didn't know him as the youngest prime
minister either.
[10:25:11]
FOSTER: First prime minister of color as well, which I know wasn't a big talking point during the campaign but it is something people are picking up
on today. And that plays into his narrative as well.
MORRIS: Well, that just shows. I mean, you know, Rishi is my friend, that's -- I don't look, you know, but she's my mate. But at the end of the day, it
just shows that, you know, the Conservative Party is a very broad church, we all get on in there, despite what you read in the papers about the
daggers drawn and all the smoke, you know, it really is House of Cards stuff, what you read in the papers.
I wish it was that sexy and exciting, you know, and it had been making the job a lot more interesting, but it isn't. And, you know, we all get them.
FOSTER: Let's talk about how he's going to move forward with Jeremy Hunt on this economic package, because that's his main challenge, retaining the
competence of the markets which will mean keeping taxes higher than you'd probably hoped. Also, it will mean spending cuts as well. That's going to
be the really tough part of his job. And many people are saying, it's a poisoned chalice.
MORRIS: Well, if you look at it in the round of where we are, you now, you have got the Ukraine crisis, the Russian war whichever way you want to call
that particular skirmish in Eastern Europe. That's causing a lot of problems on the financial markets, certainly on the energy price markets.
And also on the food grain markets, you know, the transport issues and getting food across Europe is becoming a problem. It's not just Europe,
it's America as well.
So this is a global, shall we say, you know, cold that we're all catching. And I think --
(CROSSTALK)
FOSTER: -- made problem that Liz Truss created as well.
MORRIS: Well --
FOSTER: -- accentuated issues.
MORRIS: In all honesty, the disruption that went on in the past six weeks should not have happened.
FOSTER: But he's now got to address that.
MORRIS: That has to be addressed and he will address it. And it's not just what's going on the past six weeks, it's the legacy of COVID and the
Ukraine. You know, we've had a real good hammering as a global village, never mind just as, you know, U.K. PLC. So we've got to share with consult
that out because everybody's in the same boat.
FOSTER: No general election, presumably?
MORRIS: No, I don't think there will be.
FOSTER: So the next one will be in two years?
MORRIS: It'll be 2024. I should --
(CROSSTALK)
FOSTER: And you think he can -- you guys can unite behind him enough to possibly win
That?
MORRIS: Seriously, what I saw in that committee room, I've not seen that before. And I'm not just saying that, I have not seen that even at the back
of Boris.
FOSTER: But that's for now, isn't it? You know, there's still -- dividing lines are still there.
MORRIS: Oh, it's politics and you're always going to get somebody who's got a different opinion. That is why we're in there. It'd be boring if all of
our opinions were the same. And, you know, you look across the benches and the Labor Party still haven't come across with what they would do. In fact,
they quite liked that mini budget. You know, that was what Jeremy Corbyn wants you to do.
In fact, he wants to go further than that. So, you know, they're just sort of pointing the finger, but they're not actually saying what they would do.
There's no rhetoric behind what they're saying in the newspapers.
FOSTER: Do you think there's any chance he could be appointed tonight? The king's on his way back to London.
MORRIS: I don't know is the truth, I didn't know that. I mean --
(CROSSTALK)
FOSTER: It happened so quickly.
MORRIS: I've been asked this by people, you know, what's going to happen? I just wish I could tell you either. All I know is that I've just been
summoned to a -- to a location to meet up with the team. So that's not a promotion, I can assure you of that. That is just the team getting
together, you know, and we're still going to celebrate.
FOSTER: Which team? There's so many teams.
MORRIS: Well, this is the Rishi's team.
FOSTER: OK.
MORRIS: Yes.
FOSTER: Well, good luck today. A big moment for your party and the United Kingdom and a big test going forward as well. We're going to continue our
coverage of Britain's new prime minister after the break.
(COMMERCIAL BREAK)
[10:31:03]
FOSTER: Welcome back. I'm Max Foster outside the U.K. Houses of Parliament. About 90 minutes ago, Rishi Sunak was announced as the next British prime
minister. And this is the scene outside Conservative Party headquarters. A big suggestion we're about to see the new prime minister for the very first
time in public. He's been speaking to members of the Conservative Party.
