Boris Johnson may be about to learn that economic consequences can’t be wished away, regardless of whom Treasury advisors report to.

Sajid Javid has quit the government after Boris Johnson demanded that he fire his advisors if he wanted to stay in post. Rishi Sunak will become Chancellor, sharing a team of advisors with 10 Downing Street.

The Prime Minister is said to desire a political and organisational relationship akin to the one enjoyed by David Cameron and George Osborne. As far as effective Downing Street-Treasury combos go, theirs was best in class, regardless of what one thinks about what it delivered.

But the relationship between the two was only partially about organisational fusion (which, thanks to the demands of coalition, never went as far as the two planned before the 2010 election). It was also the result of the strong personal relationship between the two. I think Daniel Finkelstein is right to say that there is a hard limit to what you can achieve in terms of the Downing Street-Treasury relationship through organisational fixes alone.

In terms of personnel, while this is headline news, it’s not yet clear how big a development it is as far as policy is concerned. It’s a big change in terms of how we’re governed – it might not necessarily mean a big longterm change in terms of what government does.

While many Treasury officials have been left stunned by the events of the last 24 hours, the main reason for their surprise is not that the most powerful Prime Minister in recent times is seeking greater control over the Budget, but that Sajid Javid decided to walk out.

But now the dust is settling, many are left asking: what, exactly, has changed? Yesterday they had a congenial well-qualified Chancellor who believed that, with interest rates set to …read more

Source:: New Statesman


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