Daunting Challenges:

On September 5, 2022, the UK’s Conservative Party announced that it had chosen Liz Truss as the new prime minister and leader of the party, replacing Boris Johnson through an internal election process. Truss beat out her rival, former Finance Minister Rishi Sunak, with 57% of the vote, while Sunak took 42%. This result was not surprising given recent opinion polls that had showed Truss leading over Sunak. Following the announcement, speculations have already begun about how Truss might approach current foreign and domestic policy challenges in light of her previous position as foreign secretary and her affiliation with a party that tends to support free market policy.

Domestic Challenges

The new prime minister faces a number of urgent crises that will require prompt action. These challenges can be summarized as follows:

1. An acute economic crisis: Truss finds herself tasked with handling a severe economic downtown at a scale that Europe has not seen in decades. The COVID-19 pandemic and Russian-Ukrainian crisis have crippled the European economy and the UK has experienced unprecedented levels of inflation. Inflation is expected to continue to increase from its current level (10%). A recession also looms as a result of supply chain disruptions. The situation has been further complicated by labor strikes and demonstrations as household energy bills have risen by as much as 80% with a possible fuel shortage coming this winter. The pound has also fallen by about 4.5% against the dollar.

2. Domestic instability and public discontent: Truss faces domestic instability as well as waves of public discontent. Over the past months, the UK has witnessed a large number of strikes and protests. In June, British Airways staff and rail staff went on a strike to protest pay cuts, in the largest strikes of their kind in 30 years. The staff protested the government’s economic policies and decisions that had been imposed on workers in these key institutions.

In August, further strikes broke out. Workers at the Port of Felixstowe in Suffolk, the UK’s largest and busiest port, went on strike for the first time in 30 years. Unite the Union, a British and Irish trade union, stated that its members had rejected an offer for a pay increase of 7% from Felixstowe Dock & Railway because it was not keeping pace with inflation. Royal Mail workers also went on strike to demand better pay in light of high rates of inflation. This public discontent also extended to lawyers as well as National Health Service staff. The Royal College of Nursing and Unite the Union announced strike ballots to prepare for action to increase their salaries as well.

3. Dealing with climate change: Climate change is another urgent threat for the new prime minister. Many areas of the UK have faced drought in recent months because of a significant spike in temperatures, which exceeded 40 degrees Celsius last July for the first time in the country’s history. According to the BBC, the UK has also experienced the driest six months this year since 1976. Climate change exerts pressure on the government through exacerbating the domestic energy crisis and negatively affecting infrastructure. The various economic, health, and social repercussions of climate change also ramp up public pressure on the government.

4. Internal divisions in the Conservative Party: Truss is also tasked with uniting the Conservative Party, which has faced deep internal divisions among its members for over three years under Johnson’s government. This came to a head in 2019 following a series of scandals that plagued the former prime minister, in addition to a series of ministerial resignations that prevented Johnson from continuing in office.

5. Increasing pressure from the opposition: The Labor Party seeks to exploit the instability within the Conservative Party by attacking Truss even before she assumes her new position through undermining public confidence in the new prime minister. Labor leader Sir Keir Starmer stated that Truss is "not on the side of working people," citing the prime minister’s comments about cutting corporate taxes without addressing increased costs of living. According to Starmer, this reflects Truss’s apathy towards the needs of the most vulnerable sectors of society.

Foreign Affairs

Besides domestic challenges, Liz Truss faces various major foreign policy challenges, including the following:

1. Managing relations with the EU: Truss has promised to renegotiate the Brexit deal that was ratified under the previous prime minister. Until she can fulfill this promise, Truss will have to deal with the realities of the UK’s withdrawal from the EU. During her tenure as foreign secretary, Truss attempted to accelerate plans to amend the Northern Ireland Protocol Bill, which would undo part of Johnson’s Brexit deal. This is currently one of the most contentious issues between London and Brussels since it deals with customs regulations for EU goods entering the UK via Northern Ireland.

The UK has also been dealing with the fallout from failed negotiations with the EU on this issue. The amended bill is seen as the main avenue by which Truss could address this in the future. She will also have to deal with Brexit provisions concerning repealing all EU laws that are still in force in the UK by 2023.

2. Ongoing asylum crisis: The UK government has been struggling for years to reduce the number of migrants crossing into Britain on small boats. The latest estimates indicate that the number of asylum seekers arriving in Britain by sea reached 60,000 this year, which is double the number recorded last year. The government outlined plans in April to cut down on the influx of migrants by sending those arriving on its shores to Rwanda, where their asylum applications would be examined further. In June, the first deportation flight of refugees was blocked following an order by the European Court of Human Rights. Truss has discussed expanding this policy by sending asylum seekers to other countries, and hinted that the UK might withdraw from the European Court of Human Rights if the latter continues to block this policy.

