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From anti-Thatcher protests to ‘Reaganomics’: Meet up with the UK’s new prime minister

New Conservative Party leader and incoming prime minister Liz Truss reacts as she leaves the Conservative Party Headquarters in central London having been announced the winner of the Conservative Party leadership contest at a meeting in central London on September 5, 2022.

Niklas Halle’n | Afp | Getty Images

LONDON Following a drawn-out Conservative Party leadership contest then one of a political power vacuum in the U.K. following resignation of Prime Minister Boris Johnson the united states now includes a new leader.

Liz Truss, as yet the U.K.’s foreign minister, beat rival Rishi Sunak, the country’s former finance minister, to win the leadership race with the effect announced on Monday.

With members of the Conservative Party asked to vote for his or her favorite candidate, around 57% voted for Truss while 42.6% voted for Sunak.

Truss has had around 57% of the vote while Sunak achieved 42% of the vote.

With a cost-of-living crisis brewing in the U.K., as elsewhere in Europe as inflation continues to go up, Truss will need to hit the bottom running to cope with the immediate squeeze on Britons’ pockets, with energy bills forecast to soar in the fall.

Political commentators and economists have already been poring over Truss’ political history in addition to her economic pledges on the campaign trail for an improved idea on where she usually takes a country that, along with facing a potential imminent fall in living standards, is yet to locate a grip on the economic cost of the Covid-19 pandemic or the fallout from leaving the EU.

CNBC includes a whirlwind guide to the U.K.’s new prime minister, with a number of the more standout moments in her political career up to now.

Truss past, present (and future?)

While she’s been elected the brand new leader of the ruling right-leaning Conservatives (and because of that, the brand new prime minister) Truss can’t be said to have already been born and bred in to the Conservative Party tribe.

Truss, now 47, was created into what she’s referred to as a left-wing household, her father a mathematics professor and her mother a nurse.

She recalls her mother taking her on nuclear disarmament marches, run by the Campaign for Nuclear Disarmament (CND), in the first 1980s where they might sing anti-Margaret Thatcher songs. In another radical departure from her present political incarnation, Truss was a dynamic person in the center-left Liberal Democrats party as a adult, once advocating the abolition of the monarchy while speaking at a celebration conference.

However, it had been after completing her studies for a qualification in philosophy, politics and economics (a standard course for British politicians to take at university) at Oxford that she decamped to the Conservative Party.

Truss married accountant Hugh O’Leary in the entire year 2000 and in the ensuing decade, she threw herself into politics, attempting (and failing twice) to be elected as a Conservative Person in Parliament.

In 2010, however, she finally succeeded in becoming the MP for THE WEST Norfolk, which remains her constituency now although faced another hurdle to attain that position when local party activists tried to possess her deselected as an applicant as she hadn’t declared an affair in 2006 with a married MP, Mark Field. Her marriage survived the revelations and she and her husband have two teenage daughters.

It had been in then-Prime Minister David Cameron’s government about ten years ago that Truss really rose to political prominence, serving as as parliamentary under-secretaryof state for childcare andeducationin 2012 and environment secretary 2 yrs later.

For the reason that role, Truss was widely lampooned for a speech she gave at the Conservative Party conference in 2014 where she made that which was viewed as an exaggerated plea for British cheese, telling the conference in earnest: “We import two-thirds of our cheese. That. Is. A. Disgrace.”

Prior to the 2016 referendum on EU membership, Truss campaigned on the “Remain” side but later said she regretted that stance and backed Brexit. In Boris Johnson’s government she’s held the positioning of international trade secretary and, as yet, foreign minister.

‘Reaganomics’

There’s been speculation that Truss is really a fan of “Reaganomics” and may pursue similar policies in power. Reaganomics identifies the economic policies implemented by former U.S. President Ronald Reagan in the 1980s which broadly targeted at reducing taxes and regulations while also reducing public spending and controlling the way to obtain money.

Exponents of such policies say they enhance a “trickle-down” effect where lower taxes on businesses subsequently spur investment and growth but critics say such policies increase income disparity and social inequality while increasing public debt.

Conservative leadership candidate Liz Truss greets supporters as she attends a hustings event, section of the Conservative party leadership campaign, in Birmingham, Britain August 23, 2022.

Phil Noble | Reuters

In accordance with a written report by Unearthed, the investigative arm of Greenpeace, Truss visited conservative think tanks in the U.S. in 2018 to go over tax and regulatory reform.

