Rishi Sunak became prime minister of UK on 24 October 2022. Thisdoesn’t mean that he will be the prime minister of UK till next general election. Gavin Williamson already resigned over bullying allegations. The political turmoil in UK started with former prime minister Boris Johnson’s resignation on 7 July this year.
Boris Johnson was forced to resign due to Chris Pincher scandal and the party gate. Boris Johnson was facing criticism from within the conservative party and from the opposition for breaking COVID laws and gathering in Downing Street during lockdown. Then came the Chris Pincher Scandal, where Boris Johnson appointed Chris Pincher as deputy chief whip, despite allegations against him for sexual misconduct.
Resignation of cabinet ministers and parliamentary private secretaries led to Boris Johnson’s resignation. It started with former chancellor of exchequer (finance minister), Rishi Sunak and health and Social care secretary, Sajid Javed’s resignation on 5 July 2022. Since then, the entire episode of election for new prime minister, the campaign, and everything that took place in UK politics looks like orchestrated.
Internet user from India, Pakistan and UK were quick to react; Rishi Sunak is from Indian origin, he is not fit for the top job in UK, a proud moment for Indians, etc. Rishi Sunak was born and raised in UK. His education was from Oxford and Stanford University. He is an achiever. His parent’s Indian origin is not the right yardstick to measure his ability to lead UK. Indian media said that UK is not ready for Rishi, when Liz Truss won election against Sunak. Now it’s time to ask; Is India ready to accept a person for the top job, whose ancestors are from a foreign country? Couple of years ago, India wasn’t ready to accept Congress president Sonia
Gandhi as prime minister, which made her appoint Manmohan Singh.
The election campaign following Boris Johnson’s resignation went for over six weeks. It created a political awakening in UK. The election campaign by Liz Truss and Rishi Sunak was full of promises and reassurance to
the public. It worked like an image makeover for the Tory party.
Issues concerning NHS, reducing the cost of living, reducing energy bills, energy supply and economic growth were the promises made by Rishi Sunak and Liz Truss. Both Rishi Sunak and Liz Truss had different views, opinion and solutions for the pressing problems of UK. This farcical election to choose a new prime minister was in the midst of a global crisis. But conservative party is used to such change in leadership during crisis. Most of the present day problems of UK are the result of what subsequent governments in UK did in the last two decades. Pandemic and the war in Ukraine was unexpected, and UK was not prepared for both. UK and Europe was dependent on Russia for energy.
Liz Truss went with a magical solution which didn’t go as expected. Or, her victory in election and she becoming prime minister was to try a magical solution, where her masters had a plan to bring back Boris Johnson, if she fails in her attempt. In his farewell speech, Boris Johnson hinted it where he compared himself to Cincinnatus, who was recalled from his farm by ancient Rome to repel an invasion.
Liz Truss said that she will open a new era of growth by shaking up Britain’s economy. It was a great opportunity for Liz Truss to lead her party into victory by finding a practical solution for the crisis. Truss promised economic reforms through tax cut. Slashing tax for small business owners and for large scale investments in renewable energy and manufacturing sector to create job. It could be a solution for UK’s long term energy needs. But offering tax cut for large corporations who made millions even during pandemic is a crime. Tax cut for top 25% rich will widen the gap between rich and poor.
On 23 September, treasury chief Kwasi Kwarteng unveiled the Truss government’s vision for growth called mini budget. 45 billion pounds worth tax cut which the government said will create jobs and improve living standards. But the government didn’t have any plan to pay for the tax cut, other than extra
borrowing.
This led to investors worry that public borrowing will balloon out of control. The immediate reaction of market was devastating. The pound plunged to a record low against US dollar, the cost of borrowing soared, and the bank of England was forced to step in to buy government bonds to avert a bigger financial crisis. It became a global embarrassment for Truss and Kwarteng when IMF used blunt language to tell them to rethink.
She learnt that what treasury is doing with tax and spending ( Fiscal policy) cannot be at odds with what the bank of England is doing with interest rates (monetary policy). On October 14, Liz Truss fired Kwarteng and went on a course correction only to resign soon.
A faction of conservative leaders liked immature decisions of Liz Truss. They thought that it will be an opportunity for Boris Johnson’s comeback. A poll published by YouGov on 18 October suggested that 32% of conservative party members wanted Boris Johnson back, if Liz Truss resigned. Rishi Sunak was the next popular option at 23%.
