Liz Truss has been named the United Kingdom’s next prime minister, emerging victorious in a contentious leadership race within the governing Conservative party. Her appointment comes at a critical juncture as the country grapples with a cost-of-living crisis, industrial unrest, and the looming threat of a recession.
After a protracted and at times divisive leadership contest pitting the former foreign minister against former finance minister Rishi Sunak, Truss secured victory with 81,326 votes to Sunak’s 60,399 among Conservative Party members.
In her first statement as prime minister-elect, Truss emphasized her commitment to addressing pressing issues. «We need to demonstrate our capacity to deliver over the next two years,» she asserted. «I will introduce an ambitious plan to reduce taxes and stimulate economic growth.»
Truss also pledged to tackle the energy crisis, addressing both surging energy bills and long-term energy supply concerns. Her ascendancy marks the initiation of a handover from outgoing Prime Minister Boris Johnson, who announced his resignation in July following months of scandal and waning support for his administration.
As part of the formal transition, Johnson will travel to Scotland to meet with Queen Elizabeth, where he will officially tender his resignation. Subsequently, Truss will follow suit, receiving the monarch’s invitation to form a new government.
Having long held the frontrunner status in the race to succeed Johnson, Truss is set to become the fourth prime minister for the Conservatives since the 2015 election. During this period, the UK has weathered a series of crises, with the latest threat being a projected long recession exacerbated by soaring inflation, which reached 10.1% in July.
Formerly serving as the foreign minister in Johnson’s cabinet, the 47-year-old Truss has committed to swift action to alleviate the cost-of-living crisis. She aims to formulate a plan within a week to tackle rising energy bills and secure future fuel supplies. Truss’s campaign hinted at a willingness to break with convention by scrapping tax increases and reducing other levies, a move that some economists fear may exacerbate inflation.
These policy proposals, along with her intent to review the Bank of England’s remit while preserving its independence, have led to market uncertainty, causing some investors to divest from the pound and government bonds.
Attempting to allay market concerns, Kwasi Kwarteng, a likely choice for finance minister in Truss’s administration, reassured in a Financial Times article that her government would engage in «fiscal loosening» while maintaining fiscal responsibility.
Truss inherits an extensive and demanding agenda that opposition lawmakers attribute to the 12-year tenure of the Conservative party in government. Despite calls for an early election from several quarters, Truss has ruled out this possibility.
Veteran Conservative lawmaker David Davis likened the challenges awaiting Truss to the formidable tasks faced by post-war prime ministers, possibly trailing only behind Margaret Thatcher in 1979 in terms of difficulty. The costs associated with these challenges could potentially run into tens of billions of pounds.
To navigate these challenges successfully, Truss has pledged to form a robust cabinet and depart from the «presidential-style» of governing. However, she must work diligently to secure the support of lawmakers within her party who had backed Sunak during the leadership race.
The Institute for Government think-tank noted that Truss begins her premiership from a relatively weaker position than her predecessors, as she wasn’t the most favored choice among Conservative party lawmakers.
Her immediate focus will center on addressing the pressing issue of skyrocketing energy prices, with average annual household utility bills set to surge by 80% in October, reaching £3,549, before an anticipated further increase to £6,000 in 2023, placing severe strain on personal finances.
Compared to other major European countries, the UK has lagged in offering support for consumer energy bills, a situation attributed by opposition lawmakers to a government that appeared immobilized during the Conservative leadership contest. In May, the government unveiled a £15 billion support package as part of its £37 billion cost-of-living assistance program.
In contrast, Italy has allocated over €52 billion this year, France has capped electricity bill increases at 4%, and Germany has committed to spending at least €65 billion to shield consumers and businesses from rising inflation.
