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Rishi Sunak to become Britain's next Prime Minister; Declared New Leader of UK Conservative Party which will make him the new PM; Rishi Sunak to become Britain's next Prime Minister; China's Leader Stacks Top Ruling Body with Allies; Incoming British PM Sunak: "Utmost Priority" will be Unity. Aired 11a-12p ET

Aired October 24, 2022 - 11:00   ET



MAX FOSTER, CNN HOST, CONNECT THE WORLD: Hello, I'm Max Foster, welcome to a special edition of "Connect the World"; we're at Avant Garde Green in

London outside the Houses of Parliament. The last few hours, a new prime minister has been decided upon. I will give you the very latest.

JULIA CHATTERLEY, CNN CORRESPONDENT: And I am Julia Chatterley in New York bringing you the latest from Russia's war in Ukraine, protests in Iran and

a rap of China's Communist Party Congress.

FOSTER: Well, after another head spinning day really here in London, we're waiting to hear from the man who will become Britain's third Prime Minister

in three months less than three months. Extraordinary, isn't it? He got quite a welcome heading into Conservative Party quarters just moments ago,

after the Tories picked him as their leader.

We'll now be watching whether Sunak can unite the party and the drama where the British public as well as it's his job really to turn around the

British economy. He is looking at how the pounds reacting. Let's see it. I'm sure he'll come up at some point. It's down slightly.

But there are many factors playing into that not a dramatic move, I guess this case of wait and see all those financial analysts really waiting to

hear that statement from him as much as we are. My next guest tweeted this unfortunately, some people will insist this good news is proof of a global

coup, referring to Boris Johnson's exit from the race and the calm tone on the UK financial markets as Investors bet that Rishi Sunak will stick to

his economic policies that have helped the markets in recent days.

Joining me here outside the UK Parliament is Tim Montgomery Co-Founder of the Center for Social Justice and creator of the conservative home website,

which is where so many conversations have been had in recent days.

First of all, what you understand happened in the last 12 hours or last 24 hours when Boris Johnson literally pulled out then Penny Mordaunt pulled

out leaving Rishi Sunak to be crowned really, Prime Minister?

TIM MONTGOMERY, CREATOR, CONSERVATICEHOME.COM: Well, I'm going to say something extraordinary to you Max, but I'm not sure we necessarily heard

the full truth from Boris Johnson when he said he had the numbers and he thought he could win. We don't fly back from the Caribbean from the


And just on the chance that you might consider running. He definitely wanted to run. You don't think you've got 100 MPs at the back end, he may

have just about got there and suspicious to --.


MONTGOMERY: Yes, but I think he knew. And I think this explains why Penny Mordaunt dropped out of the race as well.


MONTGOMERY: I think they both knew that if they had taken it to a proper contest, they would have been humiliated in the parliamentary vote, even if

they might have done to make it competitive with members in the country, a phase that won't now happen.


MONTGOMERY: But I think you can't really purport to be a prime minister or leader of party, if the majority of your MPs don't want you. And I think

both of them realize that.

FOSTER: Yes. And the other interesting tests was when those Boris Johnson supporters, many of the key ones didn't move over to Mordaunt side and

support her, but went straight to Rishi Sunak. What was happening there, do you think?

MONTGOMERY: Well, look, I can't speak now say for CNN viewers, but I think most people in Britain are exhausted and perhaps sometimes exhilarated, but

largely exhausted by what the country has been through in recent weeks.

And I think the thought of crossing the finishing line today, rather than extending the contest, and where I think of course, ideological and other

reasons why Conservative MPs took the decisions that they did. But I just think they wanted it over this whole, so proper, that British politics has

been recently to stop. And I think that motivated a lot of their decisions.

FOSTER: Do you think they've taken a gamble on Rishi Sunak?



MONTGOMERY: Well, I didn't want him to be Prime Minister. I've got reservations about him in a number of fronts.

FOSTER: Have you advised Boris Johnson in the past?

MONTGOMERY: I've advised Boris Johnson pass. But there are reasons just he did predict the problems that Penny Mordaunt experienced in the markets.

But he also was the chancellor.

FOSTER: Liz Truss?

MONTGOMERY: Yes, Liz Truss, yes. But he's also the chancellor that took Britain to the point of vulnerability that made the market so nervous about

Britain. Let's not assume he's going to be sort of a quick or easy fix as the new prime minister for Britain. But I now do wish him well.

And I think that should be the attitude of the whole Conservative Party. I fear it won't be there's a lot of poison within conservative ranks. We've

been in power now for 12 years in Britain, 12 eventful years.

And I think there's quite a bit of poison in the bloodstream, therefore that won't easily be drained. But even someone who's been a critic of -

that I just now want Britain to enjoy the quiet, competent government that any good, the country govern well deserves.

FOSTER: We don't seem to know much about him beyond economy do we, where does he stand on Ukraine defense? Where does he stand on foreign policy?


MONTGOMERY: Well, he took quite hawkish positions on Ukraine in the leadership election that we had during the summer. He's always said he

supported the government's position on Ukraine. And I think that's right. But one of my worries about him is that he is quite a treasury man.


MONTGOMERY: A numbers man if you like.

FOSTER: Yes, a details man.