And he's been talking about the importance of going into people who are in the room with him of unifying the party now. Everyone coming together, I'd
very much looking ahead to fixing the economy effectively. But we'll keep an eye on that scene because pretty exciting for the Conservative Party but
also quite hopeful. One would hope for the U.K. as well. Our next guest wants to know what, you know, Rishi Sunak is going to do to revive
Britain's economy.
Matthew Lash, head of Public Policy for the Institute of Economic Affairs. What would you like to hear from Rishi Sunak today?
MATTHEW LASH, HEAD OF PUBLIC POLICY FOR THE INSTITUTE OF ECONOMIC AFFAIRS: Look, I mean, I think Rishi's priority which is made very clear and
something that's very consistent with what he's talked about for the last six months or even last few years when he was chancellor was this idea of
fiscal conservatism, trying to ensure the numbers add up, not spending beyond your means, not tax cutting in the way Liz Truss obviously got a lot
of trouble for without any spending restraint, as well as the energy package.
So I think that's something that the government need to focus on. Currently, the fiscal statement is due in just a week's time. And that's
meant to put out all the forward estimates in terms of the government spending, economic growth, inflation, all these kinds of very important
stats to then give a bit of calm to the markets when it comes to the value of the pound, as well as the government borrowing costs.
But I think that's really just linked the short term issues here. I think what we want to hear from Rishi is actually a lot more about what is his
plan for economic growth? We haven't heard anything so far. Obviously, Liz Truss, ultimately was not particularly successful. But I think she
identified a really important issue, which is, the U.K. economy has been stagnant in terms of living standards for the last decade.
We've -- coming out of a period of slowdown through COVID, a slowdown and inflation crashes as a result of the war in Ukraine. And then you've got
underlying structural issues with an aging population, more pressure on public services, as well as questions about quality of life for the British
people. So the question is, what can be done in terms of economic reform? What are the plans when it comes to things like housing?
How are we going to get more houses built in the U.K. faster, how we're going to --
(CROSSTALK)
FOSTER: Practical steps. The big challenge has got, obviously, as you say, balancing the books. On the tax side, you know, everyone's accepting he's
going to have to keep taxes higher than Conservative Party would have liked. But the real challenge, isn't it, on the spending side is going to
identify cuts. And that's going to affect the cost of living again.
LASH: Well, I think that's true. So, we're -- we want our way to a 70-year tax high in the U.K. which is quite extraordinary itself. And on top of
that, the government's got this fiscal hole that's coming as a result of high borrowing costs as a result of a slower economy, you're not going to
get in as much money as you might hope. And the government doesn't want to overspend.
Finding cuts though, I think is extremely difficult for the government. Necessary, but it's difficult --
(CROSSTALK)
FOSTER: That's going to make a very unpopular straightaway.
LASH: Well, potentially if it's mishandled, you can't miss out on the politics of it. Because obviously, if you can't get the cuts through
Parliament, you're not going to be able to convince the markets that you're in a better fiscal position either. So you're going to have to -- I think
he's got to make the minimum necessary cuts in terms of government spending, you know, hold things back a little bit.
I'd like to see them make some tough decisions. I don't think there's necessarily going to be the case if you've got an issue like the pension
triple lock in the U.K., where we guarantee that pensions are going to go up by 2.5 percent inflation or wages. That means pensioners of last decade
have done much better in terms of their earnings increases than working age people. I don't think that's a particularly sustainable policy, but is
politically very popular as one example.
FOSTER: Your -- the previous guest was a very close to Boris Johnson and says it's amazing how unified the party is today. We've all come together.
It's all very rosy, which seems utterly ridiculous when you look at the state -- looked at the state of things even just yesterday. I guess the
party is so desperate that actually is going to unify temporarily at least behind Rishi Sunak.
