Countdown: Rishi Sunak becomes British Prime Minister

 

Rishi Sunak becomes British Prime Minister and this in itself is a bit like a Christian entering the Roman Colloseum to be eaten by lions.

Given the fate of his precedecessors in recent times, the newly elected Prime Minister is well advised to keep his friends close and his enemies closer.

Perhaps this is the idea of integrating his Cabinet with people from various sides of the political map of the Conservative Party.

Hopefully, his political honeymoon will last longer but, as always, in British politics 24 hours seem like an eternity and he is very much aware that he is cruising along very treacherous waters.

It has been well established that when the electorate votes, the electorate votes for a particular political party and not for an individual. Boris Johson managed to get a majority of more than 80 seats in the House of Commons and this, at least theoretically, would give him enough room to maneuver. Having said that, with such a majority neither Boris Johnson nor Liz Truss managed to survive. The issue is then not British voters as a whole, but loyalties within the Conservative Party. For many, having avoided a General Election until now is a blessing as many risked having their seats go up in smoke if a General Election took place in the present circumstances.

The next hurdle is January 2023, month when travelling fares are usually adjusted according to rate of inflation. The British government managed to alley fears about utility rates rises until April 2023, but it cannot go on providing lifeboats if inflation keeps going up. Although TFL is said to have been thinking about a 4% fares rise, TFL has no control of other areas of public transport. The present inflation rates is above 10%. Rises can only be avoided with bigger subsidies and in the end no one wins because bigger subsidies are paid with borrowed monies. If we try to avoid borrowing then we have to think about higher taxes or budget cuts.

Lizz Truss bet on lower taxes as a way of boosting economic activity. Rishi Sunak campaigned to avoid tax cuts and therefore will have to get better results to avoid entering a cycle of higher taxes and falling tax receipts that could ultimately push the country towards austerity budgets.

Inflation is eating away public budgets. If this goes on, very soon public administration bodies, local and regional authorities will ran out of money and will be unable to maintain service levels.