Rishi Sunak or Penny Mordaunt will face an in-tray piled high with problems.
24 October 2022
The incoming prime minister will face a daunting set of challenges, exacerbated by the chaotic legacy left by Liz Truss.
Here are some of the most pressing issues in the No 10 in-tray before Rishi Sunak or Penny Mordaunt.
– The economy
Inflation is running at a 40-year high of 10.1% according to the latest consumer prices index figures, causing a significant squeeze on household finances.
The energy package put in place by Ms Truss will help to ease the pressure on bills and should prevent inflation reaching the peaks that had been predicted, but the new prime minister will need to decide what help will be on offer beyond April.
The biggest task facing the incoming prime minister will be reassuring the financial markets, after sterling and the price of government bonds saw wild fluctuations during the short-lived Truss administration and the mini-budget fiasco.
Ms Truss had gambled everything on boosting economic growth, but instead her successor will inherit a country heading for a potentially prolonged recession.
The rising cost of living, and the failure of wages to keep pace, has led to a wave of industrial unrest.
Strikes have already hit the transport networks and further action could be taken by public sector workers, including nurses, teachers and civil servants.
The shift in Russian tactics towards targeting civilian infrastructure and city centres has underlined the enduring threat posed by Vladimir Putin.
The risk of a nuclear escalation is being taken seriously in the West and the risk of an accidental spark triggering a wider confrontation was underlined when a missile was released in error by a Russian jet near a UK spy plane over the Black Sea.
The sweeping review of foreign and defence policy carried out under Boris Johnson labelled China a “systemic competitor”, while Nato’s new strategic concept has branded Beijing a “challenge” to “our interests, security and values”.
But China’s economic clout means it will be necessary to balance trade benefits with caution over Beijing’s political motivations.
The risk of tensions between China and Taiwan boiling over will also feature highly in the new prime minister’s foreign policy concerns.
Xi Jinping has now tightened his grip on power with an unprecedented third term in office, something which could embolden him in taking a more assertive role against the West.
The clashes between Chinese officials and protesters outside the consulate in Manchester shows there is a domestic impact to Beijing’s approach.
– Health and social care
Covid backlogs, record waiting periods in A&E, and unprecedented pressures on ambulance services are just some of the challenges in the NHS in England facing the new prime minister.
They will also have to oversee the introduction of the new social care system from October 2023, intended to see that nobody pays more than £86,000 for the personal care they need, while also coping with an ageing population and rising demand.
Mr Johnson may have campaigned on the slogan “Get Brexit done” to win the 2019 election but the reality is a long way from that.
Pushing ahead with the Northern Ireland Protocol Bill, allowing the UK Government to override elements of the UK-EU deal is likely to provoke a fierce parliamentary battle in the Lords – Tory grandee Lord Heseltine warned it would be “massacred” – as well as outrage in Brussels.
There is also the prospect of fresh elections in Northern Ireland if the DUP maintains its opposition to joining a powersharing executive at Stormont by Friday.
The DUP is refusing to nominate ministers to form a new executive until the Westminster Government takes decisive action on the protocol.
– Climate change and energy
The spike in gas prices following the Ukraine war has focused attention on the way the UK’s energy is generated, while meeting the commitment on net-zero emissions by 2050 will also demand major changes.
Support for renewables and nuclear power are seen as ways to both improve energy security and meet commitments to reduce carbon emissions.
But it remains to be seen whether the incoming prime minister will risk a political row over fracking to boost domestic energy security in the way Ms Truss did.
The number of people risking the dangerous crossing of the English Channel has already hit more than 38,000, around 10,000 more than in the entirety of 2021.
But as well as coping with the small boats issue, the new prime minister will also have to deal with industry demands for more migrant workers to be given visas to come to the UK, with labour shortages one of the main concerns voiced by employers across a range of sectors.
The dispute within government over migration contributed to the exit of Suella Braverman as home secretary, one of the factors which destabilised the Truss administration.
– Reuniting the party
A third leader in two months illustrates just how unruly the Tory party has become.
The scars from the bitter leadership battle between Liz Truss and Rishi Sunak over the summer are still fresh, while the turmoil of her brief time in office has added to the sense of despair within Conservative ranks.
– Boris Johnson
He claims he had the support required to run and believes he could have been back in No 10 by the end of the week.
But despite his confidence in his own abilities and popularity with members, he did not throw his hat into the ring.
Managing Mr Johnson – who clearly still harbours a desire to return to Downing Street – will be a further challenge for the new prime minister.