Liz Truss will become Britain’s next prime minister on Tuesday and immediately appoint a cabinet of loyalist MPs as her government begins a race against time to put together plans to tackle the cost of living emergency.
She will become Britain’s fourth Conservative prime minister in six years after beating Rishi Sunak in the hard-fought Tory leadership contest launched after Tory MPs sacked Boris Johnson.
The prime minister-elect is expected to announce plans for an energy price freeze on Thursday as she struggles to navigate an overwhelming economy during the worst economic crisis in a generation.
He also faces an uphill battle to win over Tory MPs as he inherits a deeply divided party that is lagging behind in the polls – some mutinous MPs are already said to be plotting his demise. Truss won 81,326 votes (57.4%) from Tory members to 60,399 for the former chancellor (42.6%), a narrower victory than many had expected.
He celebrated the result with loyalist MPs and supporters on Monday night, but the euphoria of victory will quickly give way to the harsh reality of the challenges ahead, with the country gripped by a cost-of-living crisis and the economy in the brink of recession.
Truss will reveal support for households and businesses later this week, with allies understood to be discussing a £100bn package which could include freezing energy bills. Treasury sources said that under the proposal, the funds could be provided by commercial banks and backed by government guarantees, and added to long-term consumer bills.
One move being discussed is to potentially freeze all household bills until the next general election due 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, rather than rising to £3,549 next month.
Truss used his victory speech at a central London conference center to say Tory beliefs in freedom, low taxes and personal responsibility “resonate with the British people”. He added: “During this leadership campaign, I campaigned as a Conservative and I will govern as a Conservative. We have to show that we will deliver for the next two years.”
He promised a “bold plan” to cut taxes and grow the economy, pledging to “tackle” rising energy bills and energy supplies in the long term, after promising to reverse the increase in national insurance and reduce corporate tax.
Significantly, he appeared to rule out a snap general election, telling the audience in central London that it would “deliver a great victory for the Conservative party in 2024”, an acknowledgment that his party’s fortunes in the coming months look bleak.
It follows a seven-week contest in which both campaigns traded bitter personal attacks, and a vacuum at the top of the government left the public searching in vain for reassurance, leading senior Tories to fear lasting damage to their electoral prospects.
A YouGov snap poll found that 50% of Britons said they were disappointed that Truss would be the next Prime Minister, including a third (33%) who were “very disappointed”, considerably more than the 22% who said that they were very or very quite happy
Johnson will tender his resignation to the Queen at Balmoral on Tuesday, and Truss will visit the monarch at his Highland residence shortly afterwards to confirm his appointment.
The new prime minister will then return to London, where she will address the nation in a speech outside 10 Downing Street, unless she is forced indoors by forecast storms, before giving the final tweaks to his first cabinet.
Kwasi Kwarteng, Truss’s closest cabinet ally, will become his chancellor, and is also expected to confirm the appointments of Suella Braverman as home secretary and James Cleverly as foreign secretary. These appointments will mean that, for the first time, there will be no white men in the state’s top four offices.
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His rival Rishi Sunak is not expected to be offered a job in his cabinet, a break from tradition by which most unsuccessful leadership contenders have been offered posts. The former chancellor told the BBC the cabinet was “not thinking”, with some allies suggesting he would prefer to remain on the backbenches should Truss’s leadership implode.
Priti Patel and Nadine Dorries announced they were stepping down as culture and home secretaries and returning to the backbenches. Cabinet minister Nigel Adams and Conservative party co-chairman Ben Elliott also announced their resignations.
An expected symbolic appointment is that of Jake Berry, chairman of the Northern Research Group of MPs, who is closely linked to the job of party chairman, with the task of maintaining the “red wall”.
Truss has come under pressure not to appoint a loyalist cabinet in an attempt to unite the party. But allies have already rejected the move, suggesting it would mean giving jobs to those who had openly criticized him during the hard-hitting leadership campaign.
“She would appoint people who didn’t support her, people who publicly said her ideas were crap and that she’s incompetent,” one cabinet minister said.
While new prime ministers are generally expected to bounce back in the polls, any political honeymoon is likely to be short-lived, with an overflowing tray of thorny issues, including the prospect of an autumn of strikes, the NHS and knee ambulance services. , the conflict in Ukraine shows no sign of letting up, and an ongoing dispute with Brussels over how to implement Brexit in Northern Ireland.
However, Truss’s first days in office will be dominated by his plans to tackle the energy crisis. Kwarteng signaled on Monday that he would let short-term borrowing rise and prioritize tax cuts for the wealthy over redistribution. “Given the severity of the crisis we face, there will need to be some tax relief to help people through the winter,” he said.
The aspiring chancellor claimed that Britain can afford to take on more debt and that among the G7 nations only Germany has a lower debt-to-GDP ratio, although this would mean suspending the fiscal rules that Truss he had promised Conservative members that he would join.
Senior Tories lined up for Truss cabinet appointments have been told “in no uncertain terms” not to criticize the idea, first suggested by Labour, that energy bills could be frozen.
Industry sources said they believe a “deficit rate 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 use to freeze customer bills.
The cost of the scheme would then be paid back over a period of 10 to 15 years through a surcharge on bills or through taxes. However, this option could cost more than £100 billion.