Is Rishi Sunak in for a low-key 2023?

So that was 2022. Yet another in a growing line of dramatic, turbulent years in politics, one which saw no fewer than four Chancellors and three Prime Ministers.

It was also an era defining year with the death of our longest serving monarch, adding to a general sense of uncertainty as to what the future might hold.

What does 2023 look like for the Prime Minister and what are the key issues that will shape our politics in the year ahead?

Since becoming Prime Minister, Rishi Sunak has been consciously low key. The thinking being that the public are desperate for some calm and competence. That has meant, though, that early concessions have had to be made to government backbenchers on issues like wind farms and housing targets.

Aside from demonstrating that the unity needed in the party to win an election is still elusive, it sets a precedent for the year ahead, signalling to Conservative MPs that they can, if they organise, secure concessions to protect them politically in their constituencies. More rebellions are likely during the year.

While relative calm has been restored, the polls haven’t shifted. From a slight uptick following Rishi Sunak becoming PM, the Conservatives are currently around where they were when Liz Truss left office and are still over 20 points behind Labour.

Many Conservatives are therefore entering the year resigned to not being able to win the next general election, which is expected in the summer or Autumn of next year. Those feelings are likely to be reinforced this May, when local elections are due to take place.

The issues that the Government needs to tackle to survive the next general election are numerous and difficult – if not impossible – to control, at least within the next 12-18 months. Inflation needs come down, but so far that has largely been driven by global factors. The widespread and growing industrial action caused by the spike in the cost of living needs to be addressed without big rises in public sector pay to avoid feeding or entrenching the inflation problem.

While the Government says it will support the most vulnerable, the scale of the rises in energy, food and other costs means millions on average incomes face growing financial difficulties as help becomes more targeted.

The Budget due in March is likely to fall short of their hopes and expectations. Economic growth needs to return during 2023, but people have less money to spend and their confidence in the future is at its lowest sustained level since 1974.

Some tangible ‘benefits of Brexit’ also need to be shown. Even the main reason for leaving the EU – control over our borders – has demonstrably failed to materialise.

NHS and ambulance waiting times also need to be dramatically improved, along with the ability to see a doctor or dentist. Although money has been made available, the staff to make the difference required may not be.

2023 is therefore set to be another tough year for many, including those in government trying to steer a course through the many challenges we face.

The Prime Minister will be hoping that the King’s coronation in May will be a moment of national joy and pride and around which a new sense of optimism and unity will grow.

In financial services 2023 is also set to be another significant year. The new regulatory framework under the Financial Services and Markets Bill, which is about to be scrutinised by the House of Lords, should be on the statute book around springtime.

Setting the post-Brexit regulatory architecture, the legislation will define how our financial regulation is governed for foreseeable future. Once in place, the process of moving most retained EU financial services legislation into the FCA rulebook will begin in earnest.

The thirty plus ‘Edinburgh Reforms’ announced by the Chancellor last month will also be driven forward, with the aim too of delivering more agile and less costly regulatory system. An important review of the Consumer Credit Act is also now underway.

So. lots as ever to be engaging or at least keeping tabs on. In the meantime, here’s to a peaceful, healthy, and happy new year.