FOR those who regularly read my columns or have seen me interviewed in the past month, it will not come as a surprise that I am very pleased Rishi Sunak is now our Prime Minister.

He enters Number 10 with perhaps the most challenging in tray since Winston Churchill in 1940, and certainly since Margaret Thatcher in 1979, with the UK amidst an economic crisis.

Factors out of our control, such as the Russian invasion of Ukraine, global energy prices and the lingering impact of Covid-19 have resulted in serious inflationary pressures and the Bank of England has had no choice but to raise interest rates, raising mortgage repayments and rental costs for millions of families.

These problems are not unique to the UK; inflation in the Eurozone is running at virtually the same level as the UK and even Germany, Europe’s largest economy, has the same inflation rate as ourselves.

But in the past three weeks these difficulties were compounded by the ‘mini-budget’ which outlined tax cuts without a proper plan for how to pay for them.

The markets were spooked, interest rates rose and the pound fell. This episode should serve as a reminder to those who have advocate massive increases in public spending, without a properly costed and realistic plan as to how to pay for them.

We must return to fiscal discipline and sensible public spending, and fool ourselves in to believing that we can have both lower taxes and better public services without serious levels of additional borrowing. Rishi is a realist with serious economic credentials and the markets have reacted positively to him becoming Prime Minister.

The top priority for the Government must be retaining the confidence of the markets and bearing down on inflation and the cost of living. This will include an assessment of both tax and public spending.

On the spending side to take just one example, what should the spending response be to Russia’s more recent aggression? And on tax how do we best balance its impacts on those who are less well off compared with those who have higher incomes?

These will be among the many debates over the coming weeks and I will be contributing to those discussions after my appointment as Secretary of State for Work and Pensions. A hugely challenging role.

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