(Bloomberg) -- Rishi Sunak is expected to keep Jeremy Hunt as Chancellor of the Exchequer as he seeks to calm markets and form a united government when he becomes UK prime minister on Tuesday.
The incoming premier will formally take over from Liz Truss following a meeting with King Charles III, before addressing the nation and appointing members of his cabinet. His challenge is finding a balance between rewarding loyalists who backed his two leadership campaigns this year, while ensuring party unity by including figures from across warring factions.
Sunak’s aides held talks Monday about appointments to his first cabinet after the Conservative Party leader promised lawmakers he would lead a “government of all the talents,” people familiar with the discussions said. He’s expected to proceed with Hunt’s plans for a fiscal statement, setting out the government’s spending plans on Oct. 31.
Sunak, 42, was catapulted into the UK’s top job after both Boris Johnson and Penny Mordaunt dropped out of the leadership race, triggered by Truss’s resignation. Just seven weeks after losing the last contest, Sunak vowed to make it his “utmost priority” to unite both the nation and his warring party in his first address to the nation. He becomes the country’s first Hindu leader, the third premier in two months and the youngest in more than 200 years.
President Joe Biden, in remarks marking the Hindu festival of Diwali on Monday, called Sunak’s elevation “pretty astounding. A groundbreaking milestone, and it matters, it matters.”
Despite the daunting in-tray he faces -- most notably the UK’s economic headwinds -- his first task is to forge a government that proves he’s serious about repairing internal relations. Members of Parliament from different Tory factions -- including those who supported Truss or Mordaunt -- said the party immediately felt more unified after Sunak received a warm reception at a meeting following his election.
They cautioned that he should avoid the temptation to completely overhaul the current government, appointing allies while leaving some Truss loyalists in place. Most government departments have seen as many as four different leaders come and go already this year.
Sunak’s Prize for Predicting Truss Chaos Is Chance to Fix Damage
Reappointing Hunt would mean a lesser role for two of Sunak’s long-standing backers, Mel Stride and Steve Barclay, who had both been linked to the job. Stride could be chief whip, or parliamentary enforcer, or possibly chief secretary to the treasury. Barclay could return as health secretary.
Mordaunt is keen to become foreign secretary, according to an ally. However, the incumbent James Cleverly will be determined to stay, though his case may be weakened because he endorsed Johnson’s extraordinary -- but aborted -- bid for a political comeback.
Braverman, Badenoch
There is a similar decision to make at the Home Office, where current Home Secretary Grant Shapps is lobbying to remain in the role, while allies of his predecessor Suella Braverman, who was fired by Truss and backed Sunak for leader, say she would like to make a return.
Defense Secretary Ben Wallace tweeted that he was giving his “full support” to Sunak. There was speculation he would resign if the new prime minister didn’t commit to the defense spending target of 3% of GDP by 2030. But a Wallace ally stressed he had never publicly said he’d resign, raising the prospect he could stay on even if the target is dropped. Like Cleverly, Wallace backed Johnson for the leadership.
New Premier Sunak Warns UK Faces ‘Profound Economic Challenge’
Supporters of former cabinet ministers Matt Hancock, Michael Gove, Robert Jenrick and Dominic Raab suggested they would be keen on a return to front-line politics. Former Chancellor of the Exchequer Sajid Javid would only accept a senior job, according to one of his allies.
There could be a more senior post for Sunak backer Kemi Badenoch, who was appointed trade secretary by the outgoing Truss but is said to be unhappy with the role. Sunak is also expected to give a major position to former Tory Chairman Oliver Dowden, a close political ally.
There could also be a promotion for Claire Coutinho, another Sunak backer who is seen as a rising Tory star. Two other key Sunak supporters, Gavin Williamson and Julian Smith, could also return to government.
--With assistance from Justin Sink.
©2022 Bloomberg L.P.
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