Liz Truss, the newly appointed prime minister of the United Kingdom, faces an uphill battle as she steps into her role. Truss emerged victorious in a highly competitive leadership race within the governing Conservative party, triumphing over former finance minister Rishi Sunak. With the nation grappling with a cost of living crisis, industrial unrest, and an impending recession, Truss has her work cut out for her.
During her victory speech, Truss emphasized the urgency of delivering results within the next two years. She pledged to present a bold plan to cut taxes and stimulate economic growth and expressed her commitment to addressing the energy crisis and long-term issues surrounding energy supply.
Following her appointment, Truss will undergo a transition process from outgoing Prime Minister Boris Johnson. Johnson, who resigned in July amidst scandals and waning support, will officially tender his resignation to Queen Elizabeth in Scotland. Truss will then be responsible for forming a government, making her the fourth Conservative prime minister since the 2015 election.
Truss had been the frontrunner in the leadership race, but she assumes office at a particularly tumultuous time. The country has faced a series of crises over the past few years and now confronts a prolonged recession triggered by soaring inflation. In July, inflation reached 10.1%, exacerbating the cost of living crisis.
As the former foreign minister under Johnson, Truss has vowed to promptly address the cost of living crisis. Within a week, she plans to devise a strategy to tackle surging energy bills and secure future fuel supplies. However, economists have raised concerns that her proposed measures could further fuel inflation. Truss’s promise to review the remit of the Bank of England, while preserving its independence, has led some investors to sell off the pound and government bonds.
Truss inherits an extensive and challenging to-do list, which critics attribute to 12 years of inadequate governance under the Conservative party. Opposition lawmakers have called for an early election, but Truss has made it clear that she will not entertain this option. Consequently, she must work diligently to garner the support of lawmakers within her party who favored Sunak in the leadership race.
In order to tackle the urgent issue of skyrocketing energy prices, Truss must take decisive action. Household utility bills are projected to surge by 80% in October, amounting to an annual cost of £3,549. By 2023, it is estimated that these bills will rise to £6,000, dealing a significant blow to personal finances. The UK has lagged behind other European countries in terms of supporting consumer energy bills, a point of criticism raised by opposition lawmakers.
The government previously announced a £15 billion support package in May, aimed at assisting households with energy bills as part of a larger £37 billion cost-of-living support scheme. In contrast, Italy has already budgeted over €52 billion this year to aid its citizens, while France has limited increases in electricity bills to 4%. Germany recently pledged to spend at least €65 billion to shield consumers and businesses from rising inflation.
Truss faces an uphill battle as she assumes the role of prime minister. The Institute for Government think-tank has highlighted that she begins with weaker support compared to her predecessors, given that she was not the most popular choice among her party’s lawmakers. Nevertheless, Truss has expressed her intention to form a strong cabinet and adopt a collaborative approach to governance.
The challenges ahead are immense, and Truss must navigate through a maze of crises and public discontent. As she takes the reins of leadership in the UK, all eyes will be on her ability to deliver on her promises and steer the country towards stability and prosperity.
Useful links:
– Liz Truss – Govt. page
– Institute for Fiscal Studies
