‘You can’t have your cake and eat it’: Rishi Sunak talks to Charles Moore

The morning after the first one-on-one Tory leadership debate, Rishi Sunak came to 22 Old Queen Street to speak to Charles Moore for SpectatorTV. This is an edited transcript of their conversation.

CHARLES MOORE: Rishi Sunak, welcome to the offices of The Spectator. Just a preliminary – because you mentioned it first in the debate last night [Monday] – David Trimble died and you paid tribute to him. Almost the last thing he intervened on in public life was on the Northern Ireland Protocol. He was worried because he said it threatened the Belfast Agreement. Do you agree?

RISHI SUNAK: David Trimble was someone who did an enormous amount to support the Union and bring peace to Northern Ireland, and we’ll miss him dearly for that. What I’ve seen in the job that I’ve had is economically that the patterns of trade have certainly changed in a way that moves Northern Ireland further away from the orbit of the rest of the United Kingdom. And there are some very real challenges with the arrangements that are in place currently. I’d like to see those fixed and the Protocol bill gives us an opportunity to do that. But the door should always be there for a negotiated settlement with Europe, not least because it is a lot faster.

CM: Let’s go to the debate more widely. Why is there no more Mr Nice Guy?

RS: Well because half the time people are saying to me: ‘We’re not sure if you’re tough enough to be prime minister.’ And then when you are tough it’s: ‘Oh gosh, you’re too tough.’ I think these ideas really matter to me. I’ve deliberately chosen to say some things that probably aren’t that easy. But I firmly believe they’re the right things for our country and that’s why I’m going to keep talking about them passionately.

CM: But I thought we liked you because you were such a scrupulously polite person, and you were a little bit rude last night, weren’t you?

RS: I don’t know. I never, I think, was rude. I was just making sure that the points that needed to be debated were heard. I’ve got nothing but enormous personal affection and regard for Liz, as I think everybody knows.

CM: Do you regret that the frame, the form of all of this, is that you are invited to attack one another in public?

RS: I think it’s just fundamentally quite a hard thing to reconcile if you want to have a debate with two people head-to-head on live TV. The problem with these debates is they’re actually on an incredibly narrow set of topics. We didn’t really get a chance to talk about growth very much last night. The most important way to drive growth is by having an economy that is able to create new ideas and then spread them across the rest of the economy. And it’s something that we used to be very good at. We’re still pretty good at it, but we need to make sure that we’re the best place in the world for it. It’s about far more than tax cuts and the tax system. We didn’t talk about any of that last night, which is sad.

CM: No, but you could have. But you chose to make a big thing of something that probably isn’t a first-order question. So there is a difference between you and Liz Truss about tax cuts, but actually that’s not the big thing, is it?

RS: I believe in tax cuts. I believe in a lower-tax economy. Anyone who’s read anything I’ve ever written or heard any of the speeches I’ve given can see that. Of course I’m going to deliver tax cuts. I stood at the dispatch box and held up a big document that said ‘tax plan’ on it, with the direction of travel for where we’re going to take business taxes and personal taxes. I know no one’s particularly focused on that now, but those are the things I believe, and that’s what I will deliver as prime minister. I think there is a difference between us because I think there is enormous risk right now in launching on a huge spree of borrowing-funded tax cuts that obviously don’t pay for themselves. So really, we are putting that on the country’s credit card to the tune of tens of billions of pounds. I don’t think that’s right morally, but I also think that it runs the risk of entrenching inflation for longer and driving up interest rates. That was what I was pointing out last night. That is a difference.

CM: You had a big go at Patrick Minford, although you didn’t name him, on what he really thinks about interest rates and what they should be. But surely the fundamental issue here is that maybe Minford and Liz Truss are right if they’re saying that low interest rates have been very damaging for the western world. Government and central bankers have been working together in a way that has stopped the growth of real wages, inflated assets and misdirected capital. And that’s really caused inflation, which is one of the big problems of our time. Actually, we need higher interest rates. Do you agree with that causation?