Well, a details man and some people do worry about the cost of Ukraine's war. I don't think Boris Johnson or Liz Truss did really they thought the

absolute first priority was to give Ukraine what it needed in his fight with Putin.

And there are some people who are nervous that will Sunak be quite the same person. And what I'm looking for the next big step, we all need to look at

is the kind of cabinet that he builds. Liz Truss's big mistake was only really put her supporters in place.


MONTGOMERY: I'm hoping that he will put the it's been a long time, it's true - Boris Johnson as well, it's true to Liz Truss. We haven't had our

best people, our biggest beasts in the front line jobs. If he really does form a cabinet of all the talents, then I think that will give me other

conservatives markets, people of Britain the reassurance that I think we all hope on.

FOSTER: So, Jeremy Hunt will remain at the Treasury I believe.

MONTGOMERY: I hope so.

FOSTER: And Ben Wallace at defense?

MONTGOMERY: Well, that's perhaps the biggest question in the formation of the new cabinet. There's been a debate within British politics about

whether defense expenditure should move from about 2 percent of GDP to 3 percent. That's something that Liz Truss promised, that's something Jeremy

Hunt promises, I think Boris Johnson promise.

And I think Ben Wallace; the Defense Secretary regards himself as the guardian of that policy. Now, I think Rishi Sunak inherits very difficult

public finances. And I'm not sure he will give the level of commitment that Ben Wallace wants, if Ben Wallace walks that will be worrying for lots of

us who want to hawkish position on Ukraine.

FOSTER: OK. And just on foreign on the foreign office, a lot of people talking about Penny Mordaunt as a way of folding her in. She seems

qualified for that position, presumably.

MONTGOMERY: Yes, I think she's definitely deserves a considerable role in the Conservative Party. I personally would like to see perhaps someone like

Tom Tugendhat, he's the current Security Minister, he is the Chair of the Foreign Affairs Select Committee, former Military man, I think he's

probably better suited to that role.

I don't think Rishi Sunak did do deals with Penny Mordaunt or anyone else. I hope not. But she wouldn't be my first choice for one of those top three

of her choice. FOSTER: And the other big job, of course, home office.

MONTGOMERY: Yes. And that's another big issue for Rishi Sunak in terms of his governance of the Conservative Party. The majority of the Conservative

Party wants a much stricter policy on immigration, for example, which comes under the Home Office remit.

But Rishi Sunak and perhaps the Treasury see advantages for economic growth, allowing more immigrants into the economy; it will make some of

their budgetary decisions potentially easier.


MONTGOMERY: But in potentially going down that route of relaxing immigration controls, there'll be taking a different stance from what most

Tory members want. And certainly what the Tory tabloids want as well.

FOSTER: We're hoping to hear from him any moment now really. Let's talk about his style, because he's been accused of being aloof and out of touch.

He's obviously wealthy, but he's also had this elite education as well, hasn't he? How are people? How easy is he going to be to relate to in the

way you know that, you know, that's obviously Boris Johnson's great ability, wasn't it? He also came from this very privileged background; we

had this great personal touch.

MONTGOMERY: Yes. Well, Boris Johnson, you almost answered your own question in your way.

FOSTER: But Rishi Sunak is he able to make that connection?

MONTGOMERY: Well, that's that is a good question. And I think, I think the British people largely are fair minded. I don't think they judge people

necessarily from their background, if they portray and evidence and understanding of people's real problems.


MONTGOMERY: On the face of it, it could be difficult one of the - some people say Rishi Sunak is the richest person to ever be in the parliament

behind us. And of course -

FOSTER: --because he is speaking now, we'll get your idea that--

RISHI SUNAK, INCOMING BRITISH PRIME MINISTER: I'd like to pay tribute to Liz Truss for her dedicated public service to the country. She has led with

dignity and grace for a time of great change, and under exceptionally difficult circumstances, both at home and abroad.

I am humbled and honored to have the support of my parliamentary colleagues and to be elected as leader of the Conservative and Unionist Party. It is

the greatest privilege of my life, to be able to serve the party I love and give back to the country.

I owe so much to. The United Kingdom is a great country. But there is no doubt we face a profound economic challenge. We now need stability and

unity and I will make it my utmost priority to bring our party and our country together.


SUNAK: Because that is the only way we will overcome the challenges we face and build a better, more prosperous future for our children and our

grandchildren. I pledge that I will serve you with integrity and humility. And I will work day-in day-out to deliver for the British people.

FOSTER: OK, that was Rishi Sunak, the incoming Prime Minister, looks quite stilted.

MONTGOMERY: A little bit stilted, I think.

FOSTER: But as you think about the content.

MONTGOMERY: I think it overall struck the right note, I think there was a note of grace to his predecessor.

FOSTER: To Liz Truss.

MONTGOMERY: Not many people have said very nice things about Liz Truss for a little while. I think his big challenge is I think he's got the goodwill

of people. But the Conservative Party is quite a divided party.


MONTGOMERY: There are lots of people who don't want him as prime minister. I think being generous to his opponents be generous to his critics, as he

did there with Liz Truss is incredibly important.

FOSTER: Many to mention Boris there, presumably.

MONTGOMERY: Well, he mentioned Boris on Twitter last night.