[10:35:06]
LASH: Yes. I think it's pretty clear that Rishi comes from a much stronger base when it -- when it comes to Parliamentary support than Liz Truss. He
has --
(CROSSTALK)
FOSTER: Yes. Or even Boris Johnson.
LASH: Or even -- potentially -- I think Boris Johnson had a lot of power to begin with and winning an election or being an electoral success gave Boris
a lot of power. And now you've got the situation where everyone's coming in behind Rishi. I don't think people want him to fail. But I think there's a
big risk of crap showing up pretty quickly in terms of specific policy areas, where you see big divisions within Tory party on the ability to
reform.
Take some like fracking where there's a lot of opposition to this idea of doing shale gas in the U.K. from certain backbenchers to some who think
that it's a great idea to increase the U.K.'s energy security. How do you balance those competing factors and just that one issue, let alone
something like regulatory reform that could get quite controversial very, very quickly on planning as I was saying earlier.
FOSTER: We're just looking at scenes now. It's like a serve to party headquarters. We're expecting to see Rishi Sunak. His first public
appearance really, since becoming prime minister. Then we'll expect to hear some comments from him, hopefully. And then it's really all eyes on the
palace to see Liz Truss heading into the palace to see King Charles to offer her resignation. Then we'll hear about Rishi Sunak going in to be
appointed.
Before Liz Truss goes into the palace, the tradition is that she would make a speech on the way out of Downing Street. Do you think she's going to do
that?
LASH: I mean, I think she's already made her resignation speech which was a -- which was a short, sharp 90 seconds introduction. I'm honestly not
particularly sure. I know it's (INAUDIBLE) to say this has happened today or tomorrow.
FOSTER: Yes.
(CROSSTALK)
LASH: -- any words in terms of when the --
(CROSSTALK)
FOSTER: We know the king's back in London tonight. So, it could potentially happen tonight because of the way things upside down anyway, they could
speed it through presumably, but maybe it'll be tomorrow. Certainly he isn't going to be any later than tomorrow. And then we'll hear from Rishi
Sunak going into Downing Street. He'll have the podium. That'll be his big moment to set his store for his entire premiership, no matter how long.
Here we are. There's big cheer. Let's see what this is about. (INAUDIBLE) it's got to be Rishi Sunak. Who else is going to come on that sort of
audience?
Rishi Sunak -- Rishi Sunak then entering Conservative Party headquarters. He has been elected the new leader. Pretty small mandate in terms of prime
ministerships but he is now that going to be the British prime minister. He'll have to be appointed by the king. We expect to hear from him very
soon. But this is really a moment to thank the Conservative Party. And, you know, one of his key priorities, of course, get the party together behind
him.
Once he's got that, then he can move forward with his agenda. But this is a notoriously divided and split party. And that's really showed its ugly head
recently, hasn't it?
LASH: I think that's -- I think that's right. I think we're going to say not only Rishi speech trying to unite the party set for his policy agenda.
Tomorrow, but also in the next few days, we'll say his Cabinet appointments and (INAUDIBLE) to say, does he try to bring together the Tory party in
some way by appointing people from all sorts of different wings of the Conservative Party to try and put on a united face?
Try and unite everyone behind him as -- him as the new leader and a policy agenda going forward. And then also where some of the wisdom was more
junior ministerial positions will go in terms of the uppers and comers of the Tory party. He -- ironically, because this campaign has been so short,
it doesn't necessarily owe that much for that many people. It's not clear that he you know who he needs to buy off other than maybe he's --
FOSTER: Probably more than perhaps.
LASH: But perhaps -- but she didn't withdraw for him. She withdraw because she didn't have --
(CROSSTALK)
FOSTER: Yes. Yes.
LASH: -- to pay off Boris Johnson again who withdraw his own accord. So he's in a relatively free state then to choose who becomes a member of his
kind of -- his inner sanctum and decide whether maybe he tries magnanimous in success and keep on some of the Liz Truss's closest supporters or if she
-- or if he says there will be a disaster.
[10:40:07]
I want my own people in these places. I think that -- that'd be really good to say.
