Boris Takes Charge The British PM sacks his Chancellor. It’s his economy now.
https://www.wsj.com/articles/boris-takes-charge-11581621621?mod=opinion_lead_pos4
Boris Johnson doesn’t do things by halves, and his reshuffle of the U.K. cabinet on Thursday is a case in point. Having exiled Chancellor Sajid Javid, the Prime Minister now is solely responsible to voters for Britain’s economic performance after Brexit.
Mr. Javid jumped instead of being pushed, but Mr. Johnson won’t be unhappy. The two increasingly butted heads on economic and fiscal policy, and Mr. Javid also disagreed on many matters with Mr. Johnson’s senior adviser Dominic Cummings. The breaking point came Thursday when Mr. Johnson insisted that Mr. Javid fire most of his policy advisers and hand the economic reins to Mr. Johnson’s office. Mr. Javid couldn’t stay on as a matter of reputation and self-respect.
The new Chancellor, Rishi Sunak, has been a member of Parliament for fewer than five years and is a relative unknown on the public stage. This means Mr. Johnson is now effectively responsible for economic policy. It’s just as well. An oddity of British governance is the traditional division of responsibility between the prime minister and the chancellor, with chancellors wielding outsize power to chart their own course independent of their nominal political boss. Now voters will know exactly whom to credit or blame.
This may not be good for the economy. A strong disagreement between Mr. Javid and Messrs. Johnson and Cummings was Mr. Javid’s determination to maintain a semblance of fiscal balance and control debt amid spending demands. Investors seemingly didn’t know what to make of Mr. Javid’s departure, with the pound stronger against the dollar and euro but the stock market down on this and other bad corporate news. Mr. Johnson may soon miss Mr. Javid’s credibility with financial markets.
That’s not to say Mr. Javid is infallible. One of his errors was to resist Mr. Johnson’s tax-cutting pledges on grounds of fiscal balance, never mind the implications for economic growth. Another was his tolerance for white-elephant public works such as a ruinously expensive high-speed rail line, over which he encouraged Mr. Johnson’s bad instincts.
Mr. Johnson has the urgent task to build economic credibility with global investors and British voters post-Brexit. Some of his ideas are good (tax cuts) and others bad (high-speed rail). He’s now responsible for both.
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