In a speech outside 10 Downing Street yesterday (September 6), Truss said the UK is facing severe global headwinds caused by the war in Ukraine as well as the aftermath of the pandemic.
“Of course, it won’t be easy, but we will do it,” she said.
Truss reiterated her campaign pledge to cut taxes, and boost “business-led growth and investment”, and said she will take action “this week” to tackle rising energy bills.
She rewarded a number of allies with cabinet posts, including Kwasi Kwarteng, who will become chancellor of the exchequer, James Cleverly who will be foreign secretary, and Suella Braverman who will replace Priti Patel as home secretary after the latter’s resignation.
Pulling millions of consumers out of the more dangerous territory of a serious debt spiral should limit the extent of the oncoming recessionSusannah Streeter, Hargreaves LansdownFormer secretary of state for work and pensions, Thérèse Coffey, will become health secretary and will deputise for Truss.
Coffey will be replaced by Chloe Smith who will become work and pensions secretary.
Kemi Badenoch, who reached the last four in the leadership contest, has been given the title of international trade secretary.
Many prominent supporters of Truss’s rival for the leadership, Rishi Sunak, were excluded from the cabinet, including deputy prime minister Dominic Raab, transport secretary Grant Shapps, and environment secretary George Eustice.
Other cabinet members include Ben Wallace remaining as defence secretary, Nadhim Zahawi as chancellor of the Duchy of Lancaster, responsible for running the Cabinet Office, Simon Clarke as levelling up, housing and communities secretary and Jacob Rees-Mogg as business secretary.
Chloe Smith, MP for Norwich North who was previously minister for disabled people, health at work at the department for work and pensions has been appointed secretary of state for work and pensions.
Truss received 57 per cent of the vote from conservative party members, compared with Rishi Sunak’s 43 per cent, and she met the Queen at Balmoral yesterday to accept the invitation to form a new government.
Energy crisis
One of Truss’s most pressing issues is the cost of energy, which has seen UK households exposed to soaring gas prices after the main supply to Europe from Russia was cut off.
Reports have circulated that Truss intends to fix the energy price cap at £2,500, higher than the current £1,971 but lower than the £3,549 Ofgem said would be introduced in October.
The energy price cap limits the amount energy companies can charge customers per kWh of energy. The cap reflects the average household’s annual energy consumption.
It has been suggested that this will cost around £90bn.
No announcement has yet been made about whether businesses will be assisted with their energy costs this winter, which could cost taxpayers £40bn - £60bn over the next two years.
Businesses do not benefit from any energy price cap.
A short time ago, the FTSE 100 was down 1.1 per cent, after rising slightly on Truss’s appointment.
The “relief rally” in London, that hopes the balm will be applied to the scorching energy bills, is set to dissipate today as reality sets in that the UK population will still be strapped for cash this winter, said senior investment and markets analyst at Hargreaves Lansdown, Susannah Streeter.
“Even if bills are capped at £2,500 as expected by the government, gas and electricity costs will still be sky-high compared to last winter, which will still dent discretionary spending.
“Pulling millions of consumers out of the more dangerous territory of a serious debt spiral should limit the extent of the oncoming recession, and a significant march higher of the headline inflation rate,” she said.
sally.hickey@ft.com
