LONDON (AP) – British Prime Minister Liz Truss took office last month with hopes and promises to revive Britain’s economy and put it on a path to long-term success.
It didn’t go according to plan.
Instead, Truss’ tenure was marred by turmoil as her economic policies threatened the country’s financial stability, sending the pound to record lows, causing chaos in the bond market and raising mortgage costs for millions of people.
Although Truss took office amid a cost-of-living crisis, the war in Ukraine and the lingering effects of the COVID-19 pandemic, her decision to announce 105 billion pounds ($116 billion) in tax cuts and spending increases without giving details of how she would pay for them has raised eyebrows investors, who warned about the growing public debt.
It undermined confidence in the government’s ability to pay its bills and raised questions about the economic credentials of the new prime minister who took office after a deeply divided leadership contest of the ruling Conservative Party.
The mess over the economic plan weakened Truss’s authority as prime minister and ultimately led to her decision to resign on Thursday
WHAT IS HAPPENING NOW?
The party says it will elect a new leader and prime minister by October 28. Truss will remain Prime Minister until then.
To avoid the need for a protracted election campaign that could have left the country without an effective government for weeks, party leaders decided that lawmakers would have a greater say in the election and without weeks of nationwide canvassing.
As part of the fast-track process, leadership candidates must gather the support of 100 other Conservative MPs — out of a total of 357 — by Monday afternoon. This means a maximum of three fields for legislators to vote on. The last-placed candidate would then be eliminated, and the top two candidates would face an online vote by the party membership.
Conservative leaders are hoping the hotly contested contest will produce a consensus candidate who can unite the party behind the tax and spending priorities already set out by Treasury chief Jeremy Hunt.
WHAT ARE THE BIG OBSTACLES?
The first challenge will come just days after the new prime minister takes office, when Hunt delivers his fiscal plan to the House of Commons on October 31.
Truss sparked the crisis that led to her downfall when she and Hunt’s predecessor unveiled plans for across-the-board tax cuts, without saying how they would pay for them and without providing an independent analysis of their impact on government finances.
Since taking office last week, Hunt has reversed most of those cuts and promised to reduce the national debt as a percentage of economic output in the coming years. He also warned that painful spending cuts would be needed during what is likely to be a “difficult” winter.
Opposition parties and some conservative lawmakers are already pushing for increased spending in areas such as health, welfare, state pensions and free school lunches to protect society’s poorest from rising prices.
WHY ARE THERE NO GENERAL ELECTIONS IN THE UK?
Legally, the government is not required to call an election until December 2024, five years after the Conservatives won a landslide victory under then-Prime Minister Boris Johnson.
But opposition parties and some members of the public are demanding snap elections after the turmoil of recent months. Truss was forced out after less than two months in the job and followed Johnson, who resigned after his authority was undermined by a series of scandals.
The damage done by Truss and Johnson has caused support for the Conservatives to plummet, with some analysts suggesting they would lose many seats if an election were held today. The new prime minister is therefore expected to resist calls for snap elections, and instead try to use the next two years to rebuild confidence before going before the voters.
David Lawrence, a researcher at the Chatham House think tank in London, said people were likely to be focused on the cost of living crisis and rising energy bills this winter, giving the Conservatives time to try to change the narrative.
“I think what will be most important in the next elections is how the prime minister, the government, have dealt with those challenges,” he said. “So if the new Conservative leader believes they can take control of the energy crisis … and that the cost of living crisis is resolved, that people feel they have more money in their pockets by the next election, I think that’s the best they can hope for.” ”
But it may be difficult to resist the pressure for elections.
“At the end of the day, the constitution doesn’t require it, but … I agree in principle that we should test a new prime minister in a reasonably short period of time, rather than waiting until potentially January 2025,” Conservative MP Mark Garnier told the BBC on Thursday. “I think people would be furious, rightly so” if we didn’t hold elections.
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