Sajid Javid's budget delay only adds to the turmoil over Brexit

Richard Partington
Photograph: Adrian Dennis/AFP via Getty Images

It was supposed to be the event to end austerity. A budget to turn the page; to enact the “people’s priorities”, with everything to like and nothing to hate. But what should have been a pivotal moment for a country tired of austerity, Brexit and political chaos became another moment of shambles for Sajid Javid instead.

In yet another example of Brexit derailing the usual functioning of government, the chancellor confirmed he would scrap his set piece tax and spending event on 6 November. The launch of a hypothetical election trumped a hypothetical budget, to denude the country of vital clarity, spending detail and the commitments required to steady a rapidly weakening economy.

The speculation was that the decision was not Javid’s ownand that Boris Johnson’s most senior adviser, Dominic Cummings, had once again sidelined the chancellor.

Labour accused Cummings of forcing Javid’s hand. Javid denied this, saying he and Johnson together had made the call to cancel the 6 November statement. An election was more important, and the rest of cabinet agreed on Thursday morning. The chancellor’s claim was questionable given his reassurances less than 24 hours earlier that his budget plan was still on track.

Although strongly denied, Cummings has a track record. And the suggestion that Javid has yet again been overruled can only add to a developing political reputation as “chancellor in name only”.

All this could be dismissed as a row inside the Westminster bubble if it didn’t have such grave consequences at a dangerous moment for the country. Postponing the budget will mean no update on the economy and the public finances from the Office for Budget Responsibility, the government’s tax and spending watchdog. The suspicion is that the OBR report would have embarrassed Johnson before an election by confirming what is widely known: the economy is slowing and public borrowing are spiralling as the Brexit uncertainty holds the country back.

At a time when strong and stable leadership from the Treasury should be prized, the economy is being allowed to crumble. As one senior Westminster figure put it to me: “To have a chancellor that looks like a doormat really isn’t helpful for the country.”

There have always been conflicts between No 10 and No 11 Downing Street, famously so between Tony Blair and Gordon Brown. But it is hard to imagine that many former holders of the most senior cabinet post after the prime minister would stand for being labelled as only chancellor in name.

Brown was infamous for his rages – for hurling pens, staplers and mobile phones – a chancellor not to be trifled with. The idea he would let anyone scrap his budget speech would be for the birds.

Denis Healey, as chancellor under Harold Wilson in the 1970s, was a political giant with a bruising reputation, summed up by his quip: “It has never been my nature, I regret to admit to the house, to turn the other cheek.”

Javid follows a line of Conservative chancellors who were titans. Geoffrey Howe effectively ended the career of Margaret Thatcher with a devastating resignation speech upon leaving cabinet in 1990. George Osborne, as the architect of austerity, held massive sway over the shaping of the country under David Cameron.

For the sound management of the economy amid the Brexit turmoil, there is growing concern power is becoming increasingly centralised around No 10 at the expense of the chancellor and other high offices of state that would normally play a key role in running the country.

Earlier this month, the former head of the civil service Andrew Turnbull launched a stinging attack on unelected advisers such as Cummings, warning the power shift had damaged sound policymaking and needed reversing immediately.

The fears could easily be dismissed. The bogeyman special adviser has become a fixture of modern British punch-and-judy debate and is nothing new: Alastair Campbell and Damian McBride were notable precursors of the Cummings approach.

But to have a chancellor so clearly enfeebled in office at a pivotal moment is of increasing concern.

William Gladstone, who developed the Treasury into a powerhouse under his four terms as chancellor, said 1858 that the finance ministry was “the stomach of the country, from which all the other organs take their tone”.

In today’s terms, it would suggest the nation has a cataclysmic bellyache; writhing with cramp from the weakness at No 11.

The lack of leadership is astounding at a time when the economy is struggling with the uncertainty over Brexit. The Bank of England too, in charge of the monetary policy levers, has faced criticism for playing a minimal role. But with little ammunition left to stimulate growth – interest rates at historic lows – No 11 must do even more than in the past to rev up the engine of growth.

On the face of things, the day-to-day economy may not look too bad. Unemployment is at the lowest since the mid-1970s and inflation is under control. But this assessment belies deep structural problems.

Britain has extreme levels of inequality that led to the Brexit vote. Productivity has failed to return to its pre-financial crisis levels, damaging the prosperity of the country, while real wages are below where they were a decade ago.

These deep structural problems need addressing with proper planning, but the government is at war and distracted over Brexit. A bunch of quick fixes were used after the financial crisis to stop the last recession turning into a depression. But the recovery since has been one of the weakest in history and the sticking plasters still remain.

The budget would have presented an opportunity to tackle these issues. Delaying it has instead contributed to the current mess.

The chaotic Brexit process of the government’s own making has stripped it of its ability to run the country. Whether the call to scrap the budget was or was not his own, the chancellor in name only has missed a vital opportunity to turn the page.