RS: I worry about the impact of significantly higher interest rates that would be caused by a government borrowing tens of billions of pounds at a time when we already have an inflation problem, because I think unnecessarily making them even higher would be very damaging for millions of British families, people with mortgages, businesses that are using loans to grow their businesses. If you say, ‘I’m going to go and borrow lots of money and I’m going to do all these things that will mean higher interest rates’, that person might think that’s a good thing, but at least they should be honest about it. So then people can make up their minds as to whether they think that that combination actually is better for them.

CM: But interest rates are rising. And they do need to rise. You’re not attacking the fact they’re rising.

RS: Of course they’re rising. I support our central bank acting, as I’ve told them, to act forcefully to control inflation. That’s what I did as chancellor. There’s a question about doing things that make the bank’s job even harder. Beyond that, if inflation gets entrenched in the system then what you need to do to get it out again is very damaging.

CM: One of the criticisms of you is that you tend to express with great clarity and moderation what is basically the orthodoxy. The orthodoxy has gone wrong. And one of the big orthodoxies is all related to quantitative easing, the role of central banks, the role of interest rates. That’s not how to increase the general prosperity. It’s increased the prosperity of people with assets. The central bank mandate that Liz Truss was questioning is problematic because all it looks at is inflation. But interest rates affect the economy rather than just reflect it. Shouldn’t the mandate include watching asset prices?

RS: The orthodoxy was actually not that long ago that interest rates would remain low for a long time and no one had to worry about inflation. I was told by lots of people that borrowing was all right, that we don’t have to worry about that any more, because interest rates will be low for ever. That was not something I believed. I was one of the first people to say no, I think that is wrong. So I think this idea that somehow I’m the orthodoxy is not quite right.

CM: You said earlier that you told the bank to behave. Are you dissatisfied with what the bank did?

RS: My job is to give them the remit. Their job is to meet it. Now, they’re not alone in grappling with high inflation. The US, Europe, the UK – all of us have inflation running close to double digits. But there were some particular things in the UK that I said I was worried about some months ago. One of them was inflation expectations. It’s something that I mentioned in my conversations with the governor. That’s what government needs to guard against as well, because if government is going to do things that don’t give people the confidence that inflation will actually come down, it then becomes a self-fulfilling situation. Then we end up with this problem lasting years and causing families enormous misery.

CM: Of course, if you are to get public finances under control, you will have to cut, because you’ve spent more than anyone else ever. I’m sure you’ll argue, perhaps rightly, that’s no fault of your own. But that is the fact of the case. So what are you going to cut?

RS: I actually find it really sad that I seem to be pushing what is considered a minority opinion on this. I don’t know how we’ve got ourselves into a situation where Keir Starmer and the Labour party are now able to attack Conservative candidates as peddling the fantasy economics of unfunded promises. I believe that you have to pay for the things that you spend money on. That’s a simple, basic, moral tenet of conservativism. I care about what we leave our kids and our grandkids and I just don’t think it’s right to rack up bills on the country’s credit card. That now seems to be something that no one wants to face up to.

***

CM: When you invoke Mrs Thatcher, what’s the essence of the connection between Rishi Sunak and Margaret Thatcher?

RS: I’m not going to sit here and draw the comparisons, Charles, and you’re obviously the expert, so I certainly wouldn’t try to do it with you. I just know how I was raised. My parents didn’t talk politics at home. They didn’t have time for that. But there was always the sense that if you wanted to work really hard and build that better life for your children, that was something that Mrs Thatcher supported. It was that kind of middle-class aspiration that really struck a chord in my family. I remember when there were some privatisations and my dad was so excited. It wasn’t huge money but to have £100 worth of whatever privatised utility was a big thing in our house.

