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13 February 2020

Sajid Javid’s resignation is the end of an era in British politics

The chancellor’s exit is the prelude to the biggest change in how the British state runs itself since devolution – but it may be brief.  

By Stephen Bush

Sajid Javid has resigned as chancellor of the exchequer after being told that he could retain his position but that his special advisers would be replaced and absorbed into a joint Downing Street team.

It is, in terms of the governance of the United Kingdom, probably the most significant development since the creation of the devolved parliaments in 1999. Rishi Sunak, Javid’s replacement, is reported to have accepted the merger of staff across numbers 10 and 11 Downing Street.

It’s an illustration of British politics’ “unipolar moment”: as I wrote last week, Boris Johnson is more powerful now than any British prime minister. He is using his position to concentrate power within Downing Street in a way we have not seen before. It’s not just that Javid has left post, but that the Treasury’s dominance over the rest of Whitehall may have left with him. The era of the imperial Treasury may be over for good.

How will it work out? From a political perspective, the Conservatives will surely benefit from what will be an unprecedented degree of alignment and coherence between the head of government and the government’s finance chief. But from a policy perspective, the consequences are unknowable. This is a structure that, had it been in Tony Blair’s hands in 1997, might have seen the United Kingdom join the euro or, in John Major’s hands in 1992, might well have prolonged the UK’s stay in the Exchange Rate Mechanism. It may well free Johnson from the fiscal straitjacket that he hopped into in the election, when thanks to Javid he committed not only to large increases in public spending but also to keeping national insurance, value added tax and income tax flat or falling – all while reducing the UK’s debt-to-GDP ratio.

However, the empire could yet strike back. As I wrote a few weeks back, many think that there are just a handful of people in the parliamentary party capable of managing the job of being chancellor: Sajid Javid, Liz Truss, Greg Clark, Matt Hancock and Rishi Sunak. Johnson has just parted ways with Javid, his economic instincts mean that he could not easily accommodate the economically dry Liz Truss, his Brexit position makes it impossible for him to appoint Greg Clark and now he has appointed Sunak. The lack of credible and realistic alternatives means that Sunak starts his time in office in a more powerful position than one might suppose. The Treasury might yet stage a counter-revolution.

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