Liz Truss on Monday was elected as Britain’s new Prime Minister, defeating Rishi Sunak. She has also been named as the leader of the governing Conservative Party.
Truss will succeed Boris Johnson and is poised to take power at a time when the country is facing a cost of living crisis, industrial unrest and recession fears.
Earlier in July this year, Johnson was forced to resign from Prime Minister’s position after months of scandal. He will travel to Scotland to meet Queen Elizabeth on Tuesday to officially tender his resignation. Truss will follow him and be asked to form a government.
Long the front-runner in the race to replace Johnson, Truss, has become the Conservatives’ fourth Prime Minister since 2015 election. Over that period the country has been buffeted from crisis to crisis, and now faces what is forecast to be a long recession triggered by sky-rocketing inflation which hit 10.1% in July.
Truss, 47, had promised to act quickly to tackle Britain’s cost of living crisis, saying that within a week she will come up with a plan to tackle rising energy bills and securing future fuel supplies, as per media reports.
Speaking in a TV interview on Sunday she had declined to give details of the measures and said will reassure millions of people who fear they will be unable to pay their fuel bills as winter approaches.
She declined to comment on a report that her energy plan could exceed 100 billion pounds ($115 billion), but the lawmaker tipped to be her finance minister, business minister Kwasi Kwarteng, wrote on Monday that the government could afford to borrow more to fund support for households and businesses.
Truss, during her leadership campaign, had signalled she would challenge convention by scrapping tax increases and cutting other levies that some economists say would fuel inflation.
That, plus a pledge to review the remit of the Bank of England while protecting its independence, has prompted some investors to dump the pound and government bonds.
Kwarteng sought to calm markets on Monday, saying in an article in the Financial Times newspaper that under Truss there would need to be “some fiscal loosening” but that her administration would act in “a fiscally responsible way.”
A difficult to-do list
Truss faces a long, costly and difficult to-do list, which opposition lawmakers say is the result of 12 years of poor Conservative government. Several have called for an early election – something Truss has said she will not allow.
Veteran Conservative lawmaker David Davis described the challenges she would take on as prime minister as “probably the second most difficult brief of post-war prime ministers” after Conservative Margaret Thatcher in 1979.
“I actually don’t think any of the candidates, not one of them going through it, really knows quite how big this is going to be,” Reuters quoted him as saying, adding that costs could run into tens of billions of pounds.
Truss has said she will appoint a strong cabinet, dispensing with what one source close to her called a “presidential-style” of governing, and she will have to work hard to win over some lawmakers in her party who had backed Sunak in the race.
The Institute for Government said Truss would have a weaker starting point than any of her predecessors, because she was not the most popular choice among her party’s lawmakers.
First, she will turn to the urgent issue of surging energy prices. Average annual household utility bills are set to jump by 80% in October to 3,549 pounds, before an expected rise to 6,000 pounds in 2023, decimating personal finances.
Britain has lagged other major European countries in its offer of support for consumer energy bills, which opposition lawmakers blame on a “zombie” government unable to act while the Conservatives ran their leadership contest.
In May, the government set out a 15-billion-pound support package to help households with energy bills as part of its 37-billion-pound cost-of-living support scheme.
Italy has budgeted over 52 billion euros ($51.75 billion) so far this year to help its people. In France, increases in electricity bills are capped at 4% and Germany said on Sunday it would spend at least 65 billion euros shielding consumers and businesses from rising inflation.
