Liz Truss was announced Monday as the leader of the ruling Conservative Party and Britain’s next prime minister, taking power at a time when the country is facing a cost-of-living crisis, industrial unrest and a recession.
After weeks of an often-tempered and divisive party leadership contest that pitted Truss against Rishi Sunak, a former finance minister, the announcement sparks the start of a Boris Johnson reshuffle.
He was forced to announce his resignation in July after months of scandal and will travel to Scotland on Tuesday to meet Queen Elizabeth to formally tender his resignation. His successor will follow him and will be asked to form a government.
Long the favorite in the race to replace Johnson, Truss will become the fourth Conservative prime minister since the 2015 election. During that period, the country has endured crisis after crisis and now faces what predicts it will be a long recession caused by skyrocketing inflation that reached 10.1% in July.
Boris Johnson’s foreign secretary, Truss, 47, has vowed to act quickly to tackle Britain’s cost of living crisis, saying she will draw up a plan within a week to tackle the increase in energy bills and ensure future fuel supply.
In a television interview on Sunday, he declined to give details of the measures he says will reassure millions of people who fear they won’t be able to pay their fuel bills as winter approaches.
She declined to comment on a report that her energy plan could exceed 100 billion pounds (C$151 billion), but the lawmaker suggested that it would be her finance minister, Business Minister Kwasi Kwarteng, who writing on Monday that the government could afford to borrow more to finance it. support for households and businesses.
Concern that tax cuts could fuel inflation
Truss had signaled during his leadership campaign that he would defy convention by scrapping tax increases and cutting other taxes that some economists say would fuel inflation.
That, along with a pledge to review the Bank of England’s powers while protecting its independence, has seen some investors dump the pound and government bonds.
The Institute for Fiscal Studies last month questioned whether Britain’s next prime minister would have room to make major permanent tax cuts.
“2nd hardest post-war recap”
Truss faces a long, expensive and hard-to-do list, which opposition lawmakers say is the result of 12 years of poor Conservative government. Several have called snap elections, which Truss has said he will not allow.
Veteran Tory lawmaker David Davis described the challenges she would take on as prime minister as “probably the second most difficult brief of any post-war prime minister” after Tory Margaret Thatcher in 1979.
Boris Johnson will tender his resignation as Prime Minister to Queen Elizabeth II on Tuesday at Balmoral Castle in Scotland. The Queen will then name Liz Truss as her successor. (Henry Nicholls/Reuters)
“I don’t actually think any of the candidates, or any of them going through it, really know how big it’s going to be,” he said, noting the costs could run into tens of billions of pounds.
Truss has said she will appoint a strong cabinet, eschewing what one source close to her called a “presidential style” of government, and will have to work hard to win over some MPs 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 his predecessors, because he was not the most popular choice among lawmakers in his party.
Higher utility bills heading into winter
First, it will address the pressing issue of rising energy prices. Average annual household utility bills will rise by 80 per cent in October to £3,549, ahead of a predicted rise to £6,000 in 2023, decimating personal finances.
Britain has lagged behind other major European countries in its bid to support consumers’ energy bills, which opposition lawmakers blame on a “zombie” government that cannot act while the Tories their leadership contest.
LOOK | UK energy bills to rise by 80% in October:
UK energy bills to rise by 80% in October
Energy bills in the UK are set to soar by 80 per cent in October as Ofgem, the government’s energy regulator, raises its cap on consumer prices.
In May, the government set out a £15bn support package to help households with energy bills as part of its £37bn cost of living support plan.
Italy has budgeted more than 52 billion euros (68 billion Canadian dollars) so far this year to help its population. In France, increases in electricity bills are capped at 4%, and Germany said on Sunday it would spend at least 65 billion euros to protect consumers and businesses from rising inflation.