They call him the “Yorkshire Maharajah,” the king of all he surveys. And certainly, for a Chancellor in a Government presiding over the deepest recession in three centuries, Rishi Sunak is a remarkably popular politician.
The cynical explanation is that he is spending money like nobody before him. After all, the forecasts suggest he will soon become the first Chancellor to spend a trillion pounds in a single year.
Yet the truth is something different. “He has something lacking in other politicians,” said James Johnson, a pollster. “If I had to make a comparison, it would be with Tony Blair. Sunak has an extraordinary ability to connect with people.”
Still only 40, and Chancellor for less than a year, Conservative MPs are already speculating that Mr Sunak will become Britain’s first Asian prime minister. “The relationship between Rishi and Boris is very good,” said an MP. “There’s no question of a saga between them. But when Boris moves on, Rishi will become leader. The party will demand it.”
First impressions and first Budget
On March 11, just 27 days after he became Chancellor of the Exchequer, Mr Sunak rose to deliver his first Budget. It was to be one of the most remarkable fiscal statements made by a Chancellor in decades.
Mr Sunak was already the fastest minister to reach a great office of state since the War. He was the first politician from a minority background to deliver a Budget. He would announce a fiscal expansion to meet the Prime Minister’s promises. He would make an open-ended commitment to do “whatever it takes” to get the economy and NHS through the pandemic. And he would, in effect, rewrite the whole package just days later.
By March 17, with Covid advancing around the country, and the Prime Minister instructing people for the first time to stay indoors, Mr Sunak stood before a camera and addressed the nation directly. Announcing £330 billion of new financial guarantees, he declared: “This struggle will be won through a collective national effort. Every one of us, doing all we can to protect families, neighbours, friends, jobs. We will do whatever it takes.”
“Voters still talk about this statement, almost a year later,” James Johnson said. “This kind of cut-through moment doesn’t tend to happen, even for prime ministers. He has an appeal that goes beyond party divides.” Mr Sunak, the public perceived, was a different kind of Conservative.
From a top public school, to the University of Oxford, to Goldman Sachs
Yet it would be a mistake to simply declare Mr Sunak an ideological aberration, a non-conservative at the top of the Tory Party. “He has a communitarian heart,” explained a close friend, “but an orthodox mind.”
Certainly there is little in Mr Sunak’s family and business background to suggest there is a secret revolutionary in the Treasury.
Mr Sunak’s parents – a doctor and a pharmacist – sent him to Winchester College, one of the country’s top public schools. Of his political memories from childhood, he recalls the excitement of his father buying shares as part of Margaret Thatcher’s “Tell Sid” campaign in the 1980s. At school he wrote an essay lamenting the 1997 Labour election victory, warning against profligate spending and statist economic planning.
The books Mr Sunak reads are rarely about reshaping the world from philosophical-first principles. The works he cites as influential are written by big names from the worlds of business, investment and science, like Charlie Munger, Warren Buffett and Richard Feynman. The political texts he cites are not ideological, but the moderate civic conservatism of the former Tory MP, David Willetts.
At Oxford, where students of politics, philosophy and economics drop one of the three subjects after their first year, Mr Sunak continued with the more applied fields of politics and economics. Instead of signing up at the Oxford Union debating society, he joined and became president of the university Investment Society – the shop window for big investment banks looking for new talent.
And sure enough, after graduating with a first class degree, Mr Sunak spent three years at Goldman Sachs, before working first for the legendary activist investor, Chris Hohn, at The Children’s Investment Fund, and later at a fund based in California, called Theleme.
A childhood in Southampton, constituency in Yorkshire and mindset in California
The financial crash had a profound effect on Mr Sunak. “It drove his view that we need to make sure capitalism is responsible and working for people,” a colleague said. “The ‘heads they win, tails we lose’ thing was very real, and very damaging to trust in the system.”
But his values seem to come from somewhere deeper than these experiences. “One of the reasons people feel he’s genuine,” said a friend, “is because he’s not driven by focus groups, it’s all very instinctive”.