MONTGOMERY: So perhaps that was a tick a box ticked.

FOSTER: Humbled and honored. He talks about the profound economic challenge. So you know, setting out his source straightaway. That's the


MONTGOMERY: Absolutely. The challenge, I think, as well as the economy, there will be for him to reassure that Tory right, who are most suspicious

of them on issues like immigration on migrants crossing the channel, which is a big issue in British politics.

And also, for example, the environmental protesters in Britain at the moment that keep stopping motorways and other --.


MONTGOMERY: He also needs to be the law and order candidate. Those I think will be his two priorities in office.

FOSTER: But that's the issues that we just don't know where he stands on it. He's talked a bit about immigration; he's got quite a tough line on

immigration as well.

MONTGOMERY: Well, he took very tough positions during the Tory leadership election in the summer.


MONTGOMERY: Some of us didn't know whether he was taking those positions in order to win with members.


MONTGOMERY: Well, that's what he genuinely believed, while we now the tea bag of this expression has been you know the strength of a tea bag until

it's in hot water. And he's now in the hot water, the challenges Britain faces and will begin to find out who the real Rishi Sunak is.

FOSTER: Around the world, the headlines, you know, take different contexts, a lot of people making a point about him being the first prime minister of

color in this country. Is that important do you think for this nation as well or just the outside looking him?

MONTGOMERY: Max. I think the most important thing about it is it almost isn't important.


MONTGOMERY: You know, there is no I've not heard - I had one or two people on the radio yesterday, sort of slightly--

FOSTER: Hasn't been a big talking point.

MONTGOMERY: It's natural.


MONTGOMERY: And that's it's almost become natural that we originally had our third female prime minister. And it wasn't the fact that people of

color, women are becoming grown to the top of British politics in other words, the fact that it's becoming commonplace, almost unremarkable.

We have the most ethnically diverse cabinet over the last few years. The fact that that we're no longer judging people by the color of their skin or

their gender, but by the content of their character as Martin Luther King finish and by their ability, that's the thing I think we should most


FOSTER: He hasn't often talked about it, but there was an interview, he did talk about it. And he was talking about he was brought up in Southampton

wasn't he? And he talked about going to the temple every weekend, but he also go and watch the football every weekend. And that's how he

contextualizes his growing up.

MONTGOMERY: Yes, well, football is one of the great United's in. We call it football, not soccer unlike the American; it is one of the great United's.

And when he was chancellor, he famously lit candles outside number 11 Downing Street, the residence of the janitors to mark Diwali. And it'd be

lovely seeing the British Prime Minister potentially do that in the next day or two.

FOSTER: OK, Tim Montgomery, really thank you for joining us on this really historic day. In British politics we got a few this years, but it's

certainly one of them. The Whirlwind contest in the UK was staged after Liz Truss announced last week that she was quitting the top job becoming the

shortest serving Prime Minister in British history. CNN is looking at what led to her downfall as well. For more insight do you go to our website or find it on your CNN app. We'll be back in a moment.



FOSTER: The man about to become Britain's new prime minister is pledging to prioritize stability and unity. Rishi Sunak making a brief public statement

just a few minutes ago, it was all hugs and smiles just before as the former finance minister went into Conservative Party headquarters, but amid

the backdrop of division, not to mention an economy on the precipice of a recession.

We'll see how long the good cheer lasts, frankly. Bianca shows us now how Rishi Sunak made his way all the way to number 10?


BIANCA NOBILO, CNN CORRESPONDENT (voice over): After making the runoff in the second leadership contest in as many months its second time lucky for

Britain's new Prime Minister, Rishi Sunak but that is where his luck runs out.

Sunak inherits an economic nightmare stoked by soaring inflation war in Europe, a party at its lowest level of popularity in a generation eating

itself alive, changing prime ministers at a pace never seen.

The last Liz Truss became Britain's shortest serving leader ever at a mere six weeks. But the former chancellor has not sugar coated the challenges

Britain faces assuring that he has the economic credentials to steer the nation through the crisis. SUNAK: We have to be honest, but borrowing your

way out of inflation isn't a plan. It's a fairy tale.

NOBILO (voice over): The predictions he made about the impact of Truss's tax cutting economic plans were vindicated. On to parents of Indian descent

Sunak is Britain's first person of color to become prime minister. But his path to power is a tale as old as time, educated at one of Britain's most

exclusive schools, Winchester College on to Oxford University like over half of the country's Prime Minister then into the finance industry.

After being praised for slick performances during the pandemic he was tipped to become the next leader. Then his political fortunes took a

nosedive. Sunak's resignation as chancellor in the last days of the Boris Johnson government was seen as being instrumental in Johnson's downfall.

Then Sunak lost the leadership contest to replace Johnson after his popularity had taken a battering, with many Johnson supporters blaming him

for Johnson's end. The London police had fined him for attending an illegal gathering and lockdown and his wife Akshata Murthy, the daughter of the

Indian billionaire founder of Infosys, came under fire for her non-domicile status, sparing her a huge tax bill on her massive foreign income. Sunak

ranks among the UK's richest and has been labeled out of touch with ordinary voters.