Investment in renewable energy like wind and solar power is a solution for the climate goals, long term energy supply and will create jobs. But this cannot reduce the raising cost of living in UK. Price rise and inflation is a global problem due to pandemic and the ongoing war in Ukraine. Rishi Sunak was of the pinion that the tax cut will increase the interest rate, which is true. At the same time, increasing the minimum wage also will increase the production cost. So, there isn’t any quick fix for the present economic crisis. But reducing the cost of fuel will reduce the price of all goods and services. Tax waiver on fuel and electricity will help to control inflation. Chancellor Jeremy hunt plans to hike the windfall tax on oil and gas from 25% to 35%. It will not do any good. Reducing the fuel price in UK will be an effective measure to control inflation.
It is a shared responsibility of every nation to protect and preserve this planet for the next generation. It also means avoiding devastating natural calamities and health hazards for the present generation. It is with this aim, leaders from across the globe met in Glasgow from 31 October to 13 November 2021. This year the UN climate change conference (Cop27) is being held from 6 till 18 November 2022 in Sharm El-Sheikh, Egypt to pursue the climate goals.
A major coal-fired power plant in France was restarted in October 2022, after ten months of shutdown. The power plant was shut to achieve climate goals. Now France is left with no other choice than to reopen it. Greece and Germany are planning to keep the coal based power plant running for longer than previously planned.
Netherlands removed cap on the amount of power it generates from coal plants. In Austria, authorities are converting a gas fired power plant into one that runs on coal. Import of thermal coal used for power generation from Australia, South Africa and Indonesia were up by more than eleven folds in the four months after Russia invading Ukraine. This is a serious threat to our global climate goals.
Liz Truss said repeatedly that she will reduce the soaring energy bills and will deal with long term energy supply. These statements made us wonder as what she can do better than Boris Johnson? Now, it is time to ask; what Rishi Sunak can do better than Boris Johnson? Boris Johnson was not asked to resign due to his incompetence. He was asked to step down for employing someone with bad repute and for partying during lockdown. He is one of the most courageous leader in the world. He flew to Ukraine and addressed Ukraine parliament on 03 March 2022, when Russian troops were shelling Ukraine.
When Russia stopped gas supply to Europe through Nord Stream-1, European leaders were talking about capping the price for Russian gas and oil. And this is not hypocrisy. What they didn’t say is that they were of the opinion that either they can help Ukraine to defeat Russia, or a prolonged war will weaken Russian economy. Thus Russia will be left with no other choice than to sell oil and gas to Europe for a price decided by Europe. But these two hypothetical situations are very unlikely. Russia has close ties with China and India. Russia and China declared no limits partnership on 4 February 2022. Russia is a reliable partner of India from several decades.
From March this year, combined oil imports of China and India from Russia overtook those from the 27 European union members. Sri Lanka is benefiting from discounted Russian oil. Myanmar also is planning to import oil from Russia. Recently, China asked its state owned gas importers to stop reselling to Europe.
Europe is against Russian invasion of Ukraine, but they still need Russian gas and are willing to purchase as much as they could.
Russian oil is already cheaper than the market price. Moscow said that they will stop supply to countries who try to impose price caps. OPEC members and Russia together are trying to raise oil price with big supply cut. OPEC plus members know that Russia agreeing to supply oil at capped price will effect their market and margin significantly. Recently, Saudi Arabia slammed Biden for releasing fuel from Strategic petroleum reserve, because they look at it as manipulation.
What Liz Truss should have done as prime minister of UK:
Liz Truss became prime minister of United Kingdom on 5 September 2022. Nord Stream pipelines were sabotaged on 26 September 2022. Russia blamed UK navy for the blast. Liz Truss could have used her experience as foreign secretary to work with Germany and United States to end war in Ukraine. She negotiating with United States and making Germany negotiate with Russia to end war could have been a clever move. A negotiation which could have helped Europe to buy Russian oil and gas without price capping, if Russia agrees to pay war reparation to rebuild Ukraine. It could have been a solution for short term energy needs of UK and Europe. Liz Truss could have been a global leader, if she were successful in ending war in Ukraine. But there wasn’t any such attempt from her. Now united
states is in talks with Russia. Few days ago, US urged Ukraine to engage in talks with Russia to end war, as it is taking a toll on world economy.
During his election campaign against Liz Truss, Rishi Sunak spoke about penalising those who miss NHS appointments. People can miss appointments due to a variety of reason. Penalising for missed appointment is not at all acceptable, unless there is a mechanism to void it.
