Foreign Secretary Liz Truss has won the Conservative leadership election and is set to meet the Queen on Tuesday and be asked to form a Government.
Truss won an acrimonious battle with former Chancellor Rish Sunak to replace the ousted Boris Johnson following a summer of campaigning.
Truss secured 81,326 (57.4%) of the votes against Sunak’s 60,399 (42.6%).
At the start of the summer, Sunak had been seen as odds on to win the leadership battle winning the majority of the Parliamentary party’s vote.
However, he was unable to win over the party members – who make up less than 1% of the UK population – with Truss having consistently polled better in recent weeks.
One reason claimed for the former Chancellor’s struggle was the continued popularity of the exiting Prime Minister with grassroots Tories.
While Truss has been seen as a Johnson loyalist it was the resignation of Sunak which sparked the initial wave of departures that eventually proved his undoing.
Since then Sunak has struggled to dispel the reputation of having played Brutus to the Prime Minister’s Julius Caesar.
With that in mind, it appears that many Conservative voters did not want to hand the laurels to the man who wielded the proverbial knife.
Cabinet
Truss is now faced with the task of building her Cabinet with Kwasi Kwarteng, the Secretary of State for Business, Energy and Industrial Strategy, apparently set to take over the key role of Chancellor.
Over the course of the campaign, it has been speculated if either Truss or Sunak would take a role in the eventual winner’s Government.
However, Sunak has recently suggested he would turn down a job in a Truss Cabinet saying he would not want to disagree with another Prime Minister on “Big Things”.
Former Housing Secretary Michael Gove has also ruled himself out of a return to frontline politics having said he will now concentrate on serving his constituents from the back benches.
A return to the front benches, however, looked unlikely considering his support for Sunak and comments regarding the incoming Prime Minister’s economic policy. Former Housing Minister Dominic Raab, another Sunak backer, also looks likely to miss out on a top job.
Robert Jenrick, yet another former incumbent of the Housing Secretary hot seat, is also expected to be out of the running for a large role in Government. However, it is rumoured that he may be given a brief by Truss.
Jacob Rees-Mogg had been linked with taking on the Housing and Levelling Up role in a Truss Government but this seems to have fallen away over recent weeks.
Simon Clarke, the MP for Middlesbrough South and East Cleveland is now being tipped for a return to the Department for Levelling Up, Housing and Communities.
Clarke was previously Minister of State for Regional Growth and Local Government in 2020. He is currently Chief Secretary to the Treasury.
Meanwhile, Veteran Conservative Sir John Redwood is tipped to return to Government for the first time since 1995.
Redwood was last in Government as John Major’s Welsh Secretary but it is speculated that he could return as a Treasury Minister. A businessman and Thatcherite by background, he has championed tax cuts.
It has also been suggested that the current Chancellor Nadhim Zahawi could be moved to the role of Health Secretary following his success as Vaccine Minister. However, it looks more likely that Truss loyalist Therese Coffey will take the role.
Housing and mortgage market
While the cost of living crisis has dominated the agenda Truss has given some indications on her views of the housing and mortgage markets.
In a Liz for Leader email to Conservative members, she pledged “abolish Soviet top-down housing targets”.
The soon-to-be Prime Minister has also touched on potential plans to expand urban density by building higher-rise accommodation.
She has also vowed to change how mortgages are assessed. Truss said she would support more first-time buyers into homeownership by allowing rent payments to be used as part of the affordability assessment for a mortgage.
This pledge looks set to form part of the mortgage market review announced by Johnson prior to his departure.
She’s also said she will maintain the Bank of England’s (BoE) independence, although she wants to reassess its mandate.
Speaking of the BoE in an ITV debate she said: “I completely support the Bank of England’s independence… the last time the mandate was set was in 1997, in completely different times.”
Additionally, Truss pledged to continue with the Government’s levelling up agenda by creating a funding formula to support struggling areas.
Cost of living crisis
Truss’s economic plans, however, have been branded ‘fairytale economics’ with one of the key differences between her and Sunak being drawn along the lines of the economy.
She has said she will provide support with the cost of energy bills. In an article in the Daily Mail she said: “To those of you feeling the squeeze, my message is clear: I will ensure support is on its way and we get through these tough times.”
However, she has dismissed Labour leader Sir Keir Starmer’s call for a freeze on the energy price cap — dubbing it a “sticking plaster that will cost money but isn’t actually addressing the root cause” of the problem.
Speaking to the BBC yesterday she said she would announce a plan to deal with soaring energy costs within a week of becoming Prime Minister.
However, no details have been offered as to what this plan would look like.
Truss has also said she will conduct a full tax review, looking at things like business rates, as well as making a review of inheritance tax.
She has also promised £30bn in tax cuts, including a reversal of the National Insurance increase which came into effect in April.
A review of taxes for the self-employed has also been promised. Truss said: “If you’re self-employed, you don’t get the same benefits as being in a big company.
“You don’t get paid holidays, you didn’t get those benefits. So the tax system should reflect that more.”
What next?
Tomorrow, September 6th, Johnson will resign as Prime Minister. The event marks a break from tradition with the Queen being at Balmoral due to health issues.
Truss will then be invited by the Queen to form a Government with appointments to her Cabinet expected in short order.
She has also said she will use an emergency budget to “ensure support is on its way” amid soaring energy bills – despite repeatedly saying she favours tax cuts over handouts.
It has previously been indicated that an emergency budget will take in September so with three weeks left to go the last week of the month looks most likely.