SUNAK: For friends who are in a working class but not working class, but I mix and match and then I go to see kids from an inner city state school and

tell them you know to apply to Oxford in--

NOBILO (voice over): This 2001 BBC documentary clip when he was still at university later went viral and it didn't help. He since walk back that

comment, but this didn't help either. Now Sunak leads Britain at a time when millions fear they won't be able to afford their food and heating this



KEVIN HOLLINRAKE, BRITISH CONSERVATIVE MP: I think Rishi does have the characteristics that could restore faith in our party. Yes. I mean, I think

he's demonstrated that you could judge people on their actions, not their words.

NOBILO (voice over): The moment calls for a shrewd political operator, a powerful communicator, a unifier. Sunak will be tested and judged



FOSTER: Bianca joins me now from Downing Street. We had the first sense really in the statement that he just issued other than he managed to catch

it. It was a very short, wasn't it? It basically talked about the economy paid tribute, actually to Liz Truss, which was seen as a positive by the

analyst. I sit next to at the time, what did you make of it?

NOBILO: It was short and sweet. Clearly, he wants to keep the nation and keep the media informed of what's going on. Because of course, you and I

both know that he'll be giving a speech behind a podium here at Downing Street at some point.

So that was more of a holding statement, if you like. And he did all the right things. He played it by the book, he paid tribute to Liz Truss, he's

still currently Prime Minister said that he was humbled and honored to have won the leadership contest that being Prime Minister will be the greatest

achievement of his life, the greatest honor and privilege of his life and that he wanted to create a government of all talents.

And that part's key, because I know that you've been discussing with your guests as well, the challenge ahead for Sunak will be uniting the party

governing in a way that restores confidence. And there's been a lot of chatter about needing to bring in a broad church of opinion, the most

talented assets that the Conservative Party has to show for itself from all the different wins.

And that is the most sensible way to govern as well because it reduces the ability for those people to create trouble on the back benches to, Max.

FOSTER: We haven't heard much, if anything, really from him on this latest election campaigns. We're basing everything really on we learned about him

in the summer when he was up against Liz Truss, perhaps saying a lot of things that we convinced Conservative Party members that he was the right

person for the job against Liz Truss.

He's actually got quite a, you know, open book now hasn't he? He bit of a free rein on what he can do, because he hasn't been, he hasn't tied himself

in any particular knots or got himself in any corners.

NOBILO: There's definitely an advantage to not having made promises in this most recent leadership contest. However, as a prime minister, he doesn't

enter Downing Street from the position of strength of a prime minister that's just won a big majority in election.

After all, he hasn't done that. So he will be buffeted by the various different policy priorities and agendas of people within his own party. At

the moment, the party looks like he is willing to try holding together because they know that they would face electoral oblivion if they didn't,

and they have to try and restore some of the public trust in them.

But Sunak is still in a very difficult position. And in fact, the Labor Party who had been pushing for a general election to take place now, the

Deputy Leader Angela Rayner said that Rishi Sunak has been crowned this time saying barely anything about how he would lead the country going

forward, or about the economic crisis that it faces and what he would do.

And indeed, the economy has deteriorated significantly from when Sunak was last running against Liz Truss. And we heard a lot more about his economic

beliefs. And even though people describe him and do it in a relative sense, yes, that's true as a safe pair of hands, and a clever political operator.

Actually, he's still relatively untested in the great historical arc of Prime Minister's because when he was Chancellor during the pandemic, he

didn't have a blank check, but it was unprecedented circumstances. And he was allowed to do quite a lot of public spending, because this was a once

in a generation once in a lifetime issue that the country was facing, also people hope.

So we haven't really seen how he's going to navigate the new political terrain. And also, let's not forget that he was Boris Johnson's Chancellor.

So a lot of the media attention and scrutiny and focus naturally were absorbed and encouraged by Boris Johnson.

And he was somewhat sidelined in that respect. So we will learn a lot more about Rishi Sunak because there's still plenty of an obscure area when it

comes to policy and how he's going to approach this Max.

FOSTER: Yes, we haven't seen him on the international stage at all that way, you know, up against Joe Biden or Emmanuel Macron. That's going to be

an interesting process, isn't it seeing all those calls come in congratulating him and seeing him develop those international


NOBILO: Without question and actually one of the issues in his in-tray is going to be pressure from within his own party to rewrite parts of that

Northern Ireland protocol, i.e. try and backtrack on some elements of the previously agreed Brexit deal.

And we know that Joe Biden does not like the sound of that. And there will be pressure because we heard that earlier today from those influential

members of the so called European research group within the Conservative Party.


NOBILO: We know where Rishi Sunak stands on Ukraine, broadly speaking, he actually wrote a letter for the Kyiv post, I believe on their Independence

Day on Ukraine's Independence Day, so back in August on the 24th, and he reaffirmed his commitment to supporting Ukraine in the style that Boris

Johnson was doing.

He said that Ukraine will be a firm friend and a long term friend of Britain that he wanted to increase the cultural and economic links continue

to support the fighters continue to provide aid. And he sent love from his family to the families in Ukraine.

So it was quite a powerful and empathetic statement to the Ukrainians, which was well received there. So we can expect that kind of commitment to

continue in terms of how he operates with other leaders, I think you'll be more playing with a straight bat.

