The new UK Prime Minister Liz Truss must already have switched her political tactics from campaign mode to real mode.
The first thing she needs to do is to banish the fallacy that the UK can have all the benefits of a particular economic strategy but none of its disadvantages.
The first issue under discussion from the memos and reports on the new prime minister’s desk must be the cost-of-living crisis.
Like the rest of Europe, the UK is grappling with the worst economic crisis since the global financial crisis of 2008.
UK household energy bills are spiralling beyond affordability, inflation is already in double digits, mortgage rates are rising and the onset of a prolonged recession is now a strong probability. The British public is expecting a rescue package to avoid a socio-economic disaster.
While the government has already offered some relief to struggling households, charities are warning that if the new prime minister fails to increase the payouts it will be a catastrophe for millions of financially distressed families.
Truss, however, said she wanted to reduce taxes to stimulate economic growth. Her long-term proposal includes keeping the corporate tax rate at 19 per cent, reversing the rise in national insurance, introducing a family tax break and raising defence spending to 2.5 per cent of GDP.
The Institute of Fiscal Studies argues: “Only last month, the Office of Budget Responsibility warned that the public finances are already on an unsustainable long-term path: large, unfunded, permanent tax cuts would only act to worsen this problem.”
Truss will not need reminding that the help her government can affordto give to struggling households will always depend on the health of public finances.
The National Health Service has long been one of the most treasured UK institutions in the eyes of the British people. Today, the NHS faces a dire situation with about 6.7 million people waiting for non-emergency hospital treatment, the highest in the service’s 74-year history. The most immediate challenge is filling 100,000 vacancies across the NHS.
Like all other Conservative leadership contenders, Truss promised to solve the enormous health and social care crises. Politicians know that the next election could well be lost or won on the situation at the NHS.
The cost of living and the efficiency of public services are the bread and butter questions at the top of most voters’ priority list.
Truss’s other pressing challenge is resolving outstanding foreign policy unfinished business. The Brexit saga has not been entirely resolved as relations with the EU have soured over the implementation of post-Brexit trading arrangements for Northern Ireland.
Truss’s sabre rattling in the leadership campaign was hopefully just an electioneering tactic.
The UK and the EU need to find a way to continue trading normally without unrealistic threats.
The war in Ukraine presents another challenge for the new prime minister. Truss, like her predecessor, Boris Johnson, will want to continue to show solidarity and active support for Ukraine. But if the Biden administration softens its stance after the November mid-term elections and the EU weakens its resolve on sanctions against Russia, Truss will face a diplomatic dilemma in dealing with the new Ukraine developments.
Truss’s honeymoon as prime minister may already be over. Reading the reports in her bulging in-tray must have landed her in realpolitik.