Liz Truss will be named the next Prime Minister of the United Kingdom on Tuesday. But she has to be in this new role even before she assumes office. The road ahead is full of challenges. No easy solutions lie ahead.
Chilling winter
Winter looks scary because of the increasing gas prices. Russia is in no mood to relent its squeeze on gas supply. People in the United States find it increasingly hard to pay their energy bills.
There are talks of an imminent announcement soon on freezing the energy bills for two years and extending subsidies on energy bills. This will adversely impact measures to limit deficit financing. In the long run, this could adversely impact inflation.
Support for Ukraine
Boris Johnson went all guns blazing to support Ukraine in the war against Russia. Many saw this as an attempt by Boris to divert attention from his political drubbings at home. Liz Truss has assured continuous support to Ukraine. This will come at a huge cost to the citizens as gas price will soar. As the situation becomes dire, people will debate the merit of continuing with a war which could have been averted had Russia been engaged in negotiations. The cost of support for the Ukraine war will soon outnumber the benefits. If this happens, this will put Truss in a difficult situation.
The conservative party needs to face the electorate for general elections in 2024. Three terms in power breed many anti-incumbency factors. High prices, inflations and resentment in the masses due to war could backfire for Liz and her Conservative party.
Taxes cut
Taxes cut by Truss will hopefully help some businesses remain afloat and ease the financial burden on households. But the government has to collect taxes and fund various developmental projects.
Tax cuts mean more purchasing power. More money with the consumer means an increase in prices if the supply side fails to meet the surge in demand. Lower tax collection means less money for the government to carry out welfare measures and steer the country out of the economic slowdown.
Uniting the party is a big challenge
Liz Truss has become the leader of the conservative party, but her victory has not been as emphatic as that of Boris Johnson. Many ministers did not want her to be the new leader of the conservative party. This will pose a serious problem for her to unite the party and buckle up for the next elections.
Many analysts believe her rise to the coveted PM post has been very rapid. She doesn’t have many achievements in her political resume that could put her in the category of a popular leader.
But that all is history now. She has embarked on a new journey. She still has enough time and ammunition to make her journey forward a grand success.
