 Good afternoon everybody and you're very welcome to this IIEA webinar with Dennis Dalton, the London editor of the Irish Times. I'm Dahio Kallig and I'm the chair of the UK group in the Institute. I don't think I need to introduce Dennis, he's well known to all. He's been a very acute observer of politics in the UK since he arrived in London I think about six, seven years ago now and Dennis it's nice to see you, nice to welcome you and the floor is yours. Thank you Dahio and it's a great pleasure to join you at the Institute. Your work is incredibly valuable and it's certainly to me and I know to everybody else who's interested in these matters. I thought before we talk about the race itself it might be worth just going back a few minutes to how we got here and the the proximate trigger was the Chris Pinscher affair a couple of weeks ago and so one way of looking at it is that if Chris Pinscher had not got drunk in the Carlton Club two weeks ago then we wouldn't be where we are but what Chris the Chris Pinscher affair did was it was a kind of the last straw and it was you know in terms of Boris Johnson's character because of the fact that he had sent his various ministers out to give versions of the facts which turned out not to be true in terms of what he had known about Pinscher and Pinscher's behavior and so that kind of you know was part of a long succession of pieces of evidence about Johnson's character and the way in which his character and his relationship with the truth was becoming a problem for his relationship with his colleagues and for his standing in the country. But before the Pinscher affair just a week earlier the conservatives had lost two by-elections one to Labour in Yorkshire and other to the Liberal Democrats in in Devon and and they were the latest in a series of electoral mishaps and lost by-elections and just before that Boris Johnson had had a vote of confidence in a leadership where 148 of his own MPs had voted against him and so that was 41% of the MPs and so there was all of this kind of drumbeat going where Boris Johnson's position was becoming more and more unstable and so if the Pinscher affair hadn't triggered this now then it's likely that something would have happened a little bit later and particularly from the moment that he had fared so badly in the confidence vote it was clear that the writing was on the wall. But the other thing that had been going on throughout the previous years was that within Downing Street and within the government there was an ideological dispute going on and Rishi Sunak referred to this in his resignation letter where he spoke about the fact that the two of them were supposed to be making a joint economic speech or speech in the economy the following week and that differences had arisen which he found to be insurmountable and this goes back in a way to Boris Johnson's achievement in 2019 where he realigned British politics and he managed to get this ATC majority by appealing both to former Labour voters in the so-called Red War and traditional Conservative voters in the south and the southeast of England and he did this in the election by majoring on Brexit and on not being Jeremy Corbyn but then once he was in power he had to govern in a way that pleased both parts of this constituency and so he had to on the one hand appeal to these new voters who were generally on lower incomes than the average and other voters and were more dependent on well-funded public services but he also wants to appeal to the traditional Conservative voters who wanted low taxes and his answer to this was as he put it himself his policy on cake which was that he was in favour of having it and in favour of eating it and these tensions began to emerge but then they were suppressed to some extent by the coronavirus pandemic where there was so much money going out the door and nobody was really asking too many questions but people in the Treasury were getting increasingly uncomfortable about all this these demands on the Exchequer and the fact that it was becoming more and more difficult to say no to demands for more cash and so these tensions had already started to emerge between Sunak and Johnson and we're seeing something of this ideological and policy difference playing out now in the in the contest so if we go back to this contest and in the sort of later stages of the MPs section of the contest you had two candidates from the ideological writer Suella Braferman representing the hard line Brexiteers the so-called Spartans who had voted against Theresa May's deal and all of its votes and you had Kevin Badenock representing the right-wing element of the culture wars and and and majoring on that you were two clean break candidates in the person of Tom Thuggenhardt who had never held ministerial office and Penny Mordon who had only held a junior ministry and then you had two establishment candidates Rishi Sunak and Liz Truss they had been in senior positions in Boris Johnson's government throughout Rishi Sunak just left a couple of weeks ago Liz Truss remained and and Liz Truss then immediately presented herself as being in a way the Boris Johnson loyalty candidate if not exactly the continuity candidate and so she has been at pains to say that she had remained loyal and Boris Johnson's most most zealous loyalists in the person of Nadine Dorris and Jacob B. Small immediately came out and said that Liz Truss although she had been a remainder in the 2016 referendum