FOSTER: It's such a different prime minister as well coming in now. I mean, Liz Truss was known for not being across the detail for, you know, being --
looking at the bigger picture, if I can be complimentary about her. He's an absolute details, man, isn't he? He often knows more about what's going on
in meetings and many of the advisors and, you know, the people around him were meant to be the experts.
He's all about detail. He's very academic, isn't he? And he achieved a very high academic level. So, you know, in time -- in terms of a premiership,
this isn't going to be razzmatazz, even though he's quite glossy, it's going to be quite academic.
LASH: I mean, in a sense, you'd hope so, which is you want someone who at the top of the political world is able to get into the depth and the detail
and make some of the difficult decisions that need to be made. There's still a lot of uncertainty about, as you've said, where Rishi Sunak wants
to go out of the country, you know, during his leadership campaign, and I'm looking back through today to see what did he actually commerce?
And there's not actually a lot of detail there. I mean, he talked to in broad terms about trying to reduce taxes in a few years time. We don't know
if that's going to be able to happen anymore. We talked about reforming business rates to boost product -- productivity, looking at investment
incentives, all sorts of different policy areas where he's said things that might not necessarily great for growth, but to fulfill a certain
constituency, like not building on the Greenbelt or protecting agricultural lands, and so not putting up solar farms.
There's all sorts of different commitments he made. I want you to see whether he keeps those commitments, whether he says we're in a new
situation here, we need a slightly different approach to what I've talked about in the past. Here's my plan to get the U.K. economy going again, not
only do we need to stabilize the finances, because the next step forward and that's what I'll be interested to see.
FOSTER: Matthew Lash, really appreciate your time and your insight today. We're all trying to figure it out, aren't we, Bianca? She's over there in
Downing Street. An extraordinary moment really. Was -- we're going to Bianca? We're going to break. We're going to proceed to Bianca after the
break. But look at this moment. Rishi Sunak coming out meeting the Conservative Party members there. It's what a year it's been for him.
He's tried to get this position once already this year. Now he's finally into number 10 Downing Street.
(COMMERCIAL BREAK)
FOSTER: Rishi Sunak, Britain's first prime minister of color. One of the youngest as well, just 42 years old going to conservative party
headquarters. The party that has voted him as leader in an internal debate but also making him prime minister automatically as soon as appointed by
the king which could happen today. More likely tomorrow. He's certainly in power. And he's working out from the very a low level if you consider how
disastrous the previous premiership was led by Liz Truss.
[10:45:06]
But what a job is taking on an economy heading into recession, interest rates, high -- inflation high that he is the man most qualified the party
feels to steer the troubled British economy into steadier times. Hopefully, U.K. financial markets reacting to the announcement of their new prime
minister. We'll have that in just a moment. He'll take office amid that crisis really in the U.K. economy.
New data showing the private sector output dropped for a third straight month. And business optimism now at its lowest level since April 2020. That
was early in the pandemic, of course. Anna has been looking at all of this. I mean, people are calling it a poisoned chalice. He's obviously very
qualified to take over the British economy. But for anyone, it's going to be tough.
ANNA STEWART, CNN REPORTER: It's a poisoned chalice. But one that he knows well, given he was actually chancellor only until July of this year, which
is extraordinary when you think how much has happened since then. We do know a lot about him in terms of his economic thinking, particularly the
leadership race, the first one we had over the summer where he spoke a lot about being essentially fiscally conservative that he won't be issuing any
major tax cuts until he has inflation under control.
And I think he was very -- well it was fiercely opposed really to so-called Trussanomics even before Liz Truss won that leadership race. So, I imagine
we will see the continued unwinding of the so-called mini budget which of course sunk Truss's premiership. And I think we'll see a reverse of that
possibly under Jeremy Hunt, who, of course, is the current chancellor. It'll be interesting to see whether he keeps that sort of continuity in
there.
We can show you what the markets have been doing today. I think ever since Boris Johnson, essentially removed himself from the race, we've seen quite
a calm on financial markets. The pound hasn't been moving too much. It's been fairly stable. But it's actually U.K. government bonds where we've
seen the most movement this morning. The 10-year-yield comfortably now below four percent which is a far cry from where we were just a few weeks
ago under Liz Truss.
