British economic crisis
The UK faces a slow-burn economic crisis that has gripped the country since the global financial crisis in 2008. Economic growth, productivity and wage growth have stalled in the West’s third largest economy.
Sunak’s policies aim to target both taxes and innovation. On the latter, Sunak has committed to boost public spending on research and development to 20 billion pounds by 2024-25. He will also look to set up taskforces on science, smoothen processes for obtaining research grants and create a cross-government approach to the sciences.
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He also hopes to cut taxes and make the UK a friendly place for business investment. Sunak will look to cut income taxes from 20% to 16% by the end of the next parliament. This would mean the largest cut to income taxes in 30 years.
He will also aim to reform capital allowances, reduce taxes for companies making investment and encourage investment.
China
Sunak has taken a tough stance on China. He has committed to closing down Confucius Institutes in the UK. These institutes are funded by the Chinese government and are seen as crucial tools for promoting Chinese soft power in the world. These Institutes have been accused of espionage, surveilling Chinese students abroad and functioning as a foreign arm of the Chinese Communist Party.
He has also backed an international alliance to defend against Chinese cybercrimes and has vowed to improve the ability of British intelligence to stop Chinese industrial espionage. He also supported blocking the acquisition of vital British assets by Chinese firms. He has taken issue with China artificially altering the value of its currency to promote business competitiveness and exports.
He has also been deeply critical of Chinese crackdown on pro-democracy protests in Hong Kong and the alleged violations of human rights of Uyghurs in Xinjiang.
Energy crisis
Sunak’s premiership will likely be made or broken by his response to the energy crisis gripping Europe. Household energy bills have skyrocketed and inflation has eroded living standards.
He has called for removing value added taxes on energy bills to ease the burden on families. In addition to the energy price cap that has been put into place, he will also deliver a temporary and targeted tax cut to help households. He will also have to decide on securing pensioners from increases in inflation.
Sunak has supported a manifesto pledge made by the Conservative Party to ban fracking. He has also eschewed Lizz Truss’s energy policy by refusing to back onshore wind production.
Immigration
Sunak has a 10-point plan on immigration. He wants to create an annual cap, set by Parliament, on the number of refugees accepted every year. He has committed to setting up a taskforce to track and combat illegal immigration to the UK. He also backed the government’s controversial policy to deport illegal immigrants to Rwanda. He will also back increased immigration enforcement and raids. He wants to force the French government to assist the UK in stopping boats carrying illegal immigrants from setting out from France. Failed asylum seekers and criminals will be sent back home.
India
India will likely continue to be a focus of the UK's foreign policy in Asia. Boris Johnson put into place a “tilt" to Asia in the aftermath of Brexit and a key focus of his diplomatic outreach was India. This is likely to continue, not least due to Sunak’s own Indian heritage.
The spotlight in coming weeks will be on the India-UK free trade agreement. Talks are reportedly deadlocked on a few key issues including business migration to the UK. While Sunak is understood to be in favour of an accommodation with India, his chosen Home Secretary Suella Braverman has taken a dim view of Indian migrants overstaying in the UK. This will likely create tensions in the relationship.
Elsewhere in Mint
In Opinion, Rahul Jacob writes on the greatest threats for China and the US. Can a weaker rupee boost exports? Vidya Mahambare & C. Veeramani answer. Narayan Ramachandran has great and some not-so-good news on India's poverty. Long Story profiles a 'Dronacharya' and his buzzing incubator of start-up dreams.