Then Liz Truss, for example, and understanding the importance of alliances like - Francis Emmanuel Macron, when Liz Truss famously said some fairly

controversial things, and other leaders on the world stage Sunak is more predictable.

He's a slicker operator. He's more planned, some would even say robotic about what he says. So we can't exactly expect that, that bombast, that

controversy and potentially volatile rhetoric that we may have got from a Boris Johnson or a Liz Truss.

FOSTER: OK, Bianca, thank you very much indeed. Wait to hear when Rishi Sunak will be heading to the palace to be appointed prime minister, but we

know he will be Britain's next prime minister back in a moment.


FOSTER: Financial markets here in the UK globally have certainty with the announcement to the incoming British Prime Minister. However, Rishi Sunak

still faces a very daunting task that's trying to revive the UK economy. Sunak will take office amid a worsening economic downturn in the UK new

data showing private sector output dropped for a third straight month.

And business optimism is now at its lowest level since April 2020 early in the pandemic, Anna Stewart here for a closer looks. We're really looking at

bond yields, aren't we today, because that was the big measure of Liz Truss's failed economic experiment.

ANNA STEWART, CNN REPORTER: Yes, Truss-anomic. I think bond yields were really where we saw that all sort of fray and where we saw the Bank of

England having to intervene and bond markets as where we look this morning. Finally enough, actually as Boris Johnson, I think stepped out of the race

last night, that's when we saw markets begin to stabilize.

10 year bond yield now under 4 percent, the pounds been pretty flat all day I think there was a huge expectation ever since last night that Rishi Sunak

had won this.


STEWART: It was interesting listening to his speech just now one of the shortest speeches, I think I've ever heard only a few sentences, really,

but one of them was, there is no doubt we face a profound economic challenge.

Now Rishi Sunak, of course, being a chancellor up until July of this year, so still fairly recently, is someone who knows what to do in terms of the

economy, one would hope it was a huge part of his leadership contest in the first race for party leader over the summer, we didn't hear anything really

from him at all in the last one.

But I think the expectation from the markets is this will be a much more stable government with much more support from both within the party and

hopefully in Parliament as well. And that he will essentially start off with delivering what we've already begun really under Jeremy Hunt as

Chancellor, which is the unwinding of the Truss-anomic plan, so reversing essentially the many tax cuts that had been suggested, Max.

FOSTER: In terms of how that moves forward, by keeping Jeremy Hunt, does that give tacit approval to the budget that Jeremy Hunt has put together

and suggest that Rishi Sunak is going to give him independence there as he moves into number 10? STEWART: Well, of course, we still need to wait to

absolutely confirm who is going to be in Rishi Sunak's cabinet and I suspect we'll get hopefully across party of the Conservative Party aboard

spectrum to avoid the problems that we have seen in past governments where you have a troublesome backbenchers, you know, causing problems that

they're not included.

If Jeremy Hunt is included, and if he is Chancellor and that is the general expectation. Right now all we really know in terms of that economic plan is

to just reverse what Liz trusted. Well, Sunak said in the first leadership contest was essentially that, while he would like to lower taxes, he wasn't

planning to do anything of that measure into inflation was under control.

Now, inflation is absolutely not under control, it's got a lot worse since he was chancellor, that's Rishi Sunak now at double digits, and we've had

more data out today suggesting the UK is heading for a deep recession. So the challenges here are huge.

And I think first of all, we'll get the fiscal statement on Halloween, October 31 assuming Rishi Sunak keeps with that plan, with perhaps Jeremy

Hunt as Chancellor. After that point, it will be interesting to see once the sort of emergency situation is over what the economic policies will be

going forwards, but I don't expect was here huge amount of that in the initial few days.

FOSTER: Brexit obviously looms, as it always does in British politics. That one sensitive area, there will be you know, the relationship with Northern

Ireland's relationship with the European Union.

We know where he stands on that, because that's going to be a huge bone of contention, not just with Ireland or not many people with in Northern

Ireland, but also with Washington.

STEWART: There's the U.S. relation, there's also where he stands in terms of Ukraine and Russia and how much support he sees UK giving Ukraine in the

coming years, there's the EU, there's Brexit, there's Northern Ireland, there's a lot on Rishi Sunak's to do list.

And we can look back to that first leadership contest, but it was many months ago. So of course, a lot of these issues have changed. And we didn't

get a huge amount of detail on all of those points. And given that the British public has had no say, in the appointment of Rishi Sunak, as the

Prime Minister of the UK, really, there isn't a mandate there in terms of the British public.

It will be very interesting to see what he has to say on all this without a manifesto, it is hard to know. And in some senses, Max, perhaps we're only

going to find out what his stance is as he goes along in terms of policy.

FOSTER: OK, Anna, thank you very much indeed. Let's just go to that speech that Anna was referring to. Rishi Sunak giving his first public statement

is very brief, arguably a holding statement or the bigger one that he'll deliver in Downing Street when he enters for the first time as PM.


SUNAK: We now need stability and unity. And I will make it my utmost priority to bring our party and our country together. Because that is the

only way we will overcome the challenges we face and build a better, more prosperous future for our children and our grandchildren.


