Liz Truss announced as UK's next Prime Minister amid cost-of-living crisis

Liz Truss was on Monday announced as the UK's next prime minister, after winning an internal leadership contest of the ruling Conservative party.

The foreign secretary beat her rival, former finance minister Rishi Sunak, by 81,326 votes to 60,399, after a summer-long internal contest sparked by Boris Johnson's resignation in July.

She will be formally appointed as Britain's Prime Minister on Tuesday.

I am honoured to be elected Leader of the Conservative Party.

Thank you for putting your trust in me to lead and deliver for our great country.

I will take bold action to get all of us through these tough times, grow our economy, and unleash the United Kingdom’s potential. pic.twitter.com/xCGGTJzjqb

— Liz for Leader (@trussliz) September 5, 2022

One of her biggest and most urgent challenges is to manage a cost-of-living crisis for millions across the country with energy bills projected to skyrocket over the winter. 

A spokesperson for her campaign did not directly comment on her plan but said: "Liz understands the scale of the challenge facing all of us this winter, and knows people are worried about how they are going to pay the bills.

"As prime minister she will take immediate and decisive action to help people and businesses with their energy costs."

Truss is considering a freeze on household energy bills to counter the crisis, according to a source.

Public borrowing would be used to fund the gap between current prices and an 80% rise in the amount suppliers can charge customers from October under the plan prepared by government officials, the source told Reuters.

The cost of the move, which will last until at least January, would eclipse the 70 billion pound ($80 billion) bill for the COVID-19 furlough scheme, but the government had decided it needed to act, the source familiar with the situation said.

The first act of Liz Truss’ premiership should be taking immediate action to tackle the cost of living crisis that is pushing millions into poverty — this must be a wealth tax and bringing energy companies, water, mail and rail into public ownership.

— Jeremy Corbyn (@jeremycorbyn) September 5, 2022

The cost is likely to be recovered by a levy on bills payable over 10-15 years, said the source, who declined to be named because the plans are still under consideration.

Energy suppliers and the opposition Labour Party have called for a freeze on gas and electricity bills. The average bill is due to jump to 3,549 pounds next month, and further major hikes are forecast next year.

Europe's energy price crisis worsened after Russia's Gazprom on Friday said flows through its major Nord Stream pipeline to Germany would remain shut indefinitely.

Although Britain only receives around 4% of its gas from Russia, the squeeze in supply means less could be available from other suppliers such as Norway.

Wholesale British gas prices, which help to determine regulator Ofgem's price cap level, mirrored huge gains in Europe’s gas market on Monday morning, with the day-ahead contract up 133%.