Time to Trust in Truss? What comes next for the new PM?

By Sara Price

The long hot summer has come to a close with the news we were all expecting. Liz Truss beat Rishi Sunak (57.4% to 42.6% of votes) to become the new leader of the Conservative Party and the third ever female Prime Minister (and the fourth PM in six years if you’ve been keeping count).

Unfortunately for Truss, she won’t have much of a honeymoon period. People and businesses around the country wait with bated breath for ‘solutions’ to the cost-of-living crisis.

Following months of, as Labour put it, ‘zombie government inaction’, Truss comes into office with a multitude of issues to solve simultaneously. Her in-tray can be divided into two phases.

Phase One: Fix the cost-of-living crisis. She will attempt to achieve this though short-term economic policy specifically addressing high energy costs, along with cuts to Corporation Tax, National Insurance and VAT through an emergency ‘fiscal event’ later this month (not a full Budget as there isn’t time for the usual independent Office for Budget Responsibility forecasting).

Phase Two: Gear up to the 2024 general election by healing divisions in the Conservative Party, by stimulating longer term economic growth through investment and reducing Labour’s lead in the polls.

Her first week in office after being sworn in as PM will be rather busy. This evening she appoints the top positions in her cabinet – much of which has already been trailed in the press. On Wednesday she will take part in her first Prime Minister’s Questions, where Labour leader Keir Starmer will come prepared with a binder full of attack points from a summer of sometimes turbulent Conservative hustings.

On Thursday we can expect an announcement on help with energy bills. In theory, this should be music to the ears of those dreading the encroaching winter months and will be Truss’s first test in government. She needs to get it right in order to increase poll ratings and win over those MPs who have their doubts about whether she’s up to the job. While Truss’s free-market libertarian ideology played out well with members on the campaign trail, in government a more pragmatic approach is needed. Hence on Thursday, a massive government intervention is set to be announced – expected to include a freeze on household energy bills funded through public borrowing and repaid through bills over 10 to 20 years. This is a plan that energy companies have pushed for months and is likely to cost the taxpayer between £100 - £130 billion.

It is not an easy road ahead for Truss. A consequence of the long-drawn-out leadership contest and some short-term memory around the dysfunctionality of Boris Johnson’s leadership, is that Truss inherits a party suffering from divisions and has considerable ground to make up in the polls.

Truss won due to her standing on the right of the party and position as the continuity Johnson candidate who didn’t stab him in the back. But now as party leader and Prime Minister, she must appeal to her parliamentary colleagues and the wider electorate, some of whom still have a nostalgic soft spot for the former PM.

What have we learnt so far this week?

First, the size of the Conservative membership. The party does not routinely confirm their membership headcount, so leadership contests are an opportunity to find out how many fee-paying members the party actually has. At the start of the contest in July there were 172,437 eligible voting members, up from 159,320 in the 2019 leadership election. As a small point of reference - and to put the members who elected the PM in context – there are 46,560,452 people on the electoral register.

Secondly, leadership runner up Rishi Sunak won’t be moving to the US as had been suggested during the campaign. Sunak has confirmed that he'll continue as MP for Richmond (Yorks) and will likely stand again at the next election. Maybe he’s hoping he’ll have an “I told you so” moment on economic policy from the backbenches, without burning his bridges with the party and risking his chance at a second run for the leadership in the future.

Third, while Truss has been labelled as the Johnson continuity candidate and will likely appoint familiar faces from the Johnson era to her Cabinet, she is very much her own person, with well formed principles and ideas. We will have a PM who reads her red box of ministerial papers thoroughly, gets to grip with the detail and is out to prove her doubters wrong. This process is already underway with the clear out the Johnson-era political operation, a reduced headcount of special advisers and officials in No.10 and the strengthening of the Economic and Domestic Secretariat based in the Cabinet Office. Expect government to look different and do more over the coming weeks and months than has been the case for a while.