3. Mechanisms for dealing with the Ukrainian crisis: It is expected that Truss will have to face serious fallout from the Ukrainian crisis. Russian President Vladimir Putin has threatened to "freeze" Europe by cutting off natural gas supplies to the entire continent.

The UK is one of the largest suppliers of military equipment to Ukraine. It has sent nearly 7,000 anti-tank missile batteries and hundreds of armored fighting vehicles. In addition, UK forces are training Ukrainian soldiers. Truss has promised to continue the UK’s military and economic support for Ukraine, noting that under her government, London will remain a stalwart ally to Ukraine.

4. The UK’s presence in the Indo-Pacific and confronting China: Over the past years, the UK has tried to consolidate its presence in strategic regions such as the Indo-Pacific. It seems that Liz Truss is trying to establish a presence in this region. Last August, while she was foreign secretary, Truss summoned the UK ambassador to China following a visit by US House Speaker Nancy Pelosi to Taiwan. Truss explained at the time that she had summoned the ambassador because of "increasingly aggressive behavior and rhetoric from Beijing in recent months, which threaten peace and stability in the region." Moreover, during her prime ministerial campaign, Truss promised to deal with China’s actions in Xinjiang as genocide.

However, the UK’s role in the Indo-Pacific could run up against some obstacles, and Truss might soften her hardline stance against China. Some observers believe that she will find it difficult to maintain cooperation with ASEAN countries for various reasons including the UK’s tendency to focus on issues closer to home instead. Given domestic challenges and Truss’s likely short term in office, she might focus on quick gains in the Indo-Pacific region to boost her popularity rather than pursuing an more involved foreign policy in that region.

A Recipe for Success?

Liz Truss’s ability to deal with foreign and domestic challenges is linked to a number of key factors, including the following:

1. Ability to gradually deliver on promised reforms: One of the main reasons that Truss became popular with the British public was her promises to reduce taxes as well as her decision to stay out of internal party dynamics that led to Johnson’s resignation. In contrast, Sunak’s statements raised concerns about whether he might wait to cut taxes after addressing inflation rates. Some party members were also reluctant to support Sunak because of his involvement, along with Sajid Javid, in Johnson’s resignation.

Adopting a new economic policy could antagonize large swathes of conservatives, who will feel that Truss only made promises to win the elections and that her policy is not actually any different from Sunak’s. Gradually introducing economic reforms could be the most productive path towards resolving challenges and keeping Truss in office, even if these reforms might cost the public more in the long run. However, implementing reforms depends on the British people’s willingness to accept them and any repercussions they could bring.

2. Reaching a compromise with the labor movement: The UK has experienced greater social discontent and the increased number of strikes and demonstrations in key institutions was a key driver behind the resignation of Boris Johnson. Truss’s success therefore hinges upon her ability to reach an agreement with these sectors. After winning the election, Truss announced a bold plan to reduce taxes and develop the economy, and said that she would address the energy crisis by taking care of energy bills and addressing long-term energy supply challenges.

3. The balance of power in the Conservative Party: Truss’s ascent to the position of prime minister is expected to cause an internal reshuffle and the emergence of new faces in government. This reshuffle could spark domestic upheaval in the UK and create obstacles for Truss.

It is too early to say whether this will happen, but the new balance of power has already begun to take shape. Ben Elliott, co-chairman of the Conservative Party and one of Johnson’s biggest supporters, submitted his resignation immediately after Truss’s victory was announced. Meanwhile, Dominic Raab, deputy prime minister and minister of justice in Johnson’s cabinet, announced that he would not continue in these roles in the Truss government. The formation of the new cabinet is still underway.

4. Moscow’s reaction to Truss’s victory: There is no doubt that Moscow’s reaction to the new prime minister and its potential policy changes towards more flexible stances will have a significant impact on Truss’s success in dealing with foreign policy issues and mitigating domestic economic struggles. Kremlin Spokesman Dmitry Peskov said that relations with London could deteriorate further during Truss’s tenure, although it is difficult to imagine relations becoming worse than they already are. At the same time, some analysts believe that Truss will be a "gift" to Moscow. She was previously criticized on several occasions for her lack of general knowledge as foreign secretary and Russia could employing this weakness in its counter-propaganda against European leaders.

In sum, Truss’s victory in becoming prime minister marks the beginning of a new phase going forward—at the national level and not only within the Conservative Party. UK voters, especially conservatives, are not ready to endure another disappointment that would undermine their confidence in the party altogether. This state of affairs will shape the general elections in 2025 and perhaps beyond, depending on Truss’s performance.