• Development Intelligence

The Dishy Rishi Reality

In the end, reality always asserts itself. The fantasy of Truss spectacularly and painfully imploded. The equally deranged fantasy of Boris 2.0 has gone up in a puff of blonde smoke, thank the living Lord. And the human mirage that is Penny Mordaunt has evaporated before our very eyes just as we all arrived at the Tory leadership election deadline.

So what should dishy Rishi do now?

First up he needs to appoint a cabinet. Jeremy Hunt can't go anywhere, clearly. Indeed, the dream team of dishy Rishi and the Huntster and their more realistic economic medicine, will likely make gilt yields go down, sterling go up and the fear of bond markets once more become a niche sport for backroom financial journalists only. But the Huntster aside, Rishi needs a cabinet of all the talents – such as they are in the Conservative Parliamentary party in October 2022! No more of that silly Truss nonsense of sacking everyone you don't like from any other faction. No, he needs to include Truss types, Johnson acolytes, even the intellectual vacuum that is Penny Mordaunt in significant positions in his cabinet.

Next comes the really tricky bit: he and the Huntster need to balance the books to the satisfaction of the markets. That means taxes up and spending down. A tricky proposition for sure politically, but one which rational voters will begrudgingly accept needs to be done. Rishi knowing the Treasury so well could be a great help here in some ways, but an ex-chancellor managing a new chancellor in the midst of an economic crisis has all manner of potential to not go well.

The third item on the list is clearly inflation. The OBR projections (should you ever choose to believe that particular work of constantly moving fiction) are that inflation will trickle back down to under 2% during 2023. Everything that the new dream team does must be focused to that end.

Then come the more thorny political hurdles. How to see if mortgage rates can be pushed down more quickly so all those Tory voters currently sitting on alarmingly ascending mortgage payments don't fall into financial problems and thus in the near future refuse to ever vote Tory again. (A point to note, the same OBR projections have mortgage rates still well above 5% by the time the next General Election must occur). Then there are the negotiations with the EU over the NI Protocol. There is no doubt that Rishi and the Huntster will be welcomed more positively in Brussels. Could there be some helpful movement there?

Longer term, what is the real political aim of the Rishi government? In reality, they're probably fighting to ensure the Tories lose the next General Election rather less badly than it looks like they could right now. That election is likely in late 2024 or maybe even in January 2025. There is of course the outside dream they might be able to turn things around enough to actually win the election, but in truth it seems a pretty forlorn hope right now.

Times are tough. Governing right now is going to be truly horrible.