FOSTER: My next guest wants to know what Rishi Sunak intends to do to revive Britain's economy in particular. Matthew Lesh, Head of Public Policy

for the Institute of Economic Affairs. He did mention the economic challenges in that statement. It's the one sort of policy area he did

discuss apart from unifying the country so he knows we know that that's his priority.

MATTHEW LESH, HEAD OF PUBLIC POLICY, INSTITUTE OF ECONOMIC AFFAIRS: Indeed, clearly the first and foremost priority of Rishi Sunak is to try to

stabilize the fiscal situation now that means, most likely I would expect continuing with plans to cancel Liz Truss's tax cuts as well as was going

to see increases in corporate tax in the UK to try and fill some of the fiscal hole.


LESH: On top of that, I think there's going to be some level of spending restraint to try to put a bit of a more positive longer term vision. And

what we've seen in just as Rishi Sunak, a sense to the Prime Ministership is a decrease in the cost of UK government borrowing.

But the gilts yields have gone down from 4 percent and off to a few minutes ago to 3.75 percent. And that will make the political position next Monday

as currently scheduled a little bit better because that the forward estimate that - down.

FOSTER: So is it back to when Liz Truss issue her disastrous budget?

LESH: More or less in terms of guilt, although they notably been increasing before that. So we've seen over the last 18 months, the gilt yields go up

for about 1 percent cost about three and a half percent costs when Liz Truss became prime minister.


LESH: So you've got that huge increase in government borrowing costs, that creates a fiscal hole in itself, that means you have to borrow more to pay

back the interest on the previous borrowing, let alone what you might want to go forward.


LESH: So that's the fiscal challenge. But I think the growth challenge is even bigger in some respects. We have the UK heading into this effective

stagflation, which is we have very high levels of inflation 10 percent in the UK. And on top of that, the fact that the UK economy seems to be

slowing down and potentially on the way to a recession, as we have to put up interest rates.

So that kind of economic hole is something the country is going into going forward. And that's quite frightening.

FOSTER: We've already seen that play out for mortgage rates. And the Conservative Party members typically own houses, don't they? They're the

ones that often get governments into power and keep them in power. And that's a real challenge, because the mortgage rates went up because of the

Liz Truss budget. And they're not going to come down in the way that the yields are that you were just referring to.

LESH: So yes, exactly the whole the whole premise of the Tory party, to some extent according to at least some commentators inside of the property

owning democracy.


LESH: And you have to have something you want to conserve want to be a conservative and, and there's very much strong correlations between

property ownership and conservative voting.

Now we have seen mortgage rates go up, they were again, they're already on the way up before Liz Truss came to the premiership; we've got this longer

term factor, very loose monetary policy for the Bank of England, just like the Fed and the U.S. And in the euro zone, strong inflationary pressures as

a result of supply chain issues. What Putin is doing all that together, as well as the mini budget impact is as push up interest rates.

And either even if they went up slightly higher, because of the Liz Truss mini budget fiscal statement, it they're on the way up already. So you've

got all these economic headwinds, no matter who comes to power. And it's that struggle of trying to put forward an agenda for growth, which comes


So we hear a lot about stability, but I think we probably actually going to hear a lot more about what is he going to do to achieve the economic growth

to get the UK prosperous, being prosperous again, not just being stable and being stagnant, not just going backwards, but actually growing again.

FOSTER: The city I mean, the market seemed very positive, that Rishi Sunak at the moment, but he needs to start delivering pretty quickly. So that big

speech, when he first enters Downing Street, what will the city be looking for from that to keep the market stable?

LESH: Yes, I just spoke to a lot of marketing for the short term, it's a sense of stability and Rishi Sunak externally delivers a sense of

stability. There's, there's no sense unlike Truss that he's going to try and do anything radical, a different diverge in.

But it sounds like that probably comes with its own set of risks. You can be set, you can be pretty stagnant. And this is effectively the argument

Liz Truss was making, which I think, in some respects is true, which is the UK has stagnated for last decade, you do need a new approach to economic

policymaking, you can't just do the same thing has been done before.

Now, obviously, we need stability needs to set up the fiscal situation before you can get on to the economic reforms and things like finding

regulations or spinning up infrastructure in the UK, or dealing with the opportunities provided by Brexit.

We have a lot of negative things about me back betrayed on Brexit. But the whole argument for Brexit here is now we have an opportunity to set our own

regulatory standards. So what is the UK going to take advantage of that new freedom? Or is it is it just going to continue with the status quo?

There's a lot of open questions there in terms of direction of the government and where Rishi Sunak takes the UK now.

FOSTER: He'll have to announce his new cabinet pretty quickly, won't he? So that might be radical in the sense that it's going to be all change.

LESH: It could be all change. And it could be some repeats from the Liz Truss's cabinet; it could be bringing back some previous forces. I think

we'll know by tomorrow evening, the shape of the cabinet and the day after that the extended ministry and we'll get that exciting moment of people

marching up Downing Street.

FOSTER: And we're all speculating on who will get what, Penny Mordaunt will no doubt get a good position.

LESH: I mean, I would think so. But I think it's really hard to say, I don't think Rishi set necessarily owes anything to anyone. I mean, Liz

Truss got specifically endorsed by Penny Mordaunt during the leadership campaign.

