Rishi Sunak went head to head with Labour leader Sir Keir Starmer at his first Prime Minister’s Questions on Wednesday, pledging to tackle inflation and restore the economy to good health.
But on only his second day in the job, he was forced to deal with a first controversy — his decision to reappoint Suella Braverman as Home Secretary, less than a week after she was forced to resign from Liz Truss’s government over a breach of the ministerial code.
Mr Sunak was also confronted over his wife's previous non-domiciled tax status, and made his first move to reverse one of his predecessor's policies, saying he would return a moratorium on fracking.
Just half an hour before PMQ's questions got under way, the Treasury announced that the fiscal statement to set out the next steps in the cost-of-living crisis, giving more detail on the plans which replaced the controversial mini-budget, would be delivered more than two weeks later than scheduled, on November 17.
British government bond yields rose on Wednesday after the announcement.
Chancellor Jeremy Hunt said it was “prudent” to delay his fiscal announcement and that it would be “upgraded to a full autumn statement”.
During PMQs, Mr Sunak - who took the reins on Tuesday with a promise to fix Ms Truss's mistakes - also dismissed concerns about the appointment of Ms Braverman, saying she had made an error of judgment and recognised this, brushed off calls for a general election and would not say whether benefits would rise in line with inflation.
Mr Sunak faces a daunting in-tray, confronting what he has called a “profound economic crisis” and uniting a fractured party whose reputation has been shredded by months of scandals and rows.
He told the House of Commons the priority of the government would be to “reduce inflation", describing it as “indeed the enemy”.
“It makes everyone poor,” he said. “It erodes savings and that’s why it will be a priority of our government to grip and reduce inflation and provide support to those who need it as we do.” The UK inflation rate currently stands at 10.1 per cent, a 40-year high.
Mr Sunak dismissed the prospect of an election after a question from Sir Keir, saying the government had a mandate “based on a manifesto it was elected on”.
Sir Keir said Mr Sunak was “not on the side of working people”, claiming the move to bring back Ms Braverman was part of a “grubby deal” because he was scared to lose another leadership election, a sign that he was “weak”.
SNP Westminster leader Ian Blackford called for the prime minister to sack the home secretary, saying her appointment was a return to “sleaze”.
“The home secretary made an error of judgment but she recognised that,” said Mr Sunak, speaking exactly one week after Ms Truss proclaimed she was a “fighter, not a quitter” at her final PMQs, before she resigned the next day.
“She [Ms Braverman] raised the matter and she accepted her mistake. And that’s why I was delighted to welcome her back into a united Cabinet which brings experience and stability to the heart of government.”
Sir Keir alluded to the issue of Mr Sunak's wealthy wife's non-domicile status in the UK, which previously shielded some of her income from British taxes, saving her an estimated £20 million ($22.7m) as a result, according to some estimates.
She later pledged to pay UK tax on all her overseas income.
Asked by Sir Keir whether he will “get rid of” the status, Mr Sunak said: “I have been honest, we will have to take difficult decisions to restore economic stability and confidence and my honourable friend the chancellor will set that out in an autumn statement in just a few weeks.
“What I can say, as we did during Covid, we will always protect the vulnerable and we will do this in a fair way.”
Sir Keir also challenged him about a leaked video which showed Mr Sunak telling Tory members that government funding for deprived inner-city areas could be redirected to other areas.
Mr Sunak said: “I know the right honourable gentleman rarely leaves North London, but if he does he will know there are deprived areas in our rural communities, in our coastal communities and across the south, and this government will relentlessly support them because we are a government that will deliver for people across the United Kingdom.”
“He mentioned the last few weeks — I’m the first to admit mistakes were made and that’s the reason I’m standing here. But that is the difference between him and me. This summer I was being honest about the difficulties that we were facing, but when he ran for leader he promised his party he would borrow billions and billions of pounds.
“I told the truth for the good of the country, he told his party what it wanted to hear. Leadership is not selling fairy tales, it is confronting challenges and that is the leadership the British people will get from this government.”
Mr Sunak also suggested he would reverse the approval Ms Truss gave to fracking and claimed he “stands by the manifesto on that”.
Rishi Sunak's childhood landmarks - in pictures
During her short term as prime minister, Ms Truss had lifted a moratorium on fracking, arguing last month that strengthening the country's energy supply was a priority.
In parliament, Mr Sunak said he stood by a 2019 manifesto commitment on the issue.
Asked by a reporter if Mr Sunak's comment meant that fracking was "back in the bin", his spokesman said: "That's correct."
On the decision to delay the budget statement, Mr Hunt told broadcasters he wanted to confirm the plan would demonstrate debt falling over the medium term, "which is really important for people to understand", he said.
“But it’s also extremely important that that statement is based on the most accurate possible economic forecasts and forecasts of public finances.
“And for that reason the prime minister and I have decided it is prudent to make that statement on November 17 when it will be upgraded to a full autumn statement.”
Mr Hunt said he had discussed the move with Bank of England Governor Andrew Bailey on Tuesday night and he “understands the reasons for doing that and I’ll continue to work very closely with him”.
Long-dated gilt yields were up 8 basis points on the day as of 12.13pm, while inflation-linked bonds suffered heavier losses, with yields up mostly around 17 bps on the day.
Rishi Sunak wins battle to become UK prime minister — in pictures