James Brokenshire was the Secretary of State in the ministry where Mr Sunak had his first ministerial posting. “I didn’t really know him at that point,” said Mr Brokenshire, “but I was immediately impressed. Not just the workrate and the diligence, but the moral seriousness he showed”.
One of his responsibilities was the “Troubled Families Programme,” which itself had been troubled thanks to a disputed evidence base. “He wasn’t interested in fitting facts to the narrative,” Mr Brokenshire said. “He had an intuitive sense that it was the right thing to do, but he knew you could only do it with real evidence. The work he did allowed us to relaunch the programme and help the lives of a lot of people.”
Trying to get to the bottom of the values that spur Mr Sunak on, the importance of the places in his life comes up time and again. Mr Sunak grew up in unfashionable Southampton, and still follows the city’s local football team. “The leveling-up agenda comes in part from him growing up in Southampton,” said Claire Coutinho, a Tory MP and former adviser to Mr Sunak. “Rishi often says it’s like a Red Wall seat, but it just happens to be in the South.”
Then there is Yorkshire. Mr Sunak’s constituency, Richmond, is in many ways the opposite of Southampton: northern, rural and prosperous. But a short drive from away are several more humble Red Wall constituencies. Ben Houchen, the Conservative mayor in Teesside, is an especially grateful ally. “Rishi understands the new Conservative voters and Red Wall areas,” he said. With the Brexit deal now agreed, Teesside can expect to be one of the new free ports – high growth areas, exempt from many taxes and regulations – that Mr Sunak has promised.
But there is one other, very different, place that has left its print on Mr Sunak, and that is California. After leaving Goldman Sachs, Mr Sunak went to study, as a Fulbright scholar, at Stanford University, where he met his wife Akshata, the daughter of the Infosys Indian billionaire, Narayana Murthy. Their daughters, Krishna and Anoushka, were both born in the US while Mr Sunak was working for Theleme. “Rish just loved it on the West Coast,” a friend recounted. “There’s just a lot of big thinking and a belief you can change the world over there, and he thinks that’s fantastic.”
Mr Sunak is a blend and a balance of things that in others often or usually conflict. He is the Winchester public schoolboy, and the hero of Teesside. He is the star of the City, and the countryside champion. His “anchor” is Yorkshire, but his inspiration is California. None of these is a contradiction, but they do confound, and they also tell us something important about the man.
When one Red Wall advocate proposed a policy too statist for Mr Sunak’s taste, he declared: “I want to help the regions as much as anybody, but I don’t see why we shouldn’t do it using Conservative principles, not Labour ones.” The communitarian heart has a worthy rival in the Chancellor’s orthodox mind.
A practising Hindu driven on by his faith
Six weeks before Christmas, Mr Sunak left his Downing Street office and knelt before the Number 11 door, lighting small clay oil lamps on the step. It was Diwali, and Britain’s Hindus, Sikhs and Jains had been forced to stay at home.
“For us as Hindus,” Mr Sunak said, “Diwali is special, and it’s going to be different this year. But we’ve got Zoom, we’ve got the phone, and most importantly, we’ve got each other. Whether you can see someone or not the bond of family, that bond of love, is always going to be there.”
Here was another glimpse into what explains the Chancellor’s communitarian heart. “Faith is important to me,” he said. “I’m a practising Hindu. I pray with my kids, visit the temple when I can.”
His two favourite moments in politics, Mr Sunak tells friends, were celebrating Diwali in Downing Street, and swearing his oath as an MP on the Bhagavad Gita, the holy book of Hinduism. When his mother-in-law came to Parliament to watch him swear-in, he laughed, she could not believe what she was seeing.
Mr Sunak’s faith clearly drives him on. And his story as the son of migrants helps to understand him. His parents chose to move to Britain, and, as he said in his maiden Commons speech, Britain treated them fairly and rewarded them for their efforts and discipline.
So where some politicians can grow nervous talking about British values and institutions, Mr Sunak shows no such apprehension. But neither does he shy away from the thorniest of British difficulties.
