© Reuters September 5, 2022 Liz Truss gestures outside the Conservative Party headquarters after being announced as Britain’s next prime minister in London, Britain.
By William James, Kate Holton and Elizabeth Piper
LONDON (Reuters) – Queen Elizabeth appointed Liz Truss as Britain’s prime minister on Tuesday, sending the country reeling from a recession and energy crisis that threatens the future of millions of families and businesses.
Truss, the fourth Conservative prime minister in six years, flew to the royal family’s Scottish home to ask the 96-year-old monarch to form a government. She replaced Boris Johnson, who was forced to step down after three years in office.
“The Queen received the Right Honorable Elizabeth Truss MP in audience today and asked her to form a new administration,” Buckingham Palace said in a statement.
“Ms Truss accepted His Majesty’s proposal and kissed her hand as she was appointed as Prime Minister and First Lord of the Treasury.”
Truss faces one of Britain’s most vexing lists of problems as a post-war leader.
Her plan to boost the economy with tax cuts, which could cover nearly 100 billion pounds ($116 billion) of energy spending, has roiled financial markets and sent investors dumping the pound and government bonds in recent weeks.
She entered the latest crisis to strike Britain with a weaker political hand than many of her predecessors after defeating rival Rishi Sunak by a wider margin than expected in the Conservative Party vote, and many of the party’s lawmakers initially backed her rival. .
Johnson, who tried to stay in power despite a mass resignation of ministers in July, told reporters and politicians gathered in Downing Street on Tuesday that it was time to unite the country.
“This is it, folks,” Johnson said in his farewell speech. “To my fellow conservatives, it’s time for politics to end, folks. It’s time for all of us to get behind Liz Trust and her team and her program.”
After speaking outside the famous Black Door, he left London, traveled to north-east Scotland and tendered his resignation to the Queen before Truss was asked to replace him at Balmoral Castle.
Johnson used his resignation speech to brag about his accomplishments, including an early vaccination program during the coronavirus pandemic and early support for Ukraine in its fight against Russia.
He lists “delivering Brexit” as one of his main achievements, even though the majority of people now think that leaving the EU was a mistake.
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Johnson’s speech was full of expletives and jokes about a man once loved by many in Britain but hated by many. He refused to show any remorse for the scandals that landed him, including “Partygate”, when the country was under a COVID-19 lockdown.
In the year Britain, which has been under Conservative rule since 2010, has plunged from crisis to crisis in recent years and there is now the prospect of a long-term energy emergency that could drain household savings and threaten the future of small businesses still battered by COVID-19. Era loans.
Household energy bills are set to jump by 80% in October, but a source familiar with the situation told Reuters that Truss could go beyond the COVID-19 furlough plan and freeze bills in a plan that could cost up to £100 billion.
It is not clear how Britain will pay for the support. Government-backed loans to energy suppliers, paid through levies on future bills or general taxes, are being considered as sources.
But the scale of the package, as well as the fact that the energy crisis could last for two years, surprised investors.
The pound has performed worse against the US dollar than most major currencies recently.
In August alone, sterling shed 4% from the greenback and was the worst month for British government bonds in 20 years since around 1978, Refinitiv and Bank of England records show.
Britain’s public finances also remain under the weight of the government’s massive coronavirus spending. Public debt as a share of economic output is not far from 100%, up from about 80% before the pandemic.
($1 = 0.8638 pounds)