Liz Truss faces a political and economic baptism of fire this week with warnings of massive bankruptcies across the economy – even as the new Prime Minister prepares to lead the nation in a minute’s silence on Sunday night to honor the Queen’s legacy.
Ahead of the Queen’s funeral at Westminster Abbey on Monday and her burial at St George’s Chapel in Windsor Castle, Truss will appear on the steps of No 10 on Sunday evening at 8 p.m. as part of a final ‘moment of National Reflection on the Monarch’s Life and Legacy.
Downing Street hopes people will participate at home and on their doorstep across the UK. Sailors, soldiers and crews of the armed forces stationed overseas will also take a break, including on ships and on bases, in what government officials believe could become a global event.
But with the period of national mourning ending after the funeral, when Truss flies to New York to attend the UN general assembly, and with MPs returning to Westminster on Wednesday or Thursday, the return to the Normal politics will be sudden and potentially deadly for a Prime Minister who had only been in office for two days before the Queen’s death.
On Saturday night, Britain’s main business organizations renewed the pressure on ministers for ‘absolute clarity’ on what help the government would offer them with their energy bills and warning them of the dire consequences if they continue to be left in limbo on the support level in the middle. term.
New Business Secretary Jacob Rees-Mogg will make an announcement on business support on Wednesday which will be followed by a mini-budget by new Chancellor Kwasi Kwarteng on Friday.
UK Chambers of Commerce chief executive Shevaun Haviland said Truss’ previous announcement that businesses would get a cap on bills similar to that for home users, for six months – made hours before the news of the queen’s death being made public 10 days ago – had been very well received.
But she insisted that more details were now urgently needed if many businesses were not to cut back on operations and some even close due to an inability to plan ahead.
“That cap will be good for business,” Haviland said. “But now we need to know two things: one, how big is this? Then, very quickly, we’re going to have to look at what’s going to happen after six months. »
She said many businesses had seen their energy costs rise by 300% or more compared to last year, adding to a list of issues that left many wondering about their future.
“I had several companies tell me it was worse than Covid. Rise in raw materials, soaring costs including wages, inflation at 10% and now energy prices. They don’t know where to turn. In May, 23% of our businesses said they would have to reduce production or cease operations. It will have grown a lot since then. The government has to get on with it. »
Emma McClarkin, chief executive of the British Beer & Pub Association, said: “Pubs and brewers won’t be able to wait days, let alone months, for clarity on their energy bills. Businesses are now deciding whether they will be able to overwinter. It’s no exaggeration to say that the impact of this energy crisis could be worse than the pandemic in terms of permanent shutdowns.
“We urgently need full clarity from the government on whether this cap will help pubs and brewers out of a crisis that has been developing for months. We urge the Chancellor to think seriously about the immediate reassurance he can give to the thousands of business owners who are currently in despair.
Kwarteng is due to unveil a huge package on Friday including details of the energy price cap and £30billion in tax cuts – including the reversal of the National Insurance hike in April – as promised during of the Conservative leadership election.
Tory MPs are already worried that Friday’s event, which is also expected to include the scrapping of a cap on bankers’ bonuses, could provide an “open target for work” in Truss’s first weeks as prime minister.
Keir Starmer’s party is determined to underscore the contrast between what it will portray as tax cuts for the rich and its policy of paying for an energy price cap freeze for those who have the most needed by taxing the excess profits of energy companies. The £13billion-a-year cut to National Insurance also helps wealthier households more than poorer families.
Economists say one of the main challenges for Truss will be to prevent international money markets from losing confidence as Britain’s struggling economy enters its worst period since the 1970s, when oil shocks forced the Treasury into the arms of the International Monetary Fund.
With inflation hitting 30-year highs and the pound falling to 37-year lows, a bet on City tax cuts and deregulation may spook markets and leaves the Treasury struggling to cope with a flurry of business. closures and millions of homes in fuel poverty.
Forecasts for the economy now show it will contract in the second half of this year and all of next year, although the extent of the slowdown is unclear following the injection of £150billion into the economy via the government’s new £2,500 energy price cap.
The gloomy outlook should not deter the Bank of England from raising its base interest rate by 1.75% this week.
Meanwhile, mourners will be advised today not to queue for the readiness as it is approaching full capacity. Tens of thousands of people have marched past the Queen’s coffin at Westminster Hall since Wednesday evening, with the writ due to end at 6.30am Monday before the funeral.
Access to the queue should be closed hours in advance so that as many people as possible who are already in the queue can pay their respects.