Therefore you pretty much expect Penny Mordaunt has got a strong position. And the same went for a lot of other senior members of the cabinet under

Liz Truss.


LESH: Rishi Sunak he has his previous supporters and endorses but he's not as dependent on them because he has much broader support from the party and

then might otherwise have been the case under Liz Truss.

FOSTER: OK, we're waiting for the big speech, it could potentially happen tonight. If we get that appointment with a king arrange. It's probably

going to be tomorrow though, Matthew Lesh, thank you very much for joining us. Rishi Sunak the new British Prime Minister, more after the break.



CHATTERLEY: Welcome back to "Connect the World". And in other news today to China now where Xi Jinping has become a norm breaking third term as the

country's leader and he stacks the ruling body with loyalists tightening his grip on everything from the economy to foreign policy. CNN's Selina

Wang reports.


SELINA WANG, CNN CORRESPONDENT (voice over): They're all the boss' men. China's new top leaders have one thing in common. They're shooting pings

closest allies. She has ripped up the playbook re-crowned for a third term.

XI JINPING, CHINESE LEADER: I wish to thank the whole party sincerely for the trust you have placed in us.

WANG (voice over): Appointing four new men in the seventh person Politburo Standing Committee the apex of power, the top man after Xi is Lee Qiang,

the Shanghai party chief and expected to be the next Premier.

Here he is back in April getting shouted out by Angry Shanghai residents. He oversaw the city's draconian two month lockdown; residents struggle to

get enough food and medical care. Fights broke out between residents and COVID workers where protests erupted, but in Xi's China.


WANG (voice over): The current Premier Li Keqiang is retiring from party leadership. He's seen as an economic liberal and not so close to Xi. In

fact, he's a protege of former top leader Hu Jintao who was publicly humiliated at the closing ceremony of the party congress.

The 79 year old Hu is seated there next to Xi Jinping. After several confusing moments he's led out of the room, escorted by two men, he

appeared reluctant to leave. On his way out he said something to Xi and patted the shoulder of Li Keqiang. Chinese state media later said it was

because of health reasons.

SHIH: I am not a believer of the pure health explanation, and it seemed like he sat down in a pretty stable manner and then suddenly, he was asked

to leave. I'm not sure if he whispered something said something to Xi Jinping.

WANG (voice over): Regardless, it was a symbolic moment out with Hu and the collective leadership of his era. While Xi Jinping is all about one man

rule and those closest to him all men. For the first time in at least 25 years there are zero women in the 24 member Politburo, the second most

powerful group in party hierarchy.

Since Xi took power, he's purged rivals crushed dissent, reasserted communist party control over every aspect of China. He's only expected to

double down on his iron rule in his third term and beyond.


WANG (voice over): Xi's next five years may see more tense U.S. China relations more intimidation of Taiwan with the world dealing with an ever

more authoritarian and aggressive China. Selina Wang, CNN, Hong Kong.


CHATTERLEY: In Iran chance for women life and freedom continue to ring out as protesters take to the streets for a sixth week. Students are raising

their voices in the latest show of anti-government protests sweeping the nation.

This video from the pro-reform outlet IranWire shows women chanting against the paramilitary forces at a university outside Tehran. This video also

from IranWire shows high school students demonstrating in a Kurdish city.

The protests were sparked by the death of Mahsa Amini in police custody. The Iranian regime is now targeting journalists to help control the

narrative. Nada Bashir has more.


NADA BASHIR, CNN REPORTER (voice over): Women life freedom, a rallying cry that is only growing stronger as protests in Iran enter their sixth week

sparked by the death of 22 year old Mahsa Jina Amini, who died in the custody of Iran's notorious morality police in September. But as the regime

intensified, its brutal and deadly crackdown on protesters, it's also scrambling to control the narrative, jailing at least 40 journalists as

protest first began, according to the CPJ.

YEGANEH REZAIAN, COMMITTEE TO PROTECT JOURNALISTS: These are just estimation, I'm sure that correct tallies over 400. Several of the cases of

these journalists that we have covered as soon as they reported about that news on their Twitter channels the next day they were arrested.

BASHIR (on camera): And just walk me through the tactics being used by the Iranian regime. How are journalists in Iran being repressed?

REZAIAN: Security forces usually read the homes of journalists after midnight. In order to create an environment of scare and fear they usually

transfer these journalists immediately to solitary confinement in most cases, they don't let the journalists have access to lawyer.

BASHIR (voice over): Much of Iran's media is under state control with journalists who reject the states narrative facing harsh penalties. Among

them is Nilofer Hamidi, one of the first journalists to break the story of Amini's death in Iranian media.

UNIDENTIFIED MALE: We know that Nilo Hamidi has been held in solitary confinement.

BASHIR (voice over): Here in London journalists at the pro-reform news outlet IranWire, which has been working with CNN to cover the ongoing

protests, are meticulously documenting the detention of journalists in Iran.

UNIDENTIFIED MALE: One of them needs to be confirmed.

BASHIR (voice over): It's a growing list with a concerning lack of clarity on where many of these journalists are being held. Among them are citizen

journalists bravely documenting the regime's crackdown on their phones, and on social media?

UNIDENTIFIED MALE: So for U.S. citizen journalists inside the country are the most important colleagues we have and without them we would not be able

to operate. These are the peoples who risked their lives in order to report.