was in fact more of a Brexiteer than they ever were and they fully backed her and she then was the beneficiary of this of Johnson's kind of betrayal narrative which was ventilated particularly in the Daily Mail which was suggesting that Sunak was the assassin who had been plotting for some time to topple Johnson and that she then was his his his only inheritor and so and she was there their standard bearer. Sunak wasn't really able to present himself as a complete clean break in the sense that he first of all had been so closely associated with Johnson and his policies he had put up with an awful lot of Johnson's behavior for a number of years and also like Johnson he was he received a fine for breaking coronavirus rules it was a fairly harmless breach in that Sunak had showed up early for a meeting and then suddenly Boris's birthday cake arrived but nonetheless he couldn't really get in this high horse about this given that he and Johnson had actually received the same fine for the same event and of course Liz Truss was also unable to really dissociate herself on moral grounds from Johnson partly because she didn't want to but also just you know she was so complicit and so what you found is that already even at this stage the contest has become one not so much about character but actually mostly about ideology and it's particularly about this question of policy and what you do about about the economy and in this Rishi Sunak is presenting himself as a Thatcherite to Liz Truss's Reaganite and so invoking Nigel Lawson and the early period of Margaret Thatcher's period in office Rishi Sunak is saying that he also wants to cut taxes but that inflation is the big enemy and that it's important that you get inflation under control that the conservatives remain fiscally responsible and that they don't start cutting taxes until such time as it's responsible to do so what Liz Truss is saying is that actually this is stifling growth and that's the way to go about this is that actually you borrow to cut taxes and the tax cuts will stimulate the economy generate growth that in turn will generate revenues she's also suggested that the coronavirus debt about 311 billion pounds should be treated like war debt and so you would put it on say a 50 year term which would imply that you would refinance it and so she's her policies have alarmed a lot of mainstream economists and she's also alarmed people by questioning the mandate of the Bank of England she hasn't suggested that the Bank of England should no longer be independent but she has said that maybe it's time to look at their mandate again and she cited the example of the Bank of Japan as being something they could look at and so this is essentially where the battle is being fought the other part of it then is to some extent about personality and about background and Liz Truss is making a lot of the facts that she went to a comprehensive school that she comes from a kind of ordinary background and and it is there's no question but that if you talk to conservative MPs and members of the party they will report that a lot of conservative members while they don't disapprove of Rishi Sunak's wealth they feel as if it makes his life remote from theirs and that and because his wealth is on such a scale he and his wife are worth something like 750 million pounds according to the Sunday Times Rich List and and then there have been these questions about his life's tax days as they appear to be more or less sorted out now but nonetheless you know all of this and once again the Daily Mail which has been very much campaigning on behalf of Liz Truss has stories every day with a photograph of some shoe that Rishi Sunak is wearing and the fact that it costs 495 pounds and his suit apparently today we hear it costs three and a half thousand and all of this is you know is kind of part of the case against Rishi Sunak the case in favor of Sunak is that he would make himself is that he would win an election and the polling suggests that he would be better placed to defeat Labour than Liz Truss would and he will also over the next couple of weeks start to I think you know step up a lot of these attacks on the fact that Liz Truss was originally a member of the Liberal Democrats and that she also was a very articulate advocate of remaining in the European Union in the 2016 referendum. Rishi Sunak is a conviction Brexit here he as a fairly new MP it is true that he was taking the risky option by defying David Cameron and George Osborne by going for the for the Brexit side he believes that there is an economic case for Brexit and that the way in which you can make Brexit work is that is through divergence in particular areas and the areas that he has identified particularly are in data so that you so that Britain could move ahead in AI through a more liberal data regime than GDPR and then also in the area of life sciences that it would be easier to to introduce patterns and and then also in in the clinical trials and then particularly in the area of financial services and so he's got a big push on in terms of financial services regulation and essentially to have a kind of a second big bang in the city of London through deregulation and so what he's talking about is really focusing on a number of areas high value areas of the economy where deregulation can make a difference and where Britain can actually scale up to the and use its strengths it's already strong some of these areas to