Truss’ challenges

September 21, 2022

After the state funeral of its longest-serving monarch Queen Elizabeth II, British politics is returning full-throttle with Liz Truss back under pressure over a deepening economic crisis.

Proving all the opinion polls right, Truss has won the coveted post of British prime minister, but she has inherited a daunting set of circumstances that none of her predecessors in the last five decades faced in their first day in office. All the previous economic and political crises in recent political history of the UK stand pale when compared with the current energy and cost-of-living crisis. It would not be an exaggeration to say that all the problems of the past 50 years have converged on the UK in one fell swoop.

The UK faces an economic emergency that is unprecedented since World War II. Truss will meet it, even if she is unwilling, with GBP100 billion of public money, exorbitantly higher than what her predecessor, Boris Johnson, spent on furlough during the Covid crisis. Will she make a barefaced U-turn for a prime minister who spent the whole summer vehemently campaigning for office on a pledge of no more such “handouts”? Partly, yes. Yet brute necessity will compel her to find a plausible justification for her reverse gear on her campaign slogans.

A looming energy crisis is hovering around 10 Downing Street -- consumers, producers and retailers are all in agony. Thousands of small businesses are facing imminent bankruptcy if the energy prices keep moving upwards with this velocity. There is every likelihood that, after 12 years of Tory governments, Truss will be forced to resort to Labour Party’s state interventionism to salvage the situation.

It is now immaterial what kind of management style she adopts, whether she projects herself as principled, brittle or opportunistic. She needs to be ultra-pragmatic in tackling the current imbroglio. What matters the most is how a pragmatic leader can carry the country through this grave emergency. This crisis also provides a great opportunity to Truss, who, during the campaign for Tory leadership in last two months, was making reckless promises of no windfall taxes, to prove her mettle and carve a tangible role for herself in the Conservative Party by managing the economy dexterously till the next general elections without any major mishap.

The energy crisis could do the same for Truss, if mismanaged, what the Covid crisis did for Boris Johnson. She will be under a microscope all the time. Every word she says and every step she takes will be intensely scrutinized by her detractors as well as her own party members, particularly Boris Johnson who is still hoping for a comeback if she falters in the coming days. She needs to further nurture her past habit of moulding her ideas and policies to the prevailing circumstances and make compromises to adjust to the new realities. As a politician, it worked for her well, but as a prime minister, she needs to further realign herself with the new challenges that demand major alteration in her demeanors.

Ripping up the orthodox treasury and overhauling the bureaucratic civil service procedures are at the top of her agenda, but time is not on her side. She has little time till the next elections to undertake such weighty assignments. In her inaugural speech, followed by a brutal cabinet scrubbing, PM Truss has reiterated her confidence that the UK will “ride out the storm” of the worst cost-of-living crisis, and pledged to be “hands on” in urgently tackling the energy crisis with plans to freeze bills, as her survival in Downing Street depends on them.

Truss has announced plans to freeze energy bills at about GBP2,500 a year until 2024 in the first major act of her premiership to win the support from the lower strata of the vote bank. But this action is still tricky and may backfire if it fails to reduce the financial load on the public. Interestingly, Truss declined the advice to cobble together a ‘unity cabinet’ to bring the party together after the ferocious leadership contest by sacking all the major cabinet-level supporters of her leadership rival Rishi Sunak. The most unique feature of her cabinet is the absence of a white member in the cabinet’s four most important portfolios for the very first time in British history.

On the foreign policy front, she is likely to have relatively smooth sailing because; being the former foreign secretary, she has already developed cordial rapport with other world leaders. Russia’s invasion of Ukraine and the resultant global energy crisis have obviously already defined major foreign policy priorities for Truss. Her phone call to Biden on her first day in office, followed a conversation with Ukraine president Volodymyr Zelenskiy, depicting her focus on what she calls “the extreme economic problems caused by Putin’s war”. She will certainly get full backing from the White House for her commitment to deepening alliances through Nato and the AUKUS defence pact, established to counter China’s dominance in the Indo-Pacific region. But her major headaches are at home.

She is surely going to announce the capping of wholesale gas prices in an effort to salvage thousands of small businesses teetering on the brink of collapse. This will be a fairly bold move on her part. But, inheriting a deeply divided Conservative Party lagging behind Labour in the polls, Truss faces an arduous task of winning over disenchanted Tory MPs, whose support is crucial to get her energy package through the Commons. By not inviting any person from the Sunak group to join her cabinet, she has sent a clear message about her hard-nosed approach with regard to the party's internal frictions, but this may prove to be counter-productive unless she keeps her assertiveness within the acceptable limits.

Being a populist leader, Boris is desperate to re-enter Downing Street as premier again. So, Truss will not have an easy run in the coming days.

The writer is a freelance contributor.