ECONOMY

Boris Johnson’s fear of Rishi Sunak is a serious danger for the Tories

Conservative Party UK updates

Sometimes the little moments illuminate. The summer spat between Boris Johnson and his chancellor Rishi Sunak was a piffling affair which told a bigger tale. Sunak, the widely acknowledged heir apparent, had let it be known that he was pushing Downing Street for an easing of Covid travel restrictions, setting out his views in a letter which was duly leaked. Johnson retaliated by commenting to enough colleagues to ensure it made the news, that perhaps it was time to demote his chancellor. 

Johnson’s musing was not serious, but nor was it entirely frivolous. It was a warning shot, a reminder that no one is unsackable. Ordinarily, this would be seen as the flotsam and jetsam of politics. But within Number 10 the incident was viewed with alarm as an ambitious chancellor on manoeuvres. 

Nor has Downing Street failed to spot the barely-hidden scorn Treasury insiders show for a prime minister who they mock as minded to say yes to every spending plan. To quote one Sunak ally: “We have an increasingly professional and politically confident chancellor and a cabinet that knows our credibility is shot through if we don’t do things properly.” 

Tension between chancellors and prime ministers is a staple of politics. A confident premier can manage the friction. But as the sheen of his vaccine success wears off, the mercurial Johnson has become more wary of his genial, hard-working, details-focused chancellor. 

The divisions are also about to be far more exposed. The pandemic suppressed economic splits. Now, amid hopes that the worst is past, battles loom, made more fierce by the unprecedented peacetime borrowing. 

There has been some good news in that borrowing figures for the first four months of this year are well below forecasts, but these are still huge numbers, £78bn instead of £104bn. And inflation is a growing concern, especially if current labour shortages and wage increases mean the rise is not as transitory as the Bank of England hopes.

Some retrenchment is already scheduled. Sunak has announced tax rises due to pull in up to £26bn a year by 2025/26 and spending cuts of up to £17bn. 

And yet the government still faces powerful demands for extra spending. The NHS needs money to deal with the backlog caused by Covid. There is the cost of restoring lost school time. The long-promised solution to the crisis in social care is likely to mean a new tax badged as a health and social care levy but in reality a disguised increase in national insurance. Tackling the climate crisis requires funding commitments and a growing caucus of Tory MPs is already resistant to the green reckoning, especially where it leads to higher energy cost for consumers.

And there is a broader concern among the more fiscally hawkish Conservatives that their party is getting hooked on higher spending and higher taxes. The tax burden is now at 35 per cent — the highest since the late 1960s — and MPs are nervous of any more tax increases. Sunak, who is looking for more savings in the spending review, is now the face of those who fear they are losing the larger economic argument for a smaller state. 

And yet many Tory MPs fear restraint and are campaigning for exceptions, such as £6bn to make the £20-a-week crisis uplift to universal credit permanent. They see hope in the political instincts which tell Johnson voters will not tolerate renewed austerity, health service backlogs or higher personal taxation. 

But while Johnson enjoys support as an election winner, he has no faction behind him fighting for a higher spending vision. He will feel this even more keenly if he senses his chancellor seeking political advantage in being the voice of financial conservatism. He knows that Sunak is positioned where the party believes it wishes to be, always a savvy position for someone who aspires to lead it.

This is why Johnson’s fear of Sunak is so dangerous. Recent history is littered with such feuds and they rarely end well for either side or for the government.

The best bet for political success is for the two to work together, backing each other in the tough calls. What neither they nor the Conservatives need is for each spending battle to be viewed through the lens of a leadership contest in which each win is briefed as a victory for the Treasury or for Number 10.

Yet the summer spat shows the pair may not see their interests as aligned. Johnson has long believed in outrunning problems. Just as his strategy on Scottish independence is to stall, ideally for the duration of his premiership, his instincts on spending are longer deficit financing. Sunak, by contrast, would inherit those difficulties. He is not wrong to worry about the borrowing.

Ideally both men have now witnessed the danger and perhaps seen the need to pull back. Sunak has looked a little too presumptive about the succession, while Johnson needs to pay more attention to the reasons his MPs are thinking about it. They need each other. A failing chancellor normally heralds a failing government, while Sunak ’s prospects will suffer if he is left to shoulder the blame for unpopular decisions.

But personal politics and ambition is corrosive. Johnson’s mistrust of Sunak means manageable disputes could harden into paralysing conflict. The prime minister’s fear of his chancellor is now a worrying faultline under his government.

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Follow Robert Shrimsley with myFT and on Twitter



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