A simple voice response unit, integrated with an android and apple app will be effective for booking, cancelling and rescheduling NHS appointments. An interface which show the slots available to see doctors on a real time basis. It won’t be expensive to build and maintain. Those who are comfortable with smart phones can use app and those who are old can call the automated system and follow voice prompts. It helps to avoid missed appointments. People who can’t meet doctor as planned can cancel or reschedule appointment.
The controversial £360 million NHS England Data Platform deal to Palantir will be finalised by the government in the coming weeks. Palantir is a software giant run by a billionaire who backs republicans (Trump) in USA. It is a NHS project to collect and store personal and medical records of millions on a biggest health data platform in the world. Name, address, date of birth, health condition, medications, medical notes are some of the personal information that are going to be stored on the data platform. These information will be collected from everyone without their consent and will be stored on the platform.
The world is moving towards more advanced data collection for medical research and analysis using automation, where the records will be de-identified. Companies as big as Google is into this business. It will reduce waiting time, speed up diagnosis and will help people get home quicker.
Palantir’s credibility is challenged, because it has worked with boarder forces, spies and police. The credibility of Palantir who will collect and process the data should be scrutinized further. In other words, it should be discussed in the parliament. The contract notice for the project is awaiting health secretary, Steve Barclays signature. And the undue haste in awarding the contract is not explained.
Finalising India-UK free trade pact will help to end shortage of nurses and dentists at the earliest.
There is a difference between administration when it is business as usual and crisis management. Any crisis is an opportunity for someone to exhibit his extraordinary leadership qualities. A good leader will take extreme measures to overcome a crisis. United Kingdom is a paradise for super-rich, because of the tax leeway they enjoy. This is acceptable when it is business as usual. Now it is time to take harsh measures to make the super-rich contribute more to the country. Chancellor Jeremy hunt’s 45% tax to country’s top earners which will kick in at £125,000 is good news, if implemented as planned.
Conservatives should let go their reputation of low tax party to save economy. Perhaps, Rishi Sunak will also loose a small portion of his family wealth, if he takes harsh decisions along with what Jeremy hunt has planned.
An expert committee should be formed to find more ways to improve government revenue. Finding ways to increase revenue for government could mean taxing heavily on luxuries enjoyed by superrich like private jets, yatch, super cars, etc. It makes more sense, if UK were to consider its commitment to global climate goals. The government will be mean to only ten percent of country’s population. But it helps to win next general election, which is just two years away. When opposition leader Keir Starmer asked Rishi Sunak about taxing the super-rich, he spoke about compassionate conservative approach. A straight forward question was answered in a diplomatic way. Such approach will make people in UK suffer more. Increasing the tax on large corporations while providing incentives to start ups and small businesses who struggle for survival should be the approach.
Economic slowdown caused by pandemic and the ongoing war in Ukraine is a global crisis. Rising energy bills and cost of living crisis can lead to recession in everal countries. A solution for the same should include best practices from across the globe and an attempt to stop the war.
The UK government can consider plans similar to bipartisan infrastructure bill, Inflation reduction act which lowers prescription drug prices and student loan waiver to provide relief from increased cost of living. The government in UK should cap the price for essential drugs like insulin, medicines for high blood pressure, cancer, cardiac problems, etc. The price of life saving drugs which needs to be consumed till death hould be capped. If necessary, the government should give subsidy. Australian government declared subsidy for wearable insulin pumps for those living with type-1 diabetes. Such welfare schemes will help thousands of households in UK and they will thank conservatives on the next election day.
The government in United Kingdom, headed by Rishi Sunak can come up with stimulus package to pay for tax leeway for those have maxed out their credit limit on credit cards for an year or two. Similarly tax leeway can be extended to people, whose mortgage and car loan repayment is more than 50% of their monthly income.
Restructuring mortgages by writing off the interest and any penalty applied during pandemic will be great initiative. It is no loss for banks, because more default loans will make banks write off much more than just interest and penalties. Due to the increased cost of living, those who live on social insurance will not be able to pay their bills. They lack purchasing power. The government should come up with a plan to give additional financial aid to those living on social insurance. A plan for economic revival should include job creation, economic growth and supporting the vulnerable. It should be aimed to stop inflation pushing more into poverty.
Liz Truss was quick to announce her mini-budget, just 18 days after becoming the prime minister of UK. Rishi Sunak do not want to jump the guns and is about to reveal his economic plan on 17 November 2022. We are yet to see what is in it to save Britain from plunging into recession.
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