New neighbours the prime minister and chancellor have a range of forbidding challenges ahead that would test even the most robust relationship
For a guide to the relationship between a prime minister and chancellor, look first to the uncomfortably close living arrangements in Downing Street.
Rishi Sunak’s determination to keep Jeremy Hunt as his “Mr Stability” chancellor is evinced by allowing the former foreign and health secretaries to occupy the much larger flat above Number 11 while squeezing himself into the smaller Number 10 quarters. That is uncosy proximity for two men with growing families – but useful as they burn the midnight oil together in the run-up to the crucial autumn statement next Thursday, which will lay out how the “rescue squad” of Hunt and Sunak intend to fill a £40 billion black hole – and mitigate the potential devastating impacts for London and the country of a looming deep recession.
If Sunak looked his usual spry self, dodging a barrage of hostile questions at PMQs on November 9, Hunt, who usually looks a lot younger than his 56 years, had noticeably acquired a deep vertical line of worry-furrow down his boyish face. “The scale of what they are dealing with is forbidding,” says a former chancellor. “But they are the best team this government could field to take it on.”
Their cheek-by-jowl living arrangements mean that Hunt is heir to Carrie Johnson’s luxuriously controversial interiors upgrade in the Number 11 flat (so I hope the Hunts like green and dark reds chromatics and swirls of Lulu Lyttle’s designs). Hunt might miss the spring-floor ballroom he installed at his home in south-west London – he is a committed and accomplished dancer, though possibly not so much right now.
It is the gesture that counts. Neither Sunak nor Hunt are remotely hard up – both have made medium-size fortunes themselves, Hunt by setting up a languages businesses for Asian students just after I first met him as a rising-star Tory in the late 1980s at Oxford. Sunak, as a Labour MP reminded us at PMQs yesterday, is one of the richest men in Britain – in part from his time as a hedge funder but, more substantially, as the son-in-law of the Murty family Indian tech dynasty, which founded the Infosys digital services empire.
But days (and nights) are long in Downing Street and both men are long-hours fiends and Sunak in particular is a details person: an aide to Sunak got a note in the early hours when he was chancellor and working through a vast stash of Treasury papers with the comment, “wrong graph here”. So as one longstanding Hunt ally puts it: “The arrangement was really part of a ‘welcome pack’ for Jeremy to show how seriously Sunak wanted him on board at the most difficult time in the government’s history.”
Besides the open-handed gesture, it’s also a sign that Sunak wants to keep his chancellor close – and available.
The deeper context to their dealings is of course the disastrous implosion of the Conservatives – a long tail of woe that commenced with the inability to handle Brexit (Sunak was Brexit-ish, Hunt solidly Remain). Thereafter came the chaos of the Boris Johnson tenure, multiple tribulations of Covid, disgrace of Partygate, defenestration of Johnson and the short-lived but damaging “crazy days” premiership of Liz Truss. Now Sunak, having inherited the top job without a clear mandate as the “smash glass in emergency” PM, has the task of dealing with a lengthy global recession, poor UK growth outlook and a Labour party under Keir Starmer that is gunning for him with deadly precision on his political judgement.
Sunak, it is easy to forget is still a political ingénu when it comes to the speed and decision-making that is necessary for a PM to survive mishaps and worse. His fumbling response to revelations that Gavin Williamson, whom he had restored to “without portfolio” ministerial status despite a history of poor conduct with colleague, left Hunt who was not keen on the revival, look pokerfaced on the frontbench. Sunak dodged and weaved through a bout of punishing debate – flanked by a mixed-blessing home secretary in Suella Braverman, whose appointment is intended to toughen up the government’s pitch on controlling immigration to squash a divided Labour party on the issue.
But keeping this fissile Cabinet mix steady is testing Sunak and is also the reason why the frontbench has so many returning “K-Tel greatest hits” (or misses, depending on your view). Michael Gove nodding sagely at required moments as levelling-up secretary, is intended to help shore up the wobbling Tory ascendancy.
Personal relations between Hunt and Sunak have been cordial, rather than close. Hunt is a technocrat, who enjoys tussling over the finer points of health policy. (His most senior previous role was as foreign secretary but the role in which I have experienced him at his most lively and invested was as health secretary from 2012 to 2018.)
NHS budgets and the handling of explosive issues like the impending threat of a strike by nurses over a low-ball 3 per cent pay rise offer and unions threatening strike action, on top of a crippling backlog in the health service, are a combination of “Pandora’s box” issues, which the government is hard-pressed to handle while maintaining its claim it is strengthening fiscal stability. Sunak’s focus has always been clear on value for money in the NHS – one former candidate for a top job recalls that as chancellor, his angle on NHS England’s top management was that they were given to “writing plans they could not deliver on”. His approach was basically, “what can you do to stop up wasting money and get it to the right places?”
