The Empire Strikes Back?

Three PMs in seven weeks, budget chaos, shockingly high interest rates, inflation, energy crisis and a plummeting GBP speak a clear language. The only thing worse than the state of the economy has been the state of politics.

I lived in London in 2012 and had the privilege to vote in the local elections. I voted for Boris Johnson as Mayor of London. I liked Johnson. At that time, he was in favour of membership of the EU, he was unpolished, fearless, ambitious and charming, but at the same time a Briton of the classically educated sort. Being able to quote long passages from the Iliad in ancient Greek like Johnson is something few politicians can do — the closest we come in Sweden is a considerably more well-combed Speaker Andreas Norlén who can recite entire poems by Runeberg by heart.

But when Johnson became Prime Minister, something happened. Politics sometimes became irrational and difficult to understand. What was charming about Johnson's leadership style also became his downfall in the end. Johnson led his party straight into Brexit. And the appointment of the peculiar Dominic Cummings as chief of staff and the parties at No. 10 during the covid lockdown are among the things that will haunt Johnson for a long time.

At the same time, it should be said that Boris Johnson is very popular in Tory circles. Voters, especially the active ones in the Tories, like Johnson both as a person and as a leader. But charm is not enough to retain the leadership of Thatcher's old party. In the end, not only the parliamentarians had enough, but also some of the heavier ministers. The beginning of the end for Johnson was the resignation of then finance minister Rishi Sunak on July 5 this year.

Sunak was in the race to succeed Johnson already last time, but then he was punished by the party activists who saw him as the traitor who forced Johnson out. Instead, Liz Truss took over. Her weeks in office turned out to be completely disastrous. First, the government unveiled a tax cut package that sent shockwaves through bond markets, sending interest rates up by over a hundred basis points and the pound into a tailspin. And then Truss had to backtrack until it was obvious that she had not succeeded in anything other than making a weak economy even weaker and giving her party the worst opinion polls in recent memory.

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On Tuesday, Rishi Sunak took over as the new party leader, and thus the new Prime Minister. Sunak is a second-generation immigrant. He was born and raised in England by Indian parents, who in turn were both born in East Africa. Sunak's parents are what one could call upper middle class, his father is a doctor and his mother is a pharmacist. An academic and well-educated family but without a large fortune. However, all three children in the family had fine educations. Rishi Sunak, for example, attended the private school Winchester College - founded in 1382 - before continuing to Oxford and later obtaining an MBA from Stanford in 2006.

Sunak is the UK's first non-white Prime Minister. He is also a devout Hindu, also the first among the 57 Prime Ministers that the UK has had since 1721. For the UK's reputation in the Commonwealth, I believe it is of great significance - it shows that the country has truly gone from a colonial power to a country where even children of immigrants can reach the absolute top.

My lesson from having lived in London for a couple of years is about this very thing. London is a melting pot of people from all corners of the old British Empire. Britain has been unusually good at integrating all these people from different cultures and religions. The real class marker in London is not the colour of your skin but the school tie you wear and the clubs you belong to. Rishi Sunak, with his roots in India and Africa, is Prime Minister. And Sadiq Khan, a Labour politician with roots in Pakistan, is London's Mayor. And there is nothing strange about that – quite the opposite. 

Rishi Sunak managed his pound well. He went straight into the financial industry and became an analyst at Goldman Sachs, one of the world's largest and most demanding investment banks. He continued his career at two hedge funds and then married the daughter of one of India's wealthiest men. Today, Sunak is worth over GBP 700 million, which of course received a lot of attention in connection with the accession.

Sunak is talented and wealthy. As a former analyst, he is used to delving into masses of information and quickly seeing patterns and finding weak links. He has good experience in managing ministries and sitting in a government. He can make decisions and does not have to worry about his future income. He is something so unusual as a Brexiteer that even those who wanted to remain in the EU respect and like. He is young – 42 years old – good looking and has a wife and children. And he is, as mentioned, dark-skinned and Hindu. Additionally, he is a vocal advocate for LGBTQ rights and a modernist in his approach to his role and his party.

All these advantages will come in handy now. Britain is facing a wide range of pressing problems. And should Tory's opinion figures hold up on election day, we would see an almost complete erasure of this old party. Then another of Sunak's character traits fits well: according to his personal page on the Stanford alumni network, Star Wars is one of Sunak's "Skills and interests".

Maybe Sunak now benefits from one of Yoda's quotes from "The Empire Strikes Back": "Try not. Do or do not. There is no try." Because that is where we are now. There are no practice rounds, either in British economics or politics. The next British election must be held no later than January 2025. By then, Sunak must have turned both the economy and the poll numbers around. May the Force be with you.

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Stockholm on October 26, 2022

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Sven Otto Littorin

Partner, Stadsholmen Equity