Liz Truss will become Britain’s next prime minister on Tuesday and will immediately appoint a cabinet of loyalist MPs as her government begins a race against time to set out plans to deal with the cost of living emergency.
She will become Britain’s fourth Tory prime minister in six years after beating Rishi Sunak in the bitterly fought Conservative leadership contest launched after Tory MPs ousted Boris Johnson.
The prime minister-elect is expected to announce plans for an energy price freeze on Thursday as she battles to navigate an overwhelming in-tray during the worst economic crisis in a generation.
She also faces an uphill struggle to win over Tory MPs as she inherits a deeply divided party lagging behind in the polls – some mutinous backbenchers are already said to be plotting her demise. Truss won 81,326 votes (57.4%) of Tory members to the former chancellor’s 60,399 (42.6%), a narrower victory than many had expected.
On Monday night she celebrated the result with loyalist MPs and supporters, but the euphoria of victory will quickly give way to the hard reality of the challenges ahead, with the country gripped by a cost of living crisis and the economy on the brink of recession.
Truss will reveal support for households and businesses later this week, with allies understood to be discussing a £100bn package that could include freezing energy bills. Treasury sources said that under the proposal, funds could be provided by commercial banks and backed by government guarantees, and added to consumers’ bills over the long term.
One move under discussion is to freeze all households’ bills potentially until the next planned general election in 2024, according to reports. Truss was also said to be planning an expansion of North Sea gas extraction.
The plan would see average annual household energy bills remain at their current level of £1,971, instead of rising to £3,549 next month.
Truss used her victory speech at a central London conference centre to say Tory beliefs in freedom, low taxes and personal responsibility “resonate with the British people”. She added: “During this leadership campaign, I campaigned as a conservative and I will govern as a conservative. We need to show that we will deliver over the next two years.”
She promised a “bold plan” to cut taxes and grow the economy, and pledged to “deal with” soaring energy bills and longer-term energy supply, having already vowed to reverse a national insurance rise and cut corporation tax.
Significantly, she appeared to rule out a snap general election, telling the audience in central London that she would “deliver a great victory for the Conservative party in 2024”, an acknowledgment that her party’s fortunes in the months ahead look bleak.
A snap YouGov poll found that 50% of Britons said they were disappointed that Truss was to be the next prime minister, including a third (33%) who were “very disappointed” – considerably more than the 22% who said they were very or fairly pleased.
Johnson will tender his resignation to the Queen at Balmoral on Tuesday, and Truss will visit the monarch at her Highland residence shortly afterwards for confirmation of her appointment.
The new prime minister will then return to London, where she will address the nation in a speech outside No 10 Downing Street – unless she is forced indoors by forecast thunderstorms – before putting the finishing touches to her first cabinet.
Kwasi Kwarteng, Truss’s closest cabinet ally, will become her chancellor, and she is also expected to confirm the appointments of Suella Braverman as home secretary and James Cleverly as foreign secretary. Those appointments will mean that, for the first time, there will be no white men in the four great offices of state.
Her rival, Rishi Sunak, is not expected to be offered a job in her cabinet, a break from the tradition whereby most unsuccessful leadership contenders have been offered posts. The former chancellor told the BBC that the cabinet was “not something I’m thinking about”, and some allies suggested he would prefer to remain on the backbenches in case Truss’s leadership implodes.
Priti Patel and Nadine Dorries both announced that they would quit as home and culture secretaries, and return to the backbenches. Cabinet Office minister Nigel Adams and Tory party co-chair Ben Elliot also announced their resignations.
One symbolic expected appointment is that of Jake Berry, the chair of the Northern Research Group of MPs, who is being closely linked to the job of party chair, with the task of keeping the “red wall”.
Truss has been under pressure not to appoint a cabinet of loyalists to try to unite the party. But allies have already rejected such a move, suggesting it would mean giving jobs to those who had openly criticised her throughout the bruising leadership campaign.
“She would be appointing people who didn’t support her – people who very publicly said her ideas were shit and she’s incompetent,” one cabinet minister said.
Even though new prime ministers generally expect a bounce in the polls, any political honeymoon is likely to be short-lived, with an overflowing in-tray of thorny issues including the prospect of an autumn of strikes, the NHS and ambulance services on their knees, the conflict in Ukraine showing no sign of easing, and an ongoing row with Brussels over how to implement Brexit in Northern Ireland.
However, Truss’s first days in office will be dominated by her plans to deal with the energy crisis. Kwarteng signalled on Monday that she would let borrowing rise in the short term and prioritise tax cuts for the wealthy over redistribution. “Given the severity of the crisis we face, there will need to be some fiscal loosening to help people through winter,” he said.
The would-be chancellor claimed that Britain can afford to borrow more and that among G7 nations only Germany has a lower debt-to-GDP ratio, even though this would mean suspending the fiscal rules Truss had promised Tory members she would stick to.
Senior Tories lined up for appointments in Truss’s cabinet have been told “in no uncertain terms” not to criticise the idea, first suggested by Labour, that energy bills could be frozen.
Industry sources said they believe a “deficit tariff fund”, first mooted by ScottishPower earlier this year, could be the preferred option to help households. Under the proposals, commercial banks would put cash into the state-backed fund, which suppliers could then draw on to freeze customers’ bills.
The cost of the scheme would then be paid back over 10 to 15 years through a surcharge on bills or via taxation. However, that option could cost more than £100bn.
Source: The Guardian