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- Truss beats ex-finance minister Sunak to become new prime minister
- Boris Johnson will formally resign on Tuesday
- The new leader faces the cost of living and the energy price crisis
LONDON, Sept 5 (Reuters) – Liz Truss was named Britain’s next prime minister on Monday, winning a leadership race for the ruling Conservative party at a time when the country faces a cost-of-living crisis , industrial unrest and a recession.
After weeks of an often acrimonious and divisive leadership contest that saw the foreign secretary go head-to-head with former finance minister Rishi Sunak, Truss prevailed in a vote of Conservative Party members, winning by 81,326 votes to 60,399.
“We have to show that we will deliver over the next two years. I will put forward a bold plan to cut taxes and grow our economy,” Truss said after the result was announced.
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“I will deal with the energy crisis, dealing with people’s energy bills, but also dealing with the long-term problems we have around energy supply.”
The announcement triggers the start of a reshuffle for Boris Johnson, who was forced to announce his resignation in July after months of scandal eroded support for his administration.
He will travel to Scotland on Tuesday to meet with Queen Elizabeth to officially tender his resignation. Truss will follow him and the monarch will ask him to form a government.
Long the favorite in the race to replace Johnson, Truss will become the fourth Conservative prime minister since the 2015 election. a long recession caused by inflation that reached 10.1% in July.
Boris Johnson’s foreign secretary Truss, 47, has vowed to act quickly to tackle Britain’s cost of living crisis, saying within a week he would draw up a plan to tackle the increase in energy bills and ensure future fuel supply.
Truss has signaled during his leadership campaign that he would defy convention by scrapping tax increases and cutting other taxes in a move that some economists say would fuel inflation.
That, along with a pledge to review the Bank of England’s powers while protecting its independence, has seen some investors dump the pound and government bonds.
Kwasi Kwarteng, widely tipped to be his finance minister, sought to calm markets on Monday, saying in an op-ed in the Financial Times newspaper that under Truss there should be “some fiscal relaxation” but that his administration would act “in a fiscally responsible manner”. Read more
Truss faces a long, expensive and hard-to-do list, which opposition lawmakers say is the result of 12 years of poor Conservative government. Several have called snap elections, which Truss has said he will not allow.
Veteran Tory MP David Davis described the challenges she would take on as prime minister as “probably the second most difficult brief of any post-war prime minister” after Tory Margaret Thatcher in 1979.
“I don’t really think any of the candidates, or any of them going through it, really know how big it’s going to be,” he said, adding that the costs could run into tens of billions of pounds.
Truss has said she will appoint a strong cabinet, eschewing what one source close to her called a “presidential style” of government, and will have to work hard to win over some lawmakers in her party who had backed Sunak in the race. .
The Institute for Government think tank said Truss would have a weaker starting point than any of his predecessors, because he was not the most popular choice among lawmakers in his party.
First, it will address the pressing issue of rising energy prices. Average annual household utility bills will rise by 80% in October to £3,549, ahead of an expected rise to £6,000 in 2023, decimating personal finances.
Britain has lagged behind other major European countries in its bid to support consumers’ energy bills, which opposition lawmakers blame on a “zombie” government that cannot act while the Tories their leadership contest. Read more
In May, the government set out a £15bn support package to help households with energy bills as part of its £37bn cost of living support plan.
Italy has budgeted more than 52 billion euros ($51.75 billion) so far this year to help its population. In France, increases in electricity bills are capped at 4% and Germany said on Sunday it would spend at least 65 billion euros to protect consumers and businesses from rising inflation.
($1 = 1.0049 euros)
($1 = 0.8715 pounds)
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Reporting by Elizabeth Piper and William Schomberg; Editing by Frances Kerry, Emelia Sithole-Matarise Angus MacSwan and Frank Jack Daniel
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