How long before Sunak calls a general election?
Broker Samuel Mather-Holgate has pulled no punches in his assessment of Rishi Sunak’s first week (and a bit) in office.
Mather-Holgate, an independent financial adviser at Mather and Murray Financial, said that while Sunak was exactly what was needed, from a Conservative and immediate economic perspective, his appointment of the Home Secretary was questionable.
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“He appears to be a polished performer, and is committed to the manifesto of 2019,” he said. “However, just like a posh car with an engine that is about to go pop, when you look under the bonnet things become ugly.”
According to Mather-Holgate (pictured), Sunak was seen by many in the Tory party to be the architect of Boris Johnson's downfall.
As such, he said that those who love Johnson would not forgive this, and Mather-Holgate believed that at the first signs of weakness they would pounce.
“His decision making also has to be called into question. Appointing Suella 'Cruella' Braverman has turned out to be a nightmare. She is cavalier with national security and has the morals of a hyena,” he added.
Mather-Holgate suggested that Braverman’s handling, and subsequent performance in the House of Commons, of the Manston immigration centre crisis had been incendiary and inept in equal measures.
Tax burdens
Mather-Holgate outlined that Sunak also faced battles with fellow Conservatives over being the leader of a traditionally low tax party whilst inflicting the highest tax burden on the country in over 70 years.
“This is in stark contrast to Truss, who flattened him in the vote of party members with her low tax philosophy,” he said.
The way Sunak proportioned this tax burden, Mather-Holgate believed, would be ammunition for the opposition.
“As Labour want, will Sunak tax those with the broadest shoulders or will he tell us ‘we are all in this together’ as one of his previous party leaders did,” he said. “Although Sunak is the best person for the job, the Tory party is ungovernable in the medium term.”
General election
Mather-Holgate believed the party might stay together until Christmas, but with so many factions amongst the Tories and discipline out of the window, he expected it would not be too long until Sunak had a mutiny on his hands.
“At that point, if the government can govern, it seems futile to select another leader when they will be inferior to the incumbent,” he added. “A general election will be called and I expect to see people at the polls in the summer.”
With the potential of a general election on the horizon, Mather-Holgate said that Sunak could not achieve much in the meantime.
The broker expected there to be opposition to most of the reforms needed to impact on policies affecting the housing market.
“Michael Gove is the right man for the job, to give Sunak credit for a good appointment. Gove has a track record of getting things done,” Mather-Holgate said.
However, he believed that with controversial plans and a party of ill-discipline, getting these reforms over the line and on to the statue book would be nigh-on-impossible.
Read more: Gove's return met with scepticism
Stability
However, according to Mather-Holgate, the housing market should benefit from Sunak being in charge as it brought stability.
He explained that this stability came from a leader who would not rock the boat, had settled credit markets, and signalled to the Bank of England that they did not need to go as far as they had thought, under Truss.
“That should mean that interest rates will be lower than they would have been, and in turn, means equity markets should be more buoyant,” Mather-Holgate said.
Despite this, he noted that Sunak could not push back the tide, and he believed the market was at the start of a recession, which could come about sharply.
“This will mean property prices stagnate, businesses go bust and unemployment rises, although the length of the recession has probably shortened with Sunak at the helm,” he concluded.