BASHIR (voice over): With internet blackouts being used by the Iranian authorities as a tool to stem the spread of information. The role of

journalists on the ground bearing witness to atrocities perpetrated by the Iranian regime is growing more important and more dangerous. Nada Bashir,

CNN, London.


CHATTERLEY: Ukraine's foreign minister is inviting outside inspectors into the country after Russia accused Kyiv of planning to use a dirty bomb in

Ukraine and then blame Moscow. A dirty bomb is made by combining radioactive materials with conventional explosives.

Ukraine's Foreign Minister says he's asked the International Atomic Energy Agency to send a team to disprove Russia's claim. The Russian defense

minister called his counterparts in the UK, U.S., France and Turkey and made the accusations without providing any evidence. The West is accusing

Russia of planning a false flag operation. Ukrainian President Zelenskyy said this is how the Kremlin operates.


VOLODYMYR ZELENSKYY, UKRAINIAN PRESIDENT: Today when the Russian Minister of Defense sets up a phone carousel and calls foreign ministers with

stories about the so-called dirty nuclear bomb, everyone understands everything well, they understand who is the source of everything dirty that

can be imagined in this war.


CHATTERLEY: OK, and stay with us. We're going to be heading back to Westminster after this short break where the United Kingdom has a new

leader in place.



FOSTER: Incoming British Prime Minister Rishi Sunak says bringing the country and the conservative party together will be his utmost priority. We

heard from Sunak. Just a short while ago, the former finance minister also mentioned the profound economic challenge facing the UK.

Once he meets with King Charles, Sunak will become Britain's third Prime Minister in two months. Downing Street has reportedly confirmed that that

won't happen today. So we'll expect that to happen tomorrow.

We're waiting to hear how he plans to achieve this unity turn around the economy. Let's go to Bianca. I mean, it's extraordinary, isn't it that

Boris Johnson was just looking he was in power last month, and then we had Liz Truss and now Rishi Sunak.

I mean, it's such a destabilizing time for the British people, isn't it?

NOBILO: Without question, you and I were speaking earlier about how the prime minister's terms lately since David Cameron have become shorter and

shorter and shorter. And Liz Truss unfortunately, although it was partially largely brought on by herself suffering the ignominy of being the shortest

serving prime minister, ever, it has been hugely destabilizing for the markets for the nation, not to be sure who's going to be inhabiting that

building behind me in a month, let alone a year's time.

So Rishi Sunak and the Conservative Party will be hoping that his election as leader will be brought will bring a certain at least stay of stability

for them to try and figure out how they're going to tackle the crises that are ahead of them. And also try to restore some faith and trust that the

public hasn't been.

FOSTER: In terms of the process now, if it doesn't happen today, the appointment Liz Truss remains Prime Minister for the rest of the day. And

then we'll, we'll see her go to the palace in the morning, presumably, and then we'll have the big speech from Rishi Sunak. I wonder if we'll hear

from Liz Truss on the way out because that is the tradition, isn't it?

NOBILO: It is yes, when you were speaking to a guest about that earlier, I was wondering too, because we have had one speech from her by the podium on

the steps of Downing Street. But she doesn't really have any legacy to speak up.

She pointed to two economic measures in the speech that she gave when she announced that she would be resigning. But you do wonder what else she

would speak about it sounds brutal, but with such a short premiership and one which brought so much extra turmoil to the British economy divided the

party further may Britain in some respects a laughingstock in terms of international partners.

What she would say, maybe she will want that last opportunity to have the seal of Prime Minister in front of her and speak to the nation. Perhaps

she's got something left that she wants to address.

Who knows? But as far as we're aware, Max, yes now King Charles the third will be coming back if he isn't back already to Buckingham Palace in

London. So he's physically here and able to receive Liz Truss for resignation and Rishi Sunak to appoint him as prime minister and invite him

to form a government that will in all likelihood take place tomorrow.

But we'd also expect to hear from Rishi Sunak also outside here on the steps of Downing Street. And then, straightaway on Wednesday we'll have

Prime Minister's questions and they'll have to get to the business of government pretty sharpish.

FOSTER: These are all historic moments and they are extraordinary moments as well. And you and I get very excited about them. But I get the

impression the wider public has pretty much tuned out of all of this. They can't keep up with what's going on their disillusion.


FOSTER: They've got their own problems with the cost of living crisis. How's Rishi Sunak going to engage with people?

NOBILO: Well, you're right. There's obviously been impatience, frustration and just sheer disbelief at points at the level of division,

disorganization and navel gazing and self-involvement. It's been perceived as a conservative party when the country is facing this economic crisis.

And people don't know how they're going to be able to feed their families or heat their homes. We can't say that. And I would imagine going forward

Rishi Sunak is going to make it a priority to try and make sure that the people feel like their concerns are fully understood and reengage them in

the process.

Although I would just caveat that Max with saying that as far as the British Indian and Asian community and Hindu community is concerned, there

is a lot of celebration today, at least for this historic monumental step forward having a prime minister of that background.

FOSTER: And the Indian Prime Minister sending very quick to send his congratulations as well to Rishi Sunak today. We'll have much more

throughout the day. Isa is up next on CNN.