So those values I think are quite similar to mine in that sense. On policy, we all remember those unbelievable tax-cutting budgets that Nigel Lawson delivered. And gosh, that was inspiring to me – and his memo on tax reform that is in his autobiography. I go and reread and reread and reread it because it’s brilliant. I spoke to him about it when I had the privilege of meeting him. We have to also remember what Geoffrey Howe and she did at the beginning. She did things she didn’t love doing, but she knew they were the right things to do for the country. Then that set the conditions for them to deliver radicalism. I want to do the same.

CM: There’s a difficulty, isn’t there, because there were some things she could do which you can’t, because she’s already done them. She got rid of the Price Commission. She got rid of exchange controls. She did the trade union reforms. She did privatisation. People used to say, I remember taxi drivers saying: ‘Maggie Thatcher got me my house.’ What are they going to say about what Rishi Sunak did?

RS: I’d like people walking around Teesside to say, ‘Well, Rishi Sunak helped get me my job, because I’ve got a job down the freeport’, or: ‘I work in the vaccine manufacturing plant or this new offshore wind facility. And that happened because he created this freeport and that brought optimism and hope to us here.’

CM: One of the difficulties of this whole campaign is that there are ambitions like that which are very important. But there’s such enormous immediate problems, and one of them is energy prices. This really does bring into question net zero, doesn’t it?

RS: Of course net zero is important. But we shouldn’t run at that target so hard and so fast that we do enormous damage to people and the country along the way. Now, you’re right to highlight it, because it’s having a very real impact on people. People absolutely need support in the short term to help get them through it. But I think they’re also asking the question, well, what is your long-term solution here?

CM: Because of the intermittency problem we need more fossil fuels in the short to medium term.

RS: Absolutely. I was the first cabinet minister to make a very positive statement of support for the North Sea oil and gas industry.

CM: But don’t you agree with Liz Truss about suspending the green levies?

RS: You can’t magic away the payments. Government has contractual obligations on all of those things. So if someone is saying, well, we’re just going to not do them, what they’re saying is: we’re going to borrow more.

***

CM: I thought I’d better have another look at your resignation letter. Because of the excitement it’s been rather forgotten. I actually don’t understand why you resigned. It doesn’t really say. And Boris’s letter in reply also doesn’t mention any disagreement. So I’m slightly perplexed.

RS: OK, well, I’m not as good a writer as you, Charles, so I apologise. There were two reasons, really, which I thought came out in the letter. The first was about the conduct of government. Obviously, everyone will recall the most recent in a long line of incidents where trust was called into question, and that was over the Chris Pincher thing. I’ve always tried to give the Prime Minister the benefit of the doubt on these things when they have come up in the past. But it got to a point where enough was enough for me.

CM: Enough what?

RS: Enough was enough on questions of trust. And honesty about how we were dealing with things.

CM: So he was lying?

RS: Well, it’s unclear exactly what happened, but it was clear to me that what was said was not accurately reflective of what seemed to have happened.

CM: So he wasn’t telling the truth?

RS: At the end of the day, look, I resigned. So you can tell that I wasn’t comfortable with it and I didn’t want to defend it. There’s no point in pretending otherwise. I didn’t think how that situation played out was appropriate, and that’s why I resigned. But the other proximate reason was he and I were due to give a speech about the economy and the direction of travel. And we were clearly on very different pages. It comes back to being honest with the country about the challenges we face. I am prepared to say some things that have not made my life easy. I’m prepared to tell people that you can’t have your cake and eat it. That’s partly why I resigned because it doesn’t work if the prime minister and chancellor are not on the same page. 

CM: We’re now in an odd situation in which we’re asked to believe that you’re a decent, honourable person, but also you’re the one who stabbed the Prime Minister. So people have rather conflicted views about it.

RS: I can appreciate that. When I resigned, as I said in that letter, I resigned knowing it may well be the last job I ever had in government, and I’m comfortable with that. I resigned on principle.

CM: However, you had made provision that it wasn’t very likely you’d be straight out in the wilderness, because nothing was better organised than your machine to go for Tory leader at the moment you resigned.

