Liz Truss named as UK's next PM

·3-min read

Liz Truss has been named as Britain's next prime minister, winning a leadership race for the governing Conservative party at a time when the country faces a cost of living crisis, industrial unrest and a recession.

After weeks of an often bad-tempered and divisive leadership contest that saw the foreign minister face off against former finance minister Rishi Sunak, Truss came out on top on Monday in a vote of Conservative Party members, winning by 81,326 votes to 60,399.

"I will deliver a bold plan to cut taxes and grow our economy," Truss said after the result was announced.

"I will deliver on the energy crisis, dealing with people's energy bills, but also dealing with the long-term issues we have on energy supply."

The announcement triggers the start of a handover from Boris Johnson, who was forced to announce his resignation in July after months of scandal saw support for his administration drain away.

He will travel to Scotland to meet Queen Elizabeth on Tuesday to officially tender his resignation. Truss will follow him and be asked to form a government by the monarch.

Johnson said on Twitter that Truss "has the right plan to tackle the cost of living crisis, unite our party and continue the great work of uniting and levelling up our country."

"Now is the time for all Conservatives to get behind her 100 per cent."

After his defeat Sunak said the Conservative party musst unite behind the winner.

"It's right we now unite behind the new PM, Liz Truss, as she steers the country through difficult times," Sunak said on Twitter.

Long the front-runner in the race to replace Johnson, Truss will become the Conservatives' fourth prime minister since a 2015 election. Over that period the country has been buffeted from crisis to crisis, and now faces what is forecast to be a long recession triggered by sky-rocketing inflation which hit 10.1 per cent in July.

Foreign minister under Boris Johnson, Truss, 47, has promised to act quickly to tackle Britain's cost of living crisis, saying that within a week she will come up with a plan to tackle rising energy bills and securing future fuel supplies.

Truss has signalled during her leadership campaign she would challenge convention by scrapping tax increases and cutting other levies in a move some economists say would fuel inflation.

That, plus a pledge to review the remit of the Bank of England while protecting its independence, has prompted some investors to dump the pound and government bonds.

Kwasi Kwarteng, widely tipped to be her finance minister, sought to calm markets on Monday, by saying in an article in the Financial Times newspaper that under Truss there would need to be "some fiscal loosening" but that her administration would act in "a fiscally responsible way".

Truss faces a long, costly and difficult to-do list, which opposition lawmakers say is the result of 12 years of poor Conservative government. Several have called for an early election - something Truss has said she will not allow.

Truss has said she will appoint a strong cabinet, dispensing with what one source close to her called a "presidential-style" of governing, and she will have to work hard to win over some lawmakers in her party who had backed Sunak in the race.

First, she will turn to the urgent issue of surging energy prices. Average annual household utility bills are set to jump by 80 per cent in October to STG3549 ($A5993), before an expected rise to STG6000 in 2023, decimating personal finances.

Britain has lagged other major European countries in its offer of support for consumer energy bills, which opposition lawmakers blame on a "zombie" government unable to act while the Conservatives ran their leadership contest.

In May, the government set out a STG15 billion support package to help households with energy bills as part of its STG37 billion cost-of-living support scheme.