Lizz Truss becomes the new Prime Minister of the United Kingdom

Queen Elizabeth II received Liz Truss this Tuesday at Balmoral Castle (Scotland). / Jane Barlow / AFP The new British leader receives from the queen the task of forming a new government, which she is expected to announce throughout the afternoon of this Tuesday. G. Tuesday, September 6, 2022, 18:38 Liz Truss has assumed the position of British Prime Minister on Tuesday. Among the challenges she faces are rising energy bills, a looming recession and industrial conflict. Truss, the fourth Conservative prime minister in six years, flew to Balmoral Castle, the Scottish residence of the royal family, where Queen Elizabeth has formally tasked him with forming a new Cabinet. Truss, who defeated Rishi Sunak in the Conservative Party primaries on Monday, replaces Boris Johnson as head of the country after three tumultuous years in office. “Mrs Truss accepted Her Majesty’s offer and kissed her hands on her appointment as Prime Minister and First Lord of the Treasury,” Buckingham Palace said. The 47-year-old former Foreign Secretary will address the nation from Downing Street on Tuesday afternoon before naming her government. Johnson urged the country and his deeply divided party to unite behind the new leader. Truss inherits an economy in crisis, with double-digit inflation, rising energy costs and the Bank of England warning of a long recession by the end of this year. Workers across the economy have already gone on strike. His plan to revive growth through tax cuts while potentially providing around £100bn for energy has rattled financial markets, prompting investors to dump the pound and government bonds in recent weeks. Having held a place in the chief ministers’ cabinet for eight years, Truss defeated his rival Rishi Sunak in a vote of Conservative Party members by a narrower margin than expected, with more party lawmakers initially backing his rival. Johnson, who tried to cling to power in July despite mass resignations by ministers over a series of scandals, told journalists and politicians gathered in Downing Street on Tuesday that the country must come together. “That’s all folks,” he said in his valedictorian speech. “What I say to my fellow Conservatives is that it’s time for politics to end, folks. It’s time we all support Liz Truss, her crew and her show.” Johnson used his valedictorian speech to brag about his successes, including an early vaccine program during the pandemic crisis and his staunch support for Ukraine in its battle against Russia. He also mentioned “delivering on Brexit” as one of his main achievements. From crisis to crisis Britain, under Conservative rule since 2010, has stumbled from crisis to crisis in recent years and there is now the prospect of a protracted energy emergency that could drain household savings and threaten the future of businesses that they are still burdened by pandemic-era loans. Household energy bills are expected to jump 80% in October, but a source familiar with the situation told Reuters Truss could freeze bills in a plan that could cost around 100 billion pounds. It is not clear how Britain will pay for the support, but government borrowing is likely to increase. The scale of the package, coupled with the fact that the energy crisis could last a couple of years, has spooked investors. The pound has fared worse against the US dollar than most other major currencies recently. In August alone, sterling lost 4% against the dollar and marked the worst month for 20-year British government bonds since around 1978, according to records from Refinitiv and the Bank of England. Britain’s public finances also continue to be weighed down by a massive government spending spree from the coronavirus. Public debt as a percentage of economic output is not far from 100%, compared to 80% before the pandemic. The electoral promises of the new prime minister The British platform of ‘Politico’ has counted 149 commitments dictated by Liz Truss during the long electoral campaign between the candidates to replace Boris Johnson. Although the new prime minister said after her victory that she will deliver on the program the Conservative Party put forward in 2019, her promises in debates, interviews and voter forums underscore her personal ambitions. She this Thursday she will present her plan to respond to rising energy prices. In the almost two months of the campaign, she did not offer details of that plan at any time. But she rejected the official price cap freeze and a special windfall profit tax on power companies proposed by Labour. And she promised to eliminate the green rate on the electricity bill. Now comes her announcement and her assistants have leaked that her team is outlining the latest details of a price freeze. The dilemma would be whether the generated deficit – estimated at some 116,000 million euros in the next two years – is paid gradually by the State through taxes or by consumers directly in their bills in the next 10 or 15 years. Truss promised in his campaign to eliminate the plan of his rival, Rishi Sunak, to increase 1.25% of taxes on income and corporate profits to be used for public health and social assistance for the elderly, and that of the corporate tax rate from 19% to 25%. She will not introduce any new taxes and will start paying off the pandemic debt in three years. “I will judge her by her deeds, not by her words,” Truss said of French President Emmanuel Macron, when asked by her audience. How she combines the indebtedness of the plan for the energy crisis, the 40,000 million that she will not collect due to her resignation from the Sunak plan, and the non-increase of taxes will be the ‘Macronian’ test to which the new British leader is subjected this week. She promised an immediate extraordinary budget, but she does not want the Budget Responsibility Agency, which analyzes state finances, to issue the usual evaluation of her. That specific event will have to be wrapped up in his great strategic vision: a ten-year plan to reform public services and another, also for a decade, to transform the country’s economy. Truss wants to reduce the size of the public administration and the number of state entities. But he wants to increase defense spending to 3% of GDP and maintain continued growth in real terms in spending on health and social assistance. To marry additions and subtractions, his economic reform pursues an average growth of 2.5% per year. He will change the central bank’s mandate to include growth among its objectives. He wants to build small nuclear power plants and for gas to be extracted by ‘fracking’ wherever the population wants it. He supports Net Zero emissions by 2050. He will Require the Treasury to invest more where there is no private investment. He will create a ‘Voxbridge’ in the North: two centers of excellence, like the universities of Oxford and Cambridge (known as Oxbridge), but dedicated to vocational training. All European Union regulations incorporated into British law will be removed before the end of 2023 and your UK will regain full control of its fishing waters. He will maintain the processing of the law that repeals parts of the Irish Protocol agreed with the EU and the plan to extradite immigrants to other countries. In Truss’s ‘Britannia’ there will be no lockdowns or orders to wear masks.