Hunt would have sympathy with that efficiency drive but also a deeper institutional knowledge of why it has proved so hard to deliver, and concerns over the inability to upgrade the NHS workforce (simply adding nurses and doctors is a palliative solution – but not one that can satisfy the need for a very differently geared NHS to improve services and address the glaring social care deficit).
Expect more tussles behind the scenes over this – and who is “really” in charge of NHS funding, over the head of Steve Barclay, the health secretary.
Taxes and which to raise or freeze are the other preoccupation for the new Whitehall neighbours, who are having regular “think the unthinkable” meetings about ideas like allowing councils to raise tax on larger houses and a total reversal of Truss’s “tax cuts for the rich” measures by adding pain for higher earners, while desperate to avoid a rebellion by former backers of the Truss-Kwarteng low-tax offer that set off a crisis in the markets.
Hunt has surrounded himself with experience on tricky tax and markets matters, bringing Rupert Harrison, George Osborne’s adviser and since 2015, a fund manager for the BlackRock behemoth. Harrison, a dashing and agreeable social presence, is a popular figure among the old Cameron-Osborne wing, thought a more critical reckoning might point out that he was a co-architect of austerity policies which sapped resilience in local council provision and public services. And Hunt tends to the “orthodoxy” the Truss brigade were not entirely wrong in questioning – he tends to rely heavily on people who were in top aide roles, also appointing Karen Ward from JP Morgan Chase and a former chair of the council of economic advisers under Philip Hammond post-Brexit.
Sunak, aware that his frontbench is noticeable male-heavy for 2022, has attempted compensation by anointing a slew of female advisers, headed by the sharp-as-a-tack Amber Botton, the focused former Sky and ITN journalist now in charge of Number 10’s previously ramshackle communications machine. She is assisted by a Sunak loyalist, Nissy Chesterfield, who has a “safety first” reputation among hacks, but has also been alongside her boss for long enough to know what he will warm to or worry about. Old friends like James Forsyth at The Spectator (they met at Winchester and Sunak was his best man) and his wife, the Bloomberg writer and short-lived Number 10 spokeswoman Allegra Stratton.
A renewed focus on communication is a sign that Sunak, who enhanced his approachability with a serious of smart viral videos in the leadership campaign, is serious about the fight ahead with Labour – and has not given up hope at least of denying Starmer a majority, if he can avoid an economic skyfall.
Crucially, Hunt and Sunak’s intention is to reassure the financial markets that Britain not a busted flush – with additional council of advisers roles for Gertjan Vlieghe, who has been a leading player on the Bank of England’s crucial inflation-decider, the Monetary Policy Committee, and now works at a major US hedge fund. One chairman of a major bank puts it like this: “At the moment, the markets are in resting mode when it comes to the UK. They are waiting for the 17th (the date of the delayed autumn statement) to make any moves and the new team in charge needs, most of all, to be sure they don’t set off another avalanche and investors run even faster for the hills.”
The two families will find their lives much more entwined than they could have envisaged – in some ways, this is an accidental chancellor-PM duo, created by circumstances, so they are all getting to know one another at speed. Akshata Murty, Sunak’s wife, is the daughter of NR Narayana Murty, the Infosys founder – and a major tech investor in her own right. Akshata, a quietly spoken presence with a love of bright designer fashion, long skirts and (very expensive) footwear, has a family shares portfolio of over £700 million and needs to square off this side of her life with the unofficial but important role of First Lady in Downing Street.
Low-key friendly gestures are her style – staff say they like her courtesy (she has been quick to learn the names of the door-openers and garden-room staff) and, giving the family labrador, Nova, a poppy dog collar for the Remembrance season was a savvy stroke.
The Sunak-Murty household has had one warning of how living in the ultra high net worth world can backfire – they were sorely ill prepared for criticism of her non-dom status, which brought tax advantages in the UK, and outrage over her family continuing to do business in Russia after the invasion of Ukraine. Backpeddling has occurred on both scores – but there is a tone-deafness that the very wealthy acquire and the Sunaks will need to shake off if he is to be serious about remaining in politics, rather than seeing it as stopgap before returning to business and the calmer delights of the first-class lounge.
Foreign Secretary Jeremy Hunt and his wife, Lucia, arriving at Buckingham Palace in November 2020
For downtime pursuits, Sunak and Hunt are both fitness fanatics – he works out and meditates daily, Hunt once got so lost on a long run in the hills in Surrey that he had to ask a random householder to allow him to phone home and be collected.
Both will have parents-in-law in tow in the tradition of Indian and Chinese families – Hunt once told me he was heading home from a long ministerial shift to be sure to find a major. multi-course Chinese cooking session involving all his acquired family underway in the kitchen.
Sunak, who has a large property portfolio, might avoid too much kitchen activity by having a flat in Kensington set aside for his wife’s family visitors. It is all very super-successful, go-getting global Britain. But the day job is dealing with the national headaches of impending job losses, inflation, angry striking workers and a febrile party. The golden duo are the rescue squad for UK plc and the self-harm of the Conservatives – and, whatever their previous successes, that is the hardest turnaround yet.