UK PM Liz Truss is happy to make enemies

Ms Liz Truss' premiership officially begins Tuesday following a meeting with Queen Elizabeth in Scotland. PHOTO: REUTERS

LONDON - Ms Liz Truss is happy to make enemies. Britain's next prime minister has likened bureaucrats to "gremlins", insulted domestic and foreign leaders, and said British workers need more grit.

The self-styled "disruptor-in-chief" said Sunday she is ready for unpopular decisions, and will now have to pick who to antagonise most as she responds to the full-throttled cost-of-living crisis facing households and businesses.

Signs point to a Truss U-turn on the handouts she warned against as she courted Conservative Party members, who she will try to appease with the tax cuts. Both measures may upset markets over fears of stoking inflation.

The leadership campaign rhetoric will be quickly forgotten, predicted Professor Will Jennings, at Southampton University.

"It's going to be a huge and sudden shift and change," he said. "Delivering that is going to require a great deal of skill."

Yet, even her close supporters have their doubts, and her victory speech Monday will have done little to dispel questions over her communication skills. Her stilted praise of outgoing leader Boris Johnson led to an awkward silence, before the audience picked up on their cue.

Outlining how she plans to fix an economy in its worst state since the 1970s will dominate the frantic early days of Ms Truss' premiership, which officially begins Tuesday following a meeting with Queen Elizabeth in Scotland.

Mounting pressure

Having given little away during the campaign, Ms Truss, 47, will be expected to lay out her thinking in her first speech as premier in Downing Street on Tuesday afternoon, even if details have to wait until later. A fiscal statement or emergency budget is expected later this month.

She will then start to announce her top ministers, likely including Mr Kwasi Kwarteng as Chancellor of the Exchequer, ready for a first Cabinet meeting Wednesday.

As well as rampant inflation, she takes charge of a country facing a crumbling National Health Service and labour strikes bringing transport networks to a halt.

Overseas, London is at loggerheads with Brussels and Washington over Brexit, in part due to the path forged by Ms Truss as foreign secretary.

"This is a tough time for the economy. This is a tough time for families up and down the country," Mr Johnson said in his final speech as leader Tuesday. "We can and we will get through it, and we will come out stronger the other side."

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The immediate pressure is to say something meaningful on energy bills, which are set to almost triple this winter compared to last.

Ms Truss has settled on a plan that will keep prices at their current level, at a cost of as much as £130 billion (S$212 billion) over the next 18 months, according to documents seen by Bloomberg.

Base appeal

How she chooses to tackle soaring living costs carries potential risks. Any significant extra borrowing would disappoint those who bought into a leadership campaign built around promises of tax cuts and, significantly, a smaller state. It was a message designed to resonate in a party still harking back to former leader Margaret Thatcher.

Allies of Ms Truss say the contest underlined her skill at targeting the right group of people, and that she has long been underestimated in large part because of past speeches that have gone viral on social media.

She used her international trade role in Mr Johnson's Cabinet to present herself as a champion of Brexit, complete with flag-bedecked Instagram posts from around the world. That gave her an advantage with Tory grassroots members in the runoff with Mr Rishi Sunak.

Her continued support for Mr Johnson, having stayed on in government when Mr Sunak quit as chancellor, also helped.

"She knows how to play to the base. She knows what the base wants. She's turned up in her smart dresses, she's talked tough, she's loosened up a bit," Ms Jo Tanner, a political strategist and adviser to Johnson when he was mayor of London, said in an interview. "I think she's grown in stature during the summer in a way that people have been advising her to do for years."

Ms Truss' political career has also been full of contradictions, suggesting she can adapt her approach if needed.

She campaigned for Britain to remain in the European Union, before embracing Brexit when the vote went the other way.

She was taken along to protests against Mrs Thatcher's 1980s Conservative government as a child before leading Oxford University's Liberal Democrat society, only later to become the torchbearer of the Conservative right.

Tory fears

But the contest has also raised alarm bells for some Tories, who question whether she can unite the party given she only narrowly made the final runoff with Mr Sunak. There has been ill-disguised mutual animosity since then as the two rivals fought for votes over the summer.

Behind the scenes, even Ms Truss' supporters are worried about public fury over energy prices and failing public services, with one pointing to Health Secretary Steve Barclay being accosted by a woman over ambulance waiting times.

Ms Truss' longstanding antagonism toward civil servants and labour unions are not an obvious fit for a crisis that, at the very least, will require bureaucratic support to deliver any aid measures.

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People who knew her in Whitehall said Ms Truss can be curt with officials and finds it difficult to compromise.

"She's always had that view that the country is held back by risk-averse establishment men who aren't prepared, brave enough, to get stuck in and deliver radical reform," said former Cabinet colleague David Gauke. "The risk is she will too often back her own instincts, when in fact the received wisdom is better informed and has a deeper understanding of the situation."

Truss diplomacy

Ms Truss was also combative as Mr Johnson's top diplomat.

While she thrilled the party base during the leadership contest by saying the "jury's out" on whether the president of Britain's longstanding ally France, Mr Emmanuel Macron, is a "friend or foe", that insult won't help defuse tensions over her plans to rewrite parts of the Brexit divorce deal, risking a trade war.

Persisting with that plan is also likely to anger United States President Joe Biden, who has repeatedly warned Britain not to do anything to risk peace in Northern Ireland.

On the flip side, Britain's stance toward Russia and Ukraine when she was foreign secretary has won plaudits in Eastern Europe, including Poland.

Ultimately, Ms Truss will be judged by her party, which has been in power for 12 years, on how she can overturn Labour's lead in the polls and hold on to the large parliamentary majority won by Mr Johnson in 2019.

Mr Gauke said he believed Ms Truss had gone into politics because she wanted to do "positive things for the country", but that she will be "really tested" by the extreme challenges she now faces.

"I'm not sure that she's always going to be right," he said. BLOOMBERG

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