We have a prime minister as well, Max, who of course, has the support of more than half of his party at this stage and a party that has a big
majority in Parliament. So, barring anything we can't see at this stage and I say that because who knows what's around the corner in terms of U.K.
politics. This should be a prime minister with some stability and one who knows the ins and outs of the economy and one that has great experience
that being a chancellor during a really difficult era with a pandemic.
So all being well, Rishi Sunak will perhaps be the prime minister until the next general election. But who knows.
FOSTER: It's interesting, isn't it? Are just -- we just heard a statement from the Irish prime minister saying -- congratulating Rishi Sunak and
looking forward to working with him on the political impasse in Northern Ireland. There's so much we don't know about him as a politician, because
we know him mainly, as a finance expert. He's been so focused on that. A big challenge now is focusing on the economy which is the absolute
priority.
And then perhaps delegating a lot of these other parts of his job, you know, the war in Ukraine, we don't know where he really stands on that, do
we? There's so many -- it's going to have so many distractions now whether or not he can keep focused on the economy, with all these other things
going on as well. He's so much more as expected of him.
STEWART: Yes. And that to-do list, as you say, is really long at this stage. And we don't know a huge amount of his thinking at the moment
because he's been very quiet in this leadership contest. Everything we really know about where Rishi Sunak stands, is from the summer, when we had
the six-week contest against Liz Truss, he's been incredibly quiet this time round. It will be interesting to see what he puts together in terms of
the cabinet, whether or not he does pick people from the different factions from the Conservative Party, so that we can see some unity perhaps.
I think that will be very important as to how he performs in the coming months. But all that to come I think the next few days will be really
interesting. I think markets would like to see continuity in the role of chancellor given how much unstability we've had in recent weeks. So
hopefully, for them, we'll see Jeremy Hunt in that position. But as you say, Rishi Sunak has been a chance that he's got all that experience.
But actually now he almost needs to delegate that and look at all the different issues that people want to know where he stands on.
FOSTER: Presumably, the city is pleased to have one of their own effectively in the top job. This is someone who did a Stanford MBA, he
worked at Goldman Sachs. He did really well from working in the hedge funds as well. His wife is obviously big in the -- very big in the global
corporate world. So this is someone that really understands the city.
STEWART: Yes. I think this is possibly the best option that was certainly on the table. It was perhaps the better option the last time there was a
leadership contest when Liz Truss, of course, was the other contender. So I think in terms of the city they'll be pleased with this result.
[10:50:00]
If we go beyond the city though and go beyond the Conservative Party, Max, I do question how happy the British public will be with this. This is the
second prime minister that has effectively been appointed within the party. Liz Truss by conservative party members, Rishi Sunak not even by party
members but just by M.P.s around half of the party there. So while general elections are never designed to a point to prime ministers or elect prime
ministers directly, parties are elected.
It does feel though at this stage there's something about democratic deficit and speaking to people around the U.K. that is something that I've
been hearing a lot. People feel like this is quite far removed from them. Second prime minister they've had no vote for.
FOSTER: OK. Anna Stewart, you're absolutely right. The mandate is very questionable a lot of -- for a lot of people because just a handful of
M.P.s effectively are chosen to be the next British prime minister.
We'll have much more on this and we're waiting to hear from the new British prime minister as well and what his plans are. We'll expect a statement at
some point today.
(COMMERCIAL BREAK)
FOSTER: We're live in Downing Street and here in Parliament for you today as we get this historic news really of Britain's latest prime minister, he
is Rishi Sunak. He had a go earlier this year, didn't he'd, Bianca? Now, he's finally getting through try and try again. That's really the message
from this in many ways. Tell us about how this played out. People who just haven't kept up with this whirlwind of British politics.
NOBILO: And who can blame them? It's been moving at lightning speed. So Rishi Sunak had been tips to be the next leader of the conservative party
and prime minister. About a year ago because of his considered to be impressive performance in the pandemic as chancellor and he was the
(INAUDIBLE) favorite to succeed Boris Johnson.