RS: I can honestly say with hand on heart that that video was put together in 24 hours. And I get a lot of criticism when people say: ‘Oh, gosh, it’s all very slick and professional.’ I think being professional is a good thing. I think being professional at things is something that we should celebrate and actually we need more of it. If we want to compete in the 21st century, then yes, we do need people to be professional and ambitious and strive to be the best at what they do. I’m not going to apologise for that and I’m really lucky. I’ve got some people who are brilliant and that video was put together in a day. The first time I saw it was a minute before it went out. I was actually looking forward to a nice holiday.

***

CM: There is something you don’t talk about very much that increasingly worries people, particularly Conservative supporters, which is everything kind of coming under the slightly annoying word ‘woke’. So how do you approach that subject? So far I’d say that, without ever saying woke things, you’ve slightly sidestepped the subject.

RS: I deliberately strived as chancellor not to talk about things that were outside of my brief, because every time I did it, or even remotely did it, everyone would start saying: ‘Oh, gosh, well, what does that mean? And does it mean you’re interested in being leader one day?’ Now it’s painted as a criticism – ‘We didn’t hear enough from you on your views on, say, crime or migration’.

It was a choice on my part because I didn’t want to cause any trouble. But you’re hearing from me now. It’s not racist to talk about wanting to control our borders. I do talk passionately about the fact that this country did something amazing for my family, but my family, and millions like them, followed the rules and they came here legally. We need a system that allows for that. When people are exploiting that and breaking the rules, we should be robust in defending that system.

That’s one example. On the broader thing, look at my view on women’s issues. I have two young daughters and I think their rights are important. I mean, of course I know what a woman is. I’m married to one. I’m going to be very robust about defending women’s rights, whether it comes to language or changing rooms or sports or all those types of things.

CM: Do you think – as Kemi Badenoch said eloquently in this contest – that wokery is a threat to western civilisation?

RS: I thought what Kemi did brilliantly in the debates is she made the argument very forcefully and well that we shouldn’t just view the woke agenda as being narrowly confined to some of these cultural issues. Actually, as Conservatives who believe in a smaller state and a thriving civic society, we should view that same agenda as a threat to those things. I’m someone instinctively who’s not going to cross the road to start a culture war, but I’m someone who will robustly defend our values and institutions when they are under attack. I really want to make sure that what our kids are being exposed to in schools accords with our values.

CM: Part of that depends on how you understand British history. As someone of Indian heritage, what would you say about the historical role of Britain in India? How would you regard that?

RS: No country’s history is free of blemishes, but there’s an enormous amount of history to be proud of. In India, there were many things that were done that may well have ended up being beneficial, not least language. But of course there were episodes that were appalling. Winston Churchill said that when you talk about things like the Amritsar Massacre, no one can say that that was anything other than absolutely appalling. Of course, as a British Indian, I’m going to feel that type of stuff acutely. But I’m very proud of our history as a country, enormously proud of it.

CM: Are you not among the first generation of British politicians since the second world war who face the fact that the West’s dominance is really under threat? Do you think we face a crisis in the West, which our leaders are not really facing up to, primarily because of the massive threat of China?

RS: Yes, China is a significant threat to us. It’s a threat to our economic security and thereby our national security. There is a complacency about this. We actually need raw power. And that comes, first of all, from economic strength. Now, the question I see (and it goes back to the debate in this leadership election) is are we prepared to work at it or not? Are we prepared to do what all these other countries are doing, which is to have a time horizon that is far longer than ours? It’s an entirely conservative value, I think, to sacrifice in the short term, as my family did for a very different reason, to put in the hard work, to build a better future. If we want to meet these threats from countries like China, Russia and others, we need to get ourselves into that mindset as a country. These arguments I’m making in a micro sense on taxing and borrowing can actually be expanded to a much larger thing. Are we prepared to earn the success that we need in order to succeed in the world?

CM: Rishi Sunak, thank you very much.

RS: Thank you, Charles.