Liz Truss will enter Downing Street on Tuesday after a fierce battle to become Britain’s next prime minister to finalize a two-year package of energy relief for homes and businesses that could cost up to £100bn.
After seven weeks of contesting to succeed Boris Johnson, the foreign secretary defeated rival and former chancellor Rishi Sunak by a margin of 81,326 votes to 60,399 – 57-43 in the Conservative Party members’ ballot.
Truss will meet with the Queen on Tuesday at Balmoral, the monarch’s estate in Scotland, and will immediately return to London to announce his cabinet and address the economic crisis facing the country.
She would become Britain’s 56th prime minister and the fourth Tory resident of No. 10 in just six years. She will also become the country’s third female prime minister after Margaret Thatcher and Theresa May.
The truce is seeking to limit energy prices in a costly market intervention to avoid domestic distress and business collapse. The average household bill will increase from around £2,000 to over £3,500 in October.
Kwasi Quarteng, whose truce is expected to become chancellor, wrote in the Financial Times on Sunday that “decisive action is needed to get families and businesses through this winter and next”.
Truss’s team said the total package, which will be announced within days, would not exceed £100bn but could come close given the scale of support needed for households and to protect companies.
With 27.4 million households, the cost of freezing gas and electricity bills at the current typical annual cost of £1,971 would be in the region of £40 billion per year, regardless of commercial support.
If wholesale gas prices remain at their current level of £5 per therm, this bill will rise sharply, from £3 to 66 percent of the therm reference price from next month reducing the £3,549 retail energy price cap. Is.
One option being considered by Truss’s allies is for the government to achieve its objective of protecting businesses and households by limiting the wholesale price of gas, rather than freezing household and business bills.
Quarteng is weighing whether large-scale government intervention in the energy market should be recouped from general taxation or through future levies on consumer bills. The latter can be politically problematic.
Truss seeks to reform energy markets to reduce bills. It wants to persuade nuclear and renewable energy producers to voluntarily take on new 15-year contracts at prices far below current rates, which give them the benefits associated with greatly inflated gas prices.
Truss paid tribute to outgoing Prime Minister Boris Johnson, saying he was “admired from Kyiv to Carlisle”.
“I will present a bold plan to cut taxes and grow our economy, to tackle long-term problems with people’s energy bills and energy supply,” she said.
Truss promised a “great” Conservative election victory in the 2024 vote, but voting on Monday painted the scale of the challenge.
A Snap poll by YouGov found that only 14 percent of Brits thought Truss would make a better prime minister than Johnson. A survival poll gave the opposition Labor Party a 46-29 point lead over the Tories.
The incoming premier, 47, who has served in cabinet for eight years, has promised a right-wing agenda of tax cuts in an effort to keep Britain from slipping into a protracted recession – largely funded by borrowing.
Truss won the party crown after a long and acrimonious contest to succeed Johnson, who resigned on 7 July following a cabinet rebellion led by Sunak over his conduct as prime minister.
Truss presented himself as Thatcher’s successor, promising tax cuts and less regulation, and insisting that it was wrong to look at all economic policy through the “lens of redistribution”.
In foreign policy, it took a tough stand on Russia and vowed to stand with Brussels on post-Brexit trading arrangements in Northern Ireland.
Truss will announce her new cabinet on Tuesday. Quarteng will be his chancellor, while Foreign Office Minister James Cleverly is expected to be promoted to foreign secretary. Attorney-General Suella Braverman is expected to replace Priti Patel, who stepped down as home secretary on Monday.
Patel, who was not expected to join Truss’s new team, said in his resignation letter that it was “important” that his successor uphold the controversial plan to remove some asylum seekers in Rwanda.
Culture Secretary and Truss supporter Nadine Dorries announced Monday night that she was stepping down from cabinet. Truss invited him to be on their team. Ben Elliott, a key aide to Johnson and a controversial party fundraiser, announced he was stepping down as Tory co-chair.
Among other key appointments, Johnson’s right-wing aide Jacob Rees-Mogg is expected to become business secretary with responsibility for energy policy. Ben Wallace will remain in defense, while Truss aide Therese Coffey has been tipped to become health secretary.