Can Rishi Sunak the leader emerge from the gloom of tax rises and spending cuts?

UK's CFO faces challenge of delivering the inspirational moments that would make him a successful prime minister

Rishi Sunak must stop being a chancellor and prove he has what it takes to become a successful chief executive.  Photo: Downing Street
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It is early days but a nag is developing where Rishi Sunak’s suitability as prime minister is concerned. Has Britain got itself a chief of finance for a CEO?

In the corporate world it is well-known that the moneymen do not usually make the best chief executives. They require different skill sets. One is a number-cruncher, concerned with figures and spreadsheets, the other is a leader, manager of the big picture, someone who knows how to extract the best from their teams across all areas.

Indeed, often the role of a good finance director is to challenge the chief executive officer, to question the path they wish to embark upon. The former is a number two position.

In Britain’s government hierarchy, that traditionally is the job of the chancellor of exchequer. And in Britain currently, we have two chancellors.

Sunak, a former chancellor, appears to be taking a hands-on interest in the work of the present chancellor, Jeremy Hunt. Which begs the question, what is Hunt for?

Of course, the UK is in poor economic health but it’s the task of the chancellor and their Treasury department to come up with a convincing plan for treatment. That programme would then be presented to the prime minister and the rest of the Cabinet for approval.

Instead, we’re informed that Mr Sunak is engaged constantly on proposals to fill the public spending gap, that he devoted much of this past weekend to that conundrum. It was given as an excuse for him not wishing to attend the Cop27 climate change talks in Egypt. Latterly, the indication is that he has changed his mind and he may now go, but that only appears to be because his nemesis Boris Johnson is said to be going.

The signal his original non-attendance sent, that Britain is pushing climate change down its priorities — unlike the US and France, with their presidents Joe Biden and Emmanuel Macron both going to Cop — was bad enough. This, as well, after Mr Sunak removed the Cabinet status of the Cop minister, Alok Sharma.

Mr Sunak, a banker and hedge fund manager before entering Parliament, may be happiest poring over accounts. It could be his comfort blanket, his default. That is unlikely to make him a successful prime minister.

Inspiration or perspiration

The consultancy firm McKinsey once conducted a survey on whether chief financial officers make suitable CEOs. Noted McKinsey: “In our informal poll, for every respondent who believed strongly that CFOs make good CEOs, another vehemently opposed the idea.”

Respondents observed that “CFOs are often without leadership skills, are weak at motivating and inspiring teams, and have a propensity to retain rather than delegate control.”

We’ve been here before in the UK, most notably and recently when Gordon Brown took over from Tony Blair in 2007. Mr Brown, the long-time chancellor, was humiliatingly voted out as prime minister in the May 2010 general election.

Gordon Brown, left, took over from Tony Blair but was voted out. Getty Images

Mr Brown, too, spent the first part of his period as PM overseeing a financial rescue package, in his case in response to the 2008 banking crash.

Mr Sunak betrays signs of wishing to focus on the narrow task in hand rather than the broader long term. In a comment piece for the Mail on Sunday he went on at length about how he would be tackling the economy. Yet again we were told that “tough decisions” would be made.

Then, at somewhat breathtaking speed we were informed that once immediate issues were dealt with, he would be levelling up, delivering “world-class education”, putting 20,000 more police on the streets, controlling the borders and developing energy security. These and others he cited, were contained in the 2019 Conservative manifesto. But he offered no detail as to how, precisely, they were to be accomplished.

Rishi Sunak and Jeremy Hunt, left.

Rather, “we will build an economy that modernises and embraces the opportunities of Brexit, where businesses invest, innovate and create jobs.” This ignores the fact that so far, as even some ardent Brexiteers are beginning to concede, there has been precious sign of the so-called “Brexit dividend”.

The point about this current economic dip is that it’s temporary. Mr Sunak says so himself. We will get over it. “The confidence and determination that are the hallmarks of our great nation will carry us through the tough times and towards a new age of hope and optimism.” So, why does he spend so long dwelling on it? He should be projecting ahead and providing us with his detailed vision for the NHS, state schools, welfare, law and order, and managing climate change.

Also, doesn’t the prediction of a “new age of hope and optimism” smack rather of a wing and a prayer? Put him on to the economic crisis and he speaks of the need to balance the books, of making “difficult choices” to “get our borrowing and our debt back on a sustainable path.” Once that’s achieved, however, it’s back to the same old boosterism and platitudes.

There’s a reason why so few CFOs become CEO and fewer still become a successful CEO. Mr Sunak must stop being chancellor and prove he has what it takes to join that elite few.

Published: November 01, 2022, 1:38 PM
OPINION