Neither of these thinktanks, the Heritage Foundation and American Enterprise Institute, could confirm to CNBC that such meetings had occurred. The former told CNBC it had no record of any public appearance or private meeting held in 2018 with Truss, as the latter cannot confirm or deny this type of meeting had happened.

During the alleged meetings. Liz Truss was chief secretary to the Treasury. The U.K. Treasury confirmed to CNBC that on Sept. 19 in 2018, Truss attended several meetings in the U.S., ending up in the American Legislative Exchange Council to go over “state level economics” and attending two roundtables; one with Americans for Tax Reform (to, unsurprisingly, discuss tax reform) and a Heritage Foundation Regulatory Reform roundtable.

During her time at the Treasury, Truss argued against government bureaucracy and state interventions in people’s lives, in addition to against higher government spending that she said means higher taxes, saying this might mean the Tories were “crushed” at the polls.

NATO Secretary General Jens Stoltenberg welcomes British Foreign Secretary Liz Truss before their bilateral meeting in Brussels, Belgium, January 24, 2022.

Olivier Matthys | Reuters

Nonetheless, Truss does may actually favor policies comparable to those through the era of “Reaganomics.” She pledged tax cuts on the campaign trail, including reversing a growth in the rate of National Insurance tax (this tax will pay for social security spending in the U.K. and the tax rise was introduced by then-Chancellor Rishi Sunak, Truss’s rival in the leadership race, in April) aswell promising no new tax rises no energy rationing.

She’s argued that rather than funding tax cuts with minimal public spending, the U.K. should issue more debt and extend the maturity of its public debt.

Truss in addition has been keen to seem business-friendly (a long way off from her predecessor Johnson who once famously quipped ‘F— business”) as she’s promised to scrap a well planned rise in corporation tax from 19% to 25% that has been set ahead into force in 2023.

Within an interview with the BBC on Sunday, Truss said she’d announce an idea to cope with the U.K.’s rising energy costs inside a week of taking office, although she offered no information on how she’d do that. She had announced weeks ago that she’d introduce a crisis budget in the initial couple of weeks of taking office to make sure support was coming as bills rise.

She’s already announced that she’d temporarily suspend green levies on energy bills but experts say she’ll need to dig far deeper to tackle a looming crisis with British energy bills likely to hit over $4,000 per year per household in 2023 if action isn’t taken.

Bills and Brexit

Precisely how far Truss can realize her economic pledges remains to be observed, needless to say, with economists saying you can make promises on the campaign trail. Berenberg Bank Senior Economist Kallum Pickering noted that regardless it is the future finance minister that may contain the purse strings.

However in any case, the U.K.’s new leader is facing a challenging economic backdrop, Pickering said in an email published prior to the leadership result.

“The mix of surging inflation and tightening monetary policy is tipping the U.K. right into a mild (with regards to output losses) but painful (because of high inflation and rising interest levels) recession which will last before second quarter next year,” he said, describing the outlook as you of “slumpflation” that another prime minister would need to cope with. Truss in addition has indicated that she’d review the lender of England’s mandate.

Rycroft: Truss has 'only days' to formulate energy crisis solution

Meanwhile, it’s uncertain what direction the U.K.’s fractious relationship with the EU will need under Truss.

As stated, her former “Remainer” status has arrived at haunt her and she’s since talked tough on the EU, keen to interest a big pro-Brexit contingent in the parliamentary Conservative Party and its own wider membership.

It had been Truss, for instance, who in June submit the controversial “Northern Ireland Protocol Bill,” proposed legislation that could give U.K. ministers powers to unilaterally scrap elements of the Brexit deal regarding Northern Ireland, much to the EU’s annoyance.

Because of its part, the bloc has reportedly said you won’t continue negotiations over Northern Ireland as the bill continues its passage through the British Parliament.

Truss had previously warned the U.K. could have “no choice but to do something” if EU lawmakers usually do not show the “requisite flexibility” on the protocol.

Janine Schmitz | Photothek | Getty Images

The British public’s appetite for a continuing political battle over Brexit may very well be limited, Pickering said, noting that what the British economy needs most at this time is a go back to “stable and predictable politics.”

“We believe the wider U.K. public is currently bored by Brexit. Instead, noisy U.K.-EU relations and the chance of a trade war with the EU if the U.K. reneges on its commitments increase economic uncertainty and hurt business investment,” he said.

The brand new leader of the U.K., he added, “will most likely see that it really is within their interest to pursue a calmer method of EU matters compared to the populist Johnson.”

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