Truss Time ? Tackling the First Challenges of an Ailing Britain

It’s all change at No 10. Team Truss has transformed to PM Truss, her campaign into government policy. What can we expect? As per her inaugural remarks from the steps of Downing Street, she has three immediate priorities:

  • Get Britain working again through taxation that rewards hard work and reforms that prioritise building homes, infrastructure and growth;
  • Tackling the energy crisis with a package of measures unveiled this week and to secure future energy supply;
  • Ensure that people are able to get the doctors appointments and access NHS services they need.

The economy, the cost of living crisis, and the NHS, in other words. What tools will PM Truss use to tackle these chronic issues? Most likely, it’ll be a combination of  reversing the National Insurance increase earlier this year, cancelling planned increases in corporation taxes, and unveiling an emergency budget within days of taking office. And there may be more to come, including possibly radical approaches to overhauling unit energy prices (e.g. either capping at the supply end, or offsetting at the demand end). The question is whether they will work, and  what impact will they have on the shape of Britain itself, in either whittle down the size of the state, or (more likely) temporarily increasing the size and interventionist scope of the state. Theories abound! The New Statesmen suggests this week that Truss “is an ideologue, more of a classical liberal than a conservative, and is determined to cut taxes and reduce the size of the state” (2-8 September 2022, p. 3). 

Deliver, deliver, deliver

Truss’s victory speech is premised on tackling this trinity of challenges, via a swift and assured approach to problem-solving. In her own words: “We will deliver, we will deliver, we will deliver.” The challenge will be getting some clear and deliverable details on these three goals, after a campaign largely oblique on the finer points of her plans, and a general unwillingness to engage with the media. To some extent, she didn’t need to. The hustings structure pulling together both die-hard and recent Conservative Party members were early on won around, thanks to Truss’s quick u-turn from ‘no bailouts’ to a mandate promising tax cuts, and a slow but steady improvement in the more important of her debate performances. Sunak’s own response after his campaign has been the tokenistic platitude of encouraging the party, and the country, to get behind the new PM, in the face of tough times.

This is something of an understatement. Commentaries abound with Game of Thrones-esque introductions to the effect that “winter is coming”. It most assuredly is. Britain has hardly emerged from the juggernaut of crisis since Brexit, including Covid and post-Covid recovery, the war in Ukraine, crippling energy price rises compounded with cost of living squeezes, and a full-blown constitutional rumpus with the Scottish government. It’s not entirely clear how promises of tax cuts and annoying the French are going to settle things at home, or press the reset button abroad.

Tackling the cost of living and energy security

Truss now takes over a British economy teetering on the brink of a recession that could last for a year, or possibly more. Rebuilding bridges with the Bank of England seems a sensible first step here, as well as forming swift alliances with the Treasury and importing Treasury wonks directly into No 10 to provide Truss with the inhouse expertise necessary to swiftly introduce the promised measures that will help households tackle exorbitant energy prices that have shot up by 80% this year. Truss’s key tool here: set against the context of an emergency budget – is a likely freeze, or cap on energy prices, bolstered by cuts to business taxes, and a temporary VAT reduction of 5% aimed at boosting consumer spending. So much for short-term solutions. Truss’s medium term challenge is serious overhaul of the British energy sector, from its panoply of actors, lacklustre regulators, and broader energy supply issues. This in turn will raise the prospect of possible nationalisation of key energy assets on one side, and having to work with European counterparts undertaking their own range of radical ‘energy easing’ packages on the other.

Engagement with Europe: Non-Plussed Truss?

Truss’s approach to Europe is likely to be something of a mixed bag. An avowed Brexiteer, who has already packed her Cabinet with similarly pro-Brexit, even right-wing colleagues, Truss cut her political teeth on forging a range of post-Brexit trade agreements. The majority of these have produced more political point-scoring than hard dividends in terms of increased trade capacity or new partners. Her subsequent role as Foreign Secretary has seen a variety of credible leadership in tandem with both NATO and European Union colleagues within the highly-charged context of the Ukraine crisis, tempered by a lack of much engagement with either bilateral or multilateral opportunities to recalibrate the UK’s foreign and security policy in Europe.

One bright spot on the horizon is the possible invitation by the EU to the UK under the new ‘European Political Community’ framework first touted by French President Emmanuelle Macron, in a bid to pull together like-minded European democracies with a shared interest in security, defence, and even more important areas like energy security. If Truss accepts the invitation to this October get-together, it could open the door to initial rapprochement on key areas, allowing agreements on ticklish issues including the Northern Ireland Protocol to be cultivated rather more easily than at present. Equally, Truss has a knack of missing key opportunities to remain silent. The best, recent example of this is her astonishingly non-plussed suggestion that“the jury is out” over whether French President Emmanuel Macron was a ‘friend or foe’. Euroscepticism may have played well to the home crowd for the previous resident of No 10, but post-Brexit Britain has moved on, needs to work maturely to rebuild relations with its European neighbours. Mercifully, neither Brussels nor Paris were especially piqued. Indeed, Ursula von der Leyen, European Commission President was – accommodatingly – one of the first international leaders to congratulate Truss, stating simply that “the EU and the U.K. are partners,” while looking forward in a less than subtle allusion to the ongoing post-Brexit rows between the two sides to “a constructive relationship, in full respect of our agreements”.

Re-examining the Northern Ireland bill (currently making its way through the House of Commons) that would unilaterally override parts of the protocol could do much to restore relations with Northern Ireland, the Republic of Ireland, and Brussels, as well as restoring much-needed faith in the UK’s ability to be a trust-worthy and respected diplomatic partner in the world. More to the point, such a move would restore much needed relations between the UK and Irish governments, with Dublin especially piqued by the UK’s ongoing determination to simply ignore key provisions of the protocol and replace them with its domestic legislation allowing for various circumventions of the original deal. The irony here is that Truss’s reputation for u-turns – even in her most recent leadership campaign – may allow her to reflect, and recalibrate, changing tack on the rationale of what Dublin and many others regard as a “treaty-flouting bill” ahead of its upcoming scrutiny by House of Lords. Call it u-turns, call it pragmatism, call it a new broom: the political capital that comes with the beginning of a new leader is both vital and short-lived. While Truss lacks the full democratic mandate of an electoral victory, she has the authority to make a clear and courageous step-change here, one that could halt the bill, inspire new solutions, and produce far better working relations with the UK’s key partners all around.

What Next? Ceremony and Policy

Within the first 24 hours of taking office, Truss had likely been focused on the energy plan, thoughts about the emergency budget, NHS issues, and more broadly, her growth-oriented agenda. Now, with the passing of her late Majesty Queen Elizabeth II, the Prime Minister is engaged on a wholly shifted schedule for the next fortnight, from the Privy Council oaths taken over the weekend, to planning the State Funeral, to setting up working relations with His Majesty, King Charles III. She will need to tread carefully, working to ensure that this critical and fraught time is supported by a steady hand at No. 10, the Cabinet Office, as well as cross-governmental connections with the House, the Lords, and Whitehall more generally. Connecting with, and speaking on behalf of the British people is now the most critical part of her initial schedule; doing so effectively will allow Truss to build up a critical mass of legitimacy ahead of a likely 2024 election. Only after the initial transition period engendered by the evolution of monarchs has passed will she then be able to refocus properly on the campaign mandatereducing the cost of living price shock on families, and more broadly transforming Britain into the ‘aspiration nation’ with high paying jobs, safe streets, and opportunities for all. She also said that her government would seek to protect freedom and democracy around the world, as that was the only way to ensure security at home.