LONDON (BLOOMBERG) - Ms Liz Truss' campaign to be British prime minister has appeared straightforward, with promises of tax cuts and optimism in the face of an economic crisis helping her to a comfortable poll lead over Mr Rishi Sunak.
But behind the scenes, disagreements are emerging just as Ms Truss' camp starts to look beyond the Conservative leadership contest to taking power on Sept 6. Aside from the usual and expected jostling for government jobs, there are now fundamental divisions over how to help Britons struggling with soaring prices this winter, people familiar with the matter said.
With the economic outlook getting steadily worse, supporters of Ms Truss' small-state, low-tax plan for Britain are trying to ensure she stays the course, amid warnings from other allies that the approach will become untenable.
Britain's cost-of-living crisis has leaped to the top of the political agenda, and on Friday (Aug 26), the energy regulator Ofgem said household payments for electricity and natural gas will be almost triple this winter the level they were last year.
Short on details
Ms Truss so far has kept quiet about exactly how her government would help the millions of people who may tip into poverty and struggle to pay for essentials. In interviews and at leadership hustings, the foreign secretary has repeatedly refused to explain how she would structure any new state support beyond tax cuts.
Writing in Friday's Daily Mail newspaper, Ms Truss promised "immediate support" if she becomes premier, but in a hustings late Thursday (Aug 25) she said while energy prices are a "massive issue" for people, "what isn't right is to just bung more money into the system".
Allies, including Mr Kwasi Kwarteng, widely expected to be her Chancellor of the Exchequer, have also hinted at further measures but without giving details.
One factor in the secrecy is that Ms Truss' supporters do not agree on how far she should go, according to people familiar with their thinking.
Ms Truss, who draws much of her support from the ideological right of the Conservative Party, which still idolises former leader Margaret Thatcher, favours tax cuts over what she has described as "handouts".
One of the people said in contrast to Mr Boris Johnson, who enraged many Tories with his indecision on spending versus fiscal conservatism, she would be the most ideologically clear-minded premier in the last 40 years.
Tax cuts vs handouts
Yet, a person involved in her campaign said it was inevitable Ms Truss will have to announce more aid, probably funded by more borrowing. That's because public expectations of state intervention shifted in the pandemic after Mr Sunak, who was Chancellor of the Exchequer at the time, rolled out expensive furlough and other programmes to keep households and businesses solvent.
One Tory Member of Parliament, who voted for Ms Truss early in the leadership contest, fears her opposition to handouts would stay with her in office and risk handing political opponents an advantage.
Mr Keir Starmer's Labour Party, which leads in most national polls, has pledged to freeze energy prices. The MP said they are worried a Truss government would turn Britain into an experiment on whether the Laffer curve theory - that lower tax rates can lift government revenues by spurring people to work and invest more - could help solve a cost-of-living crisis.
Another Truss-backing MP said this winter would be her main test in office, warning that failing to offer adequate support could lead to social unrest and bring her premiership crashing down within six months.
According to one person working in Ms Truss's campaign, the method and extent of support remains a live issue. Some members want to limit it to pensioners and the most vulnerable, while others favour a more generous pandemic-style package extended to the middle class.
The team is also exploring creative ways to keep the cost off the government's balance sheet.
Who are moving in?
The question of who would hold power in a Truss administration is also crucial to the decision-making process.
While a small number of figures from the centre of the Tory party would be appointed to her Cabinet, the vast majority of roles will go to loyalists on the right, a person familiar with her plans said.
Along with Mr Kwarteng, who has a long history of working with Ms Truss, there will likely be prominent jobs for Ms Therese Coffey, Mr Simon Clarke, Ms Suella Braverman, Mr Jacob Rees-Mogg, Mr David Frost, Mr James Cleverly, Mr Iain Duncan Smith, Ms Kemi Badenoch and Mr John Redwood.
One risk is that Ms Truss struggles to unite the party if she takes office.
A Tory official who spoke on condition of anonymity also questioned whether her campaign rhetoric and, for example, Mr Frost's calls for small-state government could be reconciled with public expectations for ministers to intervene.
There are also grumblings about the team of advisers Ms Truss is expected to appoint.
While campaign officials insist relations remain positive, clear groupings have already formed among her likely top team.
Mr Mark Fullbrook, a veteran Tory aide who worked for Australian strategist Lynton Crosby and helped Mr Johnson's own leadership campaign in 2019, is widely tipped to be her chief of staff. He would likely be supported by another Crosby protege, Mr David Canzini, who also worked for Mr Johnson.
But the potential promotion of Crosby alumni to the top of No. 10 has surprised some of Ms Truss' longer-term backers.
Mr Fullbrook might be an effective campaigner, but he has little experience of government, and his appointment might only be temporary, a person familiar with the matter said.
Other key positions are likely to go to Mr Jason Stein and Ms Ruth Porter, two Truss allies who work for the advisory firm Finsbury Glover Hering.
A third grouping is Ms Truss' team of special advisers at the foreign office, who are younger and likely to fill communications, parliamentary management and policy roles. They include Mr Adam Jones, Ms Sophie Jarvis, Ms Sarah Ludlow, Mr Jamie Hope and Mr Hugh Bennett.
Describing the distinct parts, one Truss backer said three acronyms would be fundamental to her administration: CTF (Crosby's old firm Crosby Textor Fullbrook), IEA (the Institute of Economic Affairs free-market think tank) and ERG (the European Research Group of Brexiteer Tory MPs).
Whether such an ideological government made up of competing factions can meet the public's demands this winter is open to question, the supporter said.