Campaigning during election is always a very tough, tiring affair as the new UK Prime Minister Liz Truss would, no doubt, have experienced this summer. But if that is difficult work, it will bear little comparison to the huge tasks that lay ahead now that she holds the highest political office in a highly challenging period in the country.
A priority would be to bring the Conservative Party back together after it became divided with supporters backing the various candidates and their policies in electing a Tory party leader.
It will be remembered that the final two candidates for the prime minister’s position, Rishi Sunak and Liz Truss disagreed profoundly about how to tackle the challenges the country faces, and their supporters as well as the supporters of the other candidates, will have divided loyalties. Truss will have to find a way to bring people together.
This is a significant period for a politician who is relatively unknown to voters. In a recent survey carried out in Wales, not one person could recall something that Truss had said or done in her career, bearing in mind she was trade minister and foreign minister prior to her present position. First impressions can at times be long lasting in politics, if she gets the tone right, she can expect to rise well in the polls. But if she doesn’t, she may find herself struggling.
She has stated that her focus will be on economic growth as a priority with forecasts suggesting a very difficult period for the economy in the next few months. The Bank of England which has raised the rate to 2.25pc last week, expects inflation to reach as high as 13 per cent in the last quarter of this year.
When Russia’s invasion of Ukraine was still in its early days, in March, and Russian gas still flowed into Europe, the Office for Budget Responsibility was projecting the largest fall in a financial year since records began in 1956. It will have got worse since. Yields on government gilts have started rising sharply and so is the cost of borrowing.
Truss’ response would be that these worries further underline the need for stronger growth. Productivity gains are therefore vital if Britain is to generate the living standards it has come to expect and the tax revenues necessary to pay for the NHS.
The new prime minister’s reform agenda will require political capital to deliver and time to bring results, at a time when the former is in short supply and people are struggling now. Regulatory reforms will need to be passed by a House of Lords free to disregard commitments not contained in the 2019 Manifesto. Cutting taxes the poorest do not pay will not help them with rising prices, even if it attracts jobs and incentivises investment in future.
It would seem pragmatism is required, just as it was for former PM Margaret Thatcher – whom Liz Truss likes to follow – over four decades ago. It is instructive that while Thatcher is remembered for tax cuts, the early part of her time in power was characterised by tax-raising budgets, particularly in Geoffrey Howe’s 1981 Budget that introduced new taxes on petrol, North Sea oil and a windfall tax on bank deposits.
Only a few months ago, many Tories were writing Truss off. During a period of great political volatility, she has shown herself a clever operator and a strong campaigner. The risks she took – not resigning from Cabinet and staying close to Boris Johnson – helped her to succeed in her campaign. She will need to remain strong and determined if she is to beat the challenges she faces.
andyjalil@aol.com
The writer is our foreign correspondent based in the UK
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