Last June, as the Black Lives Matters protests reached Britain, ministers visibly froze like rabbits in headlights. On one hand, there was mounting pressure to criticise the rioters, but on the other hand some ministers, including the Prime Minister, were nervous about criticising demonstrators demanding racial justice.
Unprompted, Mr Sunak stepped forward. “As a British Asian,” he said, “I know that racism exists in this country. And I know people are angry and frustrated”. But “the truth is, we have inherited a country far more inclusive and fairer than at any point in its history,” and “a better society doesn’t happen overnight – like all great acts of creation, it happens slowly, and depends on the cooperation of each of us toward that common goal.”
A decisive, relationship-building leader
“He takes great care with his words,” said a colleague of several years. “I think it’s an attitude he partly picked up in America. He believes that oratory and communication matter, so he spends time thinking it through.”
That time is often spent in the company of Liam Booth-Smith, his de facto chief of staff. Mr Booth-Smith is that strange mix of colleague, confidant and friend that advisers to ministers often become. Cricket fans both, the pair have promised that when the crisis passes they will have a nets session together.
The friendship is telling. Mr Sunak became Chancellor when his predecessor, Sajid Javid, resigned over the Prime Minister’s insistence that there should be a joint team of special advisers. Mr Sunak accepted the model, and inherited Number 10 advisers including Mr Booth-Smith. In practice, his advisers have become a traditional Treasury team, reporting directly to Mr Sunak.
The loyalty he inspires in his team is not limited to political appointees. “We love him,” said a Treasury official. “He has everything we like in a Chancellor. He’s comfortable dealing in numbers and spreadsheets. But he brings great relationships and political capital too.”
How those relationships survive the difficult decisions that lie ahead will be one of the stories of this year. Mr Sunak has already resisted the Prime Minister’s demands for spending outside agreed capital budgets, but the partnership between the two, according to sources in Numbers 10 and 11, remains strong and trusting.
“He’s just very good with the people here,” a civil servant explained. “He had the senior officials and their partners up to stay at the house in Yorkshire. And he’s not hierarchical in meetings at all. He wants the right people on the call to help him make the decisions.”
Mr Sunak’s ability to make decisions comes up time and again. “Every document that goes up to him gets turned around in 48 hours,” an official explained. “His advisers get 24 hours to give comments, and then he gives us his decision. It’s a welcome difference compared to some of his more indecisive predecessors. But his challenge will be to show he can be strategic as well as decisive.”
Knowing that not every decision in the midst of a crisis like the pandemic will go right, a colleague added: “We often talk about the Tony Blair quote about how the public will forgive a wrong decision, but they won’t forgive not deciding at all.”
But Mr Sunak and his team are open about their belief that “with perfect hindsight there are some things we might have done differently”. An ally explained: “When the facts change, the policy changes. They might go on about a u-turn inside the bubble, but the public know this is complicated, and if you’re making decisions for the right reasons, they will back you if you change it.”
A balance between his orthodox mind and communitarian heart
Mr Sunak’s good manners mean even MPs he disappoints hold him in high regard. One reports that when he went to lobby the Chancellor for local funding: “He heard my case politely but didn’t accept it. But when I left I realised I didn’t feel aggrieved at all, which says a lot about his political skill.”
Looking to the year ahead, Mr Sunak will need that skill in abundance. The mood among Tory MPs is fractious thanks to frustration with the cycle of lockdowns and Government missteps as the pandemic has gone on.
Consider the issues confronting ministers this year and you realise that Mr Sunak is central to all of them. As ever, the key to understanding what Mr Sunak will do will be understanding the balance between his orthodox mind and communitarian heart. His first Budget was a significant fiscal expansion in its own right, but that expansion has been dwarfed by Government spending since.
“It is clearly not sustainable to borrow at these levels,” the Chancellor said in a recent interview. “Running a structural deficit years into the future, with debt rising? That’s not building up the resilience you need to deal with the future shock that will come along.”
