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19 February 2020

Boris Johnson may end up defined by his Henry VIII-style search for the perfect chancellor

Contrary to public perception, Rishi Sunak is not Johnson’s second choice for chancellor, but his third.

By Stephen Bush

Although he has been an MP for only five years, Rishi Sunak has managed to embody the dream of not one but two Conservative leaderships. Under David Cameron, Sunak seemed almost purpose-built for the party Cameron wanted to create. Here was a politician whose biography – Winchester, a first in PPE at Oxford, a glittering postgraduate career at Stanford University – would have made him a dream appointment to any Conservative cabinet. The only difference is that he is a product of Britain’s growing Asian middle class. Under Cameron, the party’s mission – the task that would secure its future as a governing project – was to win the votes of the prosperous, no matter what their skin colour or their private creed.

But Sunak contained within him the spark that would bring the Cameron era to an abrupt end: he is a committed Brexiteer. Sunak’s success in 2016 was Cameron’s demise – as the former PM now recognises, he failed to grasp the strength of Tory Euroscepticism. Boris Johnson’s Conservatives have a different project – to retain and deepen their electoral hold on the ex-industrial towns that decisively switched from Labour to Tory in December 2019. Sunak, installed as Chancellor of the Exchequer after Sajid Javid resigned during Johnson’s cabinet reshuffle on 13 February, now carries Tory political hopes on his back in a very different way.

Javid quit not because of disagreements over policy but over personnel – after Johnson insisted that he must sack his special advisers in order to create a joint team between 10 and 11 Downing Street. Nonetheless, his exit has led to speculation that his successor will loosen the purse strings. While Javid did sign off generous spending pledges for the NHS, schools and the police, he also fought for and secured a commitment to reduce government debt over the course of the parliament. Coupled with Johnson’s promises not to increase income tax, national insurance or VAT, this meant that most departments were heading for what one minister described as a period of “eyewateringly tight” spending.

As chief secretary to the Treasury, Sunak’s main role was working with departments on their submissions to the Budget, where he wowed Treasury civil servants and ministerial teams with his grip on the brief and his clubability. “Considering that he is essentially telling them ‘Fuck off, we haven’t got any money’, it’s very impressive that he manages to make them leave feeling like they’ve had a good meeting,” one Treasury official observed to me at the time. Sunak enjoyed the challenge, and before the reshuffle had told his civil servants and Downing Street that his preference was to remain at the Treasury as chief secretary to see the Budget through, rather than being promoted to head a department of his own.

Sunak’s ascendancy has raised the hopes of what you might call the Johnsonians – Conservative MPs and thinkers who want a greater level of ambition in public spending in order to consolidate their recent electoral gains. But just as Sunak’s pro-Brexit beliefs made him an imperfect vessel for Cameroon aspirations, his appointment may have raised false hope among spendthrift Tories. Civil servants like Sunak for the same reasons they liked Javid: he is personable, polite and immersed in his brief. Officials were heartened to learn that in addition to his ministerial papers, Sunak has been busying himself reading the latest economic theory about how governments might tackle a period of economic recession with interest rates at record lows. (Usually in a downturn, central banks lower rates to ease economic pressures – but with rates near to zero anyway, that lever will be unavailable next time.)

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Like Javid, Sunak is fiscally conservative, and a chancellor who worries about how to combat the next recession is not certain to approve unrestrained deficit spending. The biggest problem that Johnson has in achieving his agenda is that it is far from clear that his approach to spending is sustainable. That is part of the reason why his relationship with the Treasury has been so fraught. 

Contrary to public perception, Sunak is not Johnson’s second choice for chancellor, but his third. During his bid for the leadership, Liz Truss advised Johnson on economic policy, and was the architect of plans to cut taxes for people earning over £50,000. Civil servants dreaded a Johnson government because they found Truss’s tenure as chief secretary to the Treasury under Theresa May exhausting, for reasons ranging from her demanding work schedule to her habit of asking officials multiplication questions at random intervals. Few dispute that she would have been able to do the job effectively. But Johnson discarded her as his chancellor-designate in part because of the row the tax plans caused, and in part because Javid was more willing to spend freely.

In search of a working relationship like the one enjoyed by Cameron and George Osborne, Johnson has lost Javid and ended up with Sunak. The Cameron-Osborne duopoly delivered a great deal from a Conservative perspective, but it cannot be recreated through force. Whether it is at Budget time in March or later down the line, it seems near-certain that Johnson will once again find himself dissatisfied by his chancellor. 

The Prime Minister’s opponents have accused him, with his war on checks and balances, of emulating Henry VIII. But Henry was also notable for his inability to settle on a lord chancellor: he went through five, two of whom he charged with treason. Johnson may yet go down in history as the man who frittered away his office in a Henry-style search for the perfect chancellor, oblivious to the fact that the obstacle to a functioning marriage was not in his finance minister but in himself.

This article appears in the 19 Feb 2020 issue of the New Statesman, The age of pandemics