But when Boris Johnson became embroiled in various scandals, particularly around party gate and the behavior of some of his own conservative M.P.s,
Rishi Sunak's resignation as chancellor was considered by Johnson supporters to be one of the most instrumental influential events which
precipitated Johnson's downfall.
That made his popularity take a bit of a battering within the party, perhaps not in the wider public. But Rishi Sunak had also come under a
little bit more scrutiny because he'd been issued with a fixed penalty notice by the London Metropolitan Police for breaking COVID lockdown rules
in government buildings, he apologized for that, he paid the fine. Also, there was a big story that developed around the non-domicile status of his
wife, Akshata Murthy, who's the daughter of an Indian billionaire founder of Infosys.
Sunak is one of the wealthiest people in the United Kingdom and by far and away the wealthiest member of the House of Commons. So, there was a lot of
focus on whether or not he would be the right person to lead during cost of living crisis when he might not be able to relate to the struggles that
regular people are going through. So when he went up against Liz Truss in the last leadership contest just a few weeks, months ago, he didn't do as
well as would have been expected the year before.
And even though his economic predictions have since been vindicated, and many thought he was the more sensible, realistic candidate in terms of the
economy. Liz Truss was elected by the Conservative Party membership. Then she had a premiership which was unstable from the beginning. After six
weeks she ultimately had to end up resigning after a disastrous mini budget announcement which sent the markets into a tailspin.
[10:55:10]
And this presented Rishi Sunak with his second opportunity to run for Conservative Party leadership and to become prime minister. And this time
he ultimately was running unopposed, there were no other candidates nominated. This is the Conservative Party recognizing that they have to
convey that they are united, not just to Parliament, but also to the country at large, Max.
FOSTER: In terms of the process now, we expected to hear from him any moment. He needs to speak to the world, doesn't he? And try to justify
really what the Conservative Party's been doing over the recent months and years. How's he going to convince the wider world that he and the
Conservative Party are the right people to lead?
NOBILO: Something which has been helpful is how this last leadership contest has transpired in just a matter of days, because whoever a
Conservative M.P. wanted to become prime minister, whether it was Boris Johnson, Penny Mordaunt or Rishi Sunak, almost everybody could agree that
wrapping up the contest as quickly as possible and ideally, having a candidate who was unopposed to the vote didn't have to go to the membership
would be the best case scenario.
It's the least disruptive, it takes the least amount of time. And it does present something of united front and a consensus. So that's a helpful step
forward after the turbulence that we've seen over the last six weeks. In terms of what happens next, as you say, we wouldn't be expecting to hear
from him on camera fairly shortly. I'm sure that he's fully received the criticism that Liz Truss's government had got over recent weeks of not
communicating enough with the media, a poor performance in interviews, not telegraphing policies well enough in advance.
So he'll want to establish right from the beginning that he's not going to make those same mistakes who will also be thinking about who to put in his
cabinets, who -- which positions to reshuffle where he wants stability, where he wants change. And of course, before he does any of those things,
officially, he'll need to actually go to the kingdom become prime minister. And as you know how that works, Max.
Perhaps it will happen later this evening, Liz Truss goes to King Charles to resign. Then Rishi Sunak follow shortly after to be invited to form a
government and become prime minister. But as ever, as a prime minister. He's hitting the ground running and I'm sure everyone will be glued to P.M.
cues on Wednesday, even those of us who aren't usually because it will be fascinating to see him at the despatch box for the first time trying to
rally the support of his benches and face off against Kier Starmer, leader of the opposition.
FOSTER: Should be only a second day in the job as well. That's going to be a huge test on Wednesday. Bianca, thank you very much indeed. We are hoping
to hear from Rishi Sunak in the next hour. His first statement to the public after being voted the leader of the Conservative Party and
subsequently the next British prime minister.
CONNECT THE WORLD continues after the break.
(COMMERCIAL BREAK)
END