actually have a proper competitive rivalry with the European Union but then that would imply being a bit more relaxed about other regulations and so you you know you only diverge when it makes sense and if it makes sense to remain aligned to your rules and some things then you would do so and so he's so so where he's concerned he does he is absolutely convinced about Brexit he's not I think kind of you know he also believes in the sovereignty argument but he's not looking for trouble in a sense he's not looking for a scrap and and in the internal discussions within the government on the approaches to dealing with the European Union particularly over the Northern Ireland protocol he along with Michael Gove was among those who was inclined to word caution rather than confrontation on the basis that confrontation could have an economic cost but it's worth noting when we start to talk about how this would affect Britain's relations with Ireland and the European Union that all of the candidates in the leadership election including people on the liberal wing of the party like Tom Thuganhard backed the Northern Ireland protocol bill all of them are in favour of it and I think if you look at some of the sounds that are coming out of Dublin and out of some of the European capitals which are kind of suggesting that we'd all much prefer Rishi Sunak than Liz Truss well first of all that's obviously extremely helpful to Liz Truss's campaign to make these noises but also I think there's a danger of setting expectations too high because I think that there's no question but that Liz Truss will find it more difficult to retreat from her position on the Northern Ireland protocol partly because she's the author of it but also because the people who brought her to the dance were the Eurosceptics of the European research group and so she's more beholden to them than Rishi Sunak would be but it's also true that if the Europeans think that Rishi Sunak is going to come into office and is going to somehow pause or withdraw the Northern Ireland protocol bill then I think that's an illusion and I think it's probably useful to think about the function of this legislation in diplomatic terms and so it's just past its stages in the commons and it's going to the House of Lords. The Lords are already back for a very short period in September and then it'll meander quite slowly through the Lords in the autumn and the winter but it would be quite ambitious even to expect it to be passed by the end of this year so it's probably going to go into next year. There's a good sign that there'll be some turbulence in the Lords because there are a lot of people over there who A know an awful lot about this sort of thing and B are quite old-fashioned about the rule of law and treaty breaking and so while all of this is going on the function of the legislation is mainly to influence the negotiations and the idea like all of these previous actions is to somehow attract the attention of the Europeans. It's usually what Britain is trying to do is to attract the attention of the member states that usually backfires on them but nonetheless is to try to attract their attention and say will you please loosen Maras Sefekovic's mandate so that we can have a more we can have a little bit more some kind of a renegotiation of the treaty. I would say that where Sunik is concerned he might not be quite so hung up on whether the treaty is actually rewritten or not but nonetheless I think that that you know he will need to have some kind of victory he can't simply fold his tent I think and retreat and so if say one of these people so in a sense you know I suppose what I'm saying is that they're both going to face the same set of circumstances if they come in which is that both of them will want probably to reset the relationship with the European Union the European Union which didn't really feel like offering much by way of concessions to Boris Johnson because he was too weak to do anything with it might be more interested in having a more serious conversation with the new leader but either way it's hard to see how with the Conservative Party as it is that without some kind of movement at least you know and something that looks quite dramatic in terms of its impact on the ground how you can actually really make progress it really brings me to the last thing I was going to say about all of this which is that whoever wins this this leadership contest is going to have an awful lot of trouble with the Conservative Parliamentary Party which Sunik got more votes than anybody else in the leadership contest for the MPs yesterday but he got 137 votes that's 38 percent of the votes in 2019 at the same stage Boris Johnson got 50 or 51 and Theresa May in 2016 got more than 60 but Theresa May wasn't able to manage the Conservative Party David Cameron wasn't able to manage his party and it was because of that difficulty in party management that we had the the referendum Boris Johnson purged many of his critics within the Parliamentary Party and went on to win an 80 seat majority and he wasn't able to manage the Conservative Party whether it's Liz Tross or Rishi Sunak most of their MPs will not have voted for them and that is going to be a real difficulty when it comes to them trying to do anything and it's going to be a particular difficulty when it comes to trying to make progress on the protocol I think I'll leave it at that and see what what you all want to talk about