Bombay Durpun - UK's new PM meets cabinet with economic package in prep

In her first contacts with foreign leaders, the new Conservative leader spoke late Tuesday by phone to Ukraine's Volodymyr Zelensky and then US President Joe Biden.

Before facing her first session of Prime Minister's Questions in parliament later Wednesday, Truss met her senior ministers to tackle the most pressing question at home: soaring energy prices.

The cabinet includes the most diverse top team in British history: Kwasi Kwarteng as finance minister, James Cleverly as foreign secretary and Suella Braverman as interior minister.

Truss and Kwarteng are preparing measures reportedly worth upwards of £130 billion ($150 billion) to freeze energy bills for households and businesses, many of whom risk going to the wall this winter.

She must also navigate the combustible issue of post-Brexit trading arrangements in Northern Ireland. According to Downing Street, she agreed with Biden "on the importance of protecting" peace there.

In her call to Zelensky, Truss vowed to maintain the full-throated support for Ukraine against Russia given by her scandal-tainted predecessor, Boris Johnson.

Truss was bullish about the economic outlook as she entered Downing Street for the first time as premier on Tuesday, narrowly avoiding a heavy downpour.

"I am confident that together we can ride out the storm," she said.

Therese Coffey, newly appointed as deputy prime minister and health minister, said Truss recognised the need to "hit the ground running".

Tax cuts are also on the agenda, despite the risk of stoking double-digit inflation which is running at 40-year highs.

"I will cut taxes to reward hard work and boost business-led growth and investment," Truss promised, while also vowing "action this week" on gas and electricity bills and broader energy policy.

- 'Imbecile' -

After the cabinet, Truss headed to the House of Commons to spar with opposition Labour leader Keir Starmer.

The often-rowdy weekly session, which sees the prime minister quizzed by MPs, will test Truss's political mettle and shaky rhetorical skills, as well as her level of Conservative support.

The 47-year-old won an internal ballot of Tory members on Monday, securing 57 percent of the vote, after a gruelling contest against former finance minister Rishi Sunak that began in July.

But the initial stage of the contest saw her net the support of less than a third of the parliamentary party.

She now faces a tough challenge reuniting the ruling Tories following a bitter leadership battle, but observers noted that she had expelled almost every Sunak supporter from the cabinet.

Ex-soldier Johnny Mercer said he was "disappointed" to be sacked as veterans affairs minister.

His wife Felicity Cornelius-Mercer went further, calling Truss an "imbecile" as she tweeted a picture mocking the new prime minister as a dim-witted character from "The Muppets".

Conservative MPs are "almost ungovernable" and have "no appetite to cope with difficult decisions", one government insider told the Financial Times.

"They did for Boris, and they may do for Liz, too," the source told the paper.

Labour has opened up a double-digit lead in the polls but may have to wait two years for the next general election.

Truss vowed Monday to lead the Conservatives to victory "in 2024", with an election due by January 2025 at the latest.

- 'Dreadful policy' -

She pitched herself to the Tory grassroots as a tax-cutting free-trade champion ready to slash taxes immediately to turbo-charge growth.

Under her mooted plans, gas and electricity bills for both households and businesses would be capped near current levels for the coming winter at least.

The government would lend or guarantee private sector loans to energy providers to make up the difference they pay with soaring global wholesale prices.

Paul Johnson, of the respected Institute for Fiscal Studies think-tank, said it was "a dreadful policy" but likely necessary.

R.Kohli--BD