While there is little appetite for another decade of austerity, pollsters believe Mr Sunak has the political authority to oversee a significant fiscal correction. “Plenty of voters in the Red Wall constituencies, as well as elsewhere, are nervous about growing debt,” said James Johnson. “So long as Sunak continues to show the right values in his decisions on how to make the correction, he can do it.”
Yet rectitude is no longer in fashion, and the Chancellor is yet to show he can carry his party on difficult spending decisions, as the rows about “holiday hunger” among school children and the uplift in universal credit show. But he is readying himself for difficult times ahead, and likes to quote Margaret Thatcher’s chancellor, Nigel Lawson. “A chancellor who is doing his job properly,” Lawson said, “often has few friends.”
Reconciling fiscal policy with the promises made to the new Conservative electoral coalition will be a huge challenge. The Chancellor will still commit to the infrastructure investment needed in the regions beyond London and the South East. Beyond that, Mr Sunak is likely to concentrate on how funds are spent rather than radically increasing departmental budgets.
As Chief Secretary to the Treasury, he pressed for changes to the Government spending rulebook, to end its biases against the provinces. His support for free ports – made possible by Brexit – is indicative of his belief that changes in regulation can bring prosperity to the regions. Asked by friends, if he were Health Secretary, whether he would be a manager of the NHS or its reformer, he replied with vehemence, “reformer!”
Even still, we are more likely to see spending restraint rather than across-the-board cuts. An ally of Mr Sunak said: “The Tory Party hasn’t really changed yet. We are still not the party we need to be to maintain the coalition of voters we have now and will need in future.”
This emphasis on the party’s newest supporters suggests tax rises may also be on the way. It is not difficult to imagine increases in corporation tax, changes to pension tax relief for higher earners, and reforms to National Insurance Contributions for the self-employed: all are longstanding bugbears of Treasury officials.
Whether Mr Sunak is prepared to be really bold – lifting the limits on National Insurance Contributions for higher earners, for example – and whether Tory MPs will let him, are still known unknowns.
Worry list: Covid, Brexit, the future of the Union
Of other known unknowns, high up the Chancellor’s worry list is the date at which we can finally move beyond the cycle of lockdowns and wealth-destroying restrictions. Mr Sunak makes no secret of his impatience with what Whitehall calls the NPIs – non-pharmaceutical interventions, or social distancing and the like – and he will be among the ministers arguing that the restrictions can be lifted once the most clinically vulnerable people have been vaccinated.
Then there is Brexit. With the pandemic dominating public attention and devouring political capital, Mr Sunak is yet to set out his big vision for Britain’s economy after leaving the European Union. Privately, he says he believes the fundamental things people wanted when they voted for Brexit – freedom from European laws, the ability to control immigration, the end of vast annual membership payments – have already been achieved. But he believes that the economic change permitted by Brexit will be a gradual, long-term shift rather than a revolutionary schism.
Looming larger than any and even all of these issues, however, is the future of the Union. In May, Scotland looks set to give Nicola Sturgeon’s Scottish Nationalists a majority of seats and perhaps even a majority of votes. The calls for a second referendum on Scottish secession will grow louder, and the pressure will mount on the Government.
Mr Sunak’s views on how to handle the constitutional decisions raised by the Scotland question are still opaque, but the politics of the Union are surely another reason why the Chancellor could not, even if he wanted, launch another decade of austerity. If there is a referendum, ongoing cuts would be a terrible background to a campaign. If there is no referendum, a Tory Government refusing to let Scotland decide its own future while cutting services would drive swing voters towards the Nationalists. Despite this uncertainty, Mr Sunak – as popular in Scotland as he is across England and Wales – will be a crucial voice in making the Unionist case to undecided voters.
So far Sunak has shown a deft touch that has allowed him to ride high even through the lowest moments. There are many reasons why he has been able to do so, but perhaps the best explanation is the simplest. “Politics is unrepresentative of the real world because of its deficit in kindness and decency,” a Tory strategist said. “Rishi is much more representative of the public in that he is simply a very nice person. Good guys don’t need to finish last.”