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Liz Truss: No more sticking plasters to fix the energy crisis

The Telegraph logo The Telegraph 03/09/2022 Edward Malnick, Will Hazell
Writing for The Telegraph, Liz Truss pledges to set out ‘immediate action on energy bills and energy supply’ - HANNAH MCKAY © HANNAH MCKAY Writing for The Telegraph, Liz Truss pledges to set out ‘immediate action on energy bills and energy supply’ - HANNAH MCKAY

Liz Truss will declare on Sunday that she will do away with “sticking plasters and kicking the can down the road” in order to fix Britain’s energy market and reinvigorate the economy.

Writing in The Sunday Telegraph, Ms Truss, who is considered highly likely to be announced as the next Conservative leader on Monday, says she will take a "two-fold" approach: unveiling immediate financial support for households and businesses while also trying to solve the deep-rooted problems exposed by the huge impacts of Covid and the war in Ukraine.

Writing for The Telegraph, Ms Truss pledges to set out “immediate action on energy bills and energy supply” in her first week in office, as a prelude to a budget that would take place later this month.

Ms Truss writes: “We need to take the difficult decisions to ensure we are not in this position every autumn and winter. Sticking plasters and kicking the can down the road will not do.”

While aides insisted that plans for reform were yet to be finalised, Ms Truss’s pledge to avoid relying on temporary solutions to the problem of soaring energy prices suggests that the Foreign Secretary is preparing for an overhaul of the market.

Both Boris Johnson and Kwasi Kwarteng, who is expected to become Ms Truss’s chancellor, have suggested that changes are needed to the current situation in which domestic electricity bills rise in accordance with the “vagaries of the global gas price”.

Ms Truss also reveals that she will set up a “council of economic advisers”, comprising “a team of world-class economists, so my chancellor and I have the best ideas and latest research on how to get the economy moving”.

The move will be seen as an early signal of intent after Ms Truss repeatedly insisted that she would fight the “Treasury orthodoxy” that she says has led to tax rises and an acceptance of excessive monetary supply.

Gerard Lyons, an influential economist who advised Mr Johnson as mayor of London, is said to be in line for a role on the panel.

In a separate article for The Telegraph, he backs the idea of a cap on the wholesale price of gas produced in the UK, as he said the new prime minister’s first task would be to “tackle energy prices head on”.

“The dislocation in energy prices is now such that it makes sense for the Government to step in and protect people and firms by fixing wholesale energy prices,” Mr Lyons writes. “This takes the pressure off.

“It will also allow the Government to focus on guaranteeing future supply. It is a simple measure and it can be executed in a way that keeps the cost to the Government down.

“Such a move would remove uncertainty and be positive for business and consumer confidence.”

Experts said that the move could require primary legislation to override existing contracts with electricity generators – and that action would need to be taken to disincentivise firms from simply exporting energy at existing prices rather than selling at lower rates to UK firms.

This weekend, Ms Truss was finalising plans for a Cabinet reshuffle, which is expected to sideline Rishi Sunak’s most vocal supporters.

Key allies of the Foreign Secretary are in line for plum posts, in addition to the expected appointments of Mr Kwarteng as chancellor, Suella Braverman as home secretary and Ben Wallace as defence secretary.

Liz Truss is expected to name Kwasi Kwarteng to the key post of Chancellor - Getty Images Europe © Provided by The Telegraph Liz Truss is expected to name Kwasi Kwarteng to the key post of Chancellor - Getty Images Europe

Wendy Morton, a transport minister, is thought likely to become chief whip and Nadhim Zahawi is being lined up to run the Cabinet Office, while Brandon Lewis, the former Northern Ireland secretary, is expected to become justice secretary.

Rishi Sunak’s team is said to have carried out considerably less work on constructing a ministerial team, given his position significantly behind his rival in the polls.

But an ally of the former chancellor said supporters of Mr Sunak were “genuinely sceptical” of polls showing Ms Truss far ahead of her rival, insisting that he still had “a very slim chance” of a shock win.

Allies of Mr Sunak said he must be “treated properly” by Ms Truss if she becomes prime minister and not sent into exile for years on the backbenches. “She can’t behave like Boris did in 2019,” said one ally. “She didn’t get [support from] that many MPs – it’s a different environment to when Boris won. She can’t act like a terrorist.”

But the Foreign Secretary’s team believe Mr Sunak effectively ruled himself out of a government post when he said: “One thing I have reflected on a bit being in government and cabinet [is] you really need to agree on the big things because it’s tough, I found, if you don’t.

“I wouldn’t want to get into a situation like that again.”

In an interview with The Telegraph, Dominic Raab, a supporter of Mr Sunak who is expected to lose his post as Justice Secretary, admits he has a “50/50” chance of losing his now-marginal Surrey seat at the next election – but insists he will not take up a seat in the House of Lords.

Also writing in The Telegraph, Sir Keir Starmer, the Labour leader, gives an indication of his likely line of attack at the new leader’s first Prime Minister’s Questions on Wednesday, stating: “There is no sign that either Rishi Sunak or Liz Truss have grasped the scale of what is facing us, let alone possesses the answers to it.”

He adds: “The centre is not holding. Things, it feels, are falling apart.”

In her article, Ms Truss pledges to “take on whatever holds us back”, stating: “The fallout from the pandemic and Putin’s war has been an exceptional shock to our economy, and has exposed longstanding problems.

“We must do things differently to get the country back on track and get through these difficult times, which is why I stood to be our next prime minister.”

She adds: “I will take decisive action to ensure families and businesses can get through this winter and the next.

“If elected, I plan within the first week of my new administration to set out our immediate action on energy bills and energy supply. A fiscal event would follow later this month from my chancellor, with a broader package of action on the economy.”

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