(Bloomberg) — Kwasi Kwarteng is in advanced talks over who would be in his Treasury team in anticipation that Liz Truss will become UK prime minister next week and name the business secretary as her Chancellor of the Exchequer.
Truss, the foreign secretary, has held a consistently wide lead over her rival Rishi Sunak in polling of Conservative members ahead of the party’s announcement of the winner on Monday. Her long-term ally Kwarteng is seen as a shoo-in to be the new chancellor, according to people familiar with Truss’s thinking. The two are considering replacing experienced Treasury Permanent Secretary Tom Scholar, one person familiar said.
The UK is facing brutal economic headwinds amid soaring inflation, a looming recession predicted by the Bank of England and an unprecedented squeeze on living standards. That makes the shape of Truss’s cabinet and the composition of the Treasury crucial to the management of the economy, which has been the biggest source of disagreement between her and Sunak during a bitter weeks-long leadership contest.
The signs are that she’ll push on with her campaign promise to break from the “economic orthodoxy” that she has repeatedly said isn’t working for Britain. One ally said that the suggestion that a veteran like Scholar — the most senior civil servant in the Treasury — could be moved shows she is serious about her campaign rhetoric. They said the move could occur either immediately after Truss takes office or following the winter crisis.
Wallace, Cleverly, Braverman
A government official countered Truss’s team might conclude they need such a seasoned mandarin as they prepare to tackle a brutal cost-of-living crisis with energy costs spiraling out of control and strikes breaking out across the economy.
Truss held talks with her inner circle this week about the appointments she plans to make to her cabinet if she does become prime minister. The winner will be announced on Monday, and take power the next day.
Defence Secretary Ben Wallace is likely to stay in post and Education Secretary James Cleverly — a former Foreign Office minister — could be promoted to Foreign Secretary, according to the people. Work and Pensions Secretary Therese Coffey, another of Truss’s top supporters, will take a more senior cabinet jobs.
Right-wing former leadership candidate Suella Braverman, the attorney-general, has held advanced talks about a major promotion to home secretary, the people said. Fellow Brexiteer Jacob Rees-Mogg is tipped to be business secretary, another significant promotion that would see him play a crucial role during the energy crisis.
It is likely that four other leadership candidates, Kemi Badenoch, Penny Mordaunt, Nadhim Zahawi and Tom Tugendhat, will be handed senior ministerial roles, the people said. Mark Fullbrook, who is expected to be No. 10 chief of staff, briefly ran the Zahawi and Mordaunt leadership campaigns and is said to have been integral to those appointments.
Truss’s allies tip four of her early supporters, Simon Clarke, Chloe Smith, Ranil Jayawardena and Wendy Morton, for prominent positions in the new government. In an attempt to repair some bridges following an acrimonious leadership campaign, there could also be a return to ministerial office for Sunak backer Robert Jenrick, who refrained from launching personal attacks on Truss during the contest.
Other ministers from the Boris Johnson administration who are touted to remain in government jobs include Scotland Secretary Alister Jack, Trade Secretary Anne-Marie Trevelyan and Cabinet Office Minister Michael Ellis. Former Brexit Minister David Frost has been in talks about a role, though that remains up in the air.
A Truss ally stressed that no decisions on Cabinet appointments are final.
A senior team stuffed with Truss’s closest allies means a number of the most senior Tory politicians could be banished to the back benches. Sunak supporters such as Dominic Raab, Michael Gove and Oliver Dowden are tipped to leave government.
Those departing may also include a number of Johnson-era veterans such as Home Secretary Priti Patel, who is seen as having failed to stop migrant channel crossings, and Transport Secretary Grant Shapps. Culture Secretary Nadine Dorries has been offered the chance to stay in her job, but may reject it, according to a person familiar.