Promising dramatic spending hikes, Boris Johnson has moved the Conservative Party to the left. But while the prime minister is still basking in the success of having finally guided Britain out of the European Union, not everyone is happy about his spending plans.
Evincing as much, Johnson lost the most powerful member of his Cabinet on Thursday, when Chancellor of Exchequer Sajid Javid resigned. Javid said he could not accept Johnson’s demand to replace his senior advisers with No. 10 Downing Street approved advisers. But that’s just the paper excuse. What’s really going on here is Johnson’s effort to ensure he has near total control over where the government budget is spent. This is an important point in the United Kingdom, in that chancellors have traditionally held significant sway over government allocations.
So what’s the deeper detail?
Well, Johnson’s plan is to use the March 11 budget to spend more on public services. Having won a significant parliamentary majority in December 2019 elections, Johnson wants to consolidate his newly strengthened position in formerly Labour Party held seats. And Johnson’s chief strategist, Dominic Cummings, has decided that the best way to do so is to increase health and infrastructure spending in those areas. The government is also expected to announce minimum wage hikes and more generous provisions for elderly care.
However, for Javid these are sensitive concerns.
A self-made millionaire on the Conservative Party’s economic right, Javid has always been reluctant to break the bank to feed Johnson’s ambitions. For one, the government deficit remains stubbornly high, with government borrowing in the range of $50 billion a year, and the debt-to-GDP ratio standing at approximately 84%. That doesn’t give much spending wiggle room, especially in the context of government pledges not to raise most taxes.
But Javid’s concerns run deeper than that.
The departed chancellor knows that improving the livelihoods and prospects of those living in impoverished areas won’t ultimately be achieved by borrowing and spending more money. The key is to improve access to quality education, technical skills training, and to attract companies to invest.
Johnson knew this. Hence why he wanted to cripple Javid’s independence by removing his advisers. In that sense, these two sides were structurally unable to come together any longer.
Javid has now been replaced by Rishi Sunak, who has been a senior minister for just seven months.
