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Former UK finance minister Sunak bids to replace PM Johnson
Global Banking & Finance Review®
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By William James and Farouq Suleiman
LONDON (Reuters) -British former finance minister Rishi Sunak said on Friday he was running to replace Boris Johnson, three days after helping to launch the cascade of resignations that brought the prime minister down.
Johnson announced on Thursday that he would stand down as prime minister after a mass rebellion in his Conservative Party, triggered by the latest in a series of scandals that had fatally undermined public trust.
Johnson’s imminent departure has added political uncertainty to an already difficult mix of soaring inflation, slowing growth and industrial unrest, set against a backdrop of war in Ukraine Britain’s ongoing struggle to adapt to life after Brexit.
“Someone has to grip this moment and make the right decisions. That’s why I’m standing to be the next leader of the Conservative Party and your prime minister,” Sunak said in a campaign video released on Twitter.
Sunak and Health Secretary Sajid Javid quit the cabinet on Tuesday within minutes of each other, setting in motion a chain of events that led to Johnson’s decision to step down.
The rules and timetable for the contest to replace Johnson are due to be set out next week by a party committee.
Sunak’s budget last year put Britain on course for its biggest tax burden since the 1950s, which critics said undermined his claim to favour lower taxes.
During the COVID-19 pandemic Sunak oversaw around 400 billion pounds ($481 billion) of economic support, avoiding a big jump in unemployment but letting public borrowing rise to a peacetime record high in the face of a historic slump in GDP.
Sunak’s popularity with Conservative lawmakers was later dented after he raised payroll taxes in April to fund higher health and social care spending, and announced plans to raise corporation tax sharply in 2023.
Sunak said in his resignation letter it had become clear that his approach to the economy had been too different to Johnson’s, as the two had tried to agree on the next steps for the country.
He continued on that theme in his candidacy announcement video.
“The decisions we make today will decide whether the next generation of British people will also have the chance of a better future,” he said.
“Do we confront this moment with honesty, seriousness and determination? Or do we tell ourselves comforting fairy tales that might make us feel better in the moment, but will leave our children worse off tomorrow?”
The number of endorsements needed to enter the race has not yet been announced but one senior lawmaker, Mark Spencer, who has a ministerial role in charge of parliamentary business, immediately announced his backing.
“In serious times we need a person with a proven track record. Rishi gets my full support,” he said on Twitter.
Sunak voted to leave the European Union in 2016.
($1 = 0.8312 pounds)
(Reporting by William James, Farouq Suleiman and David Milliken; editing by Michael Holden and Louise Heavens)
Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power. It is typically measured by the Consumer Price Index (CPI) or the Producer Price Index (PPI).
A financial crisis is a situation in which the value of financial institutions or assets drops significantly. It can lead to a loss of confidence in the financial system, resulting in severe economic downturns.
Brexit refers to the United Kingdom's decision to leave the European Union, which was formalized through a referendum held in June 2016. It has significant implications for trade, immigration, and economic policies.
Economic growth is an increase in the production of goods and services in an economy over a period of time, typically measured as the percentage increase in real Gross Domestic Product (GDP).
A budget is a financial plan that outlines expected revenues and expenditures over a specific period. It helps individuals and organizations manage their finances effectively.
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