What to expect from Sajid Javid
Life-long Thatcherite to oversee increase in borrowing and surge in public spending
Against the backdrop of a possible no-deal Brexit, Britain’s new chancellor faces a stern test holding the government’s purse strings as he looks to reconcile his own free-market instincts with plans to increase borrowing and splurge on public spending.
The son of a Pakistani-born bus driver, Sajid Javid is described by Politico’s Jack Blanchard as having “fought his way up from the toughest streets in England to earn £3-million-a-year at Deutsche Bank... (He is) so pro-market he once described ticket touts as ‘classic entrepreneurs’”.
Blanchard also notes he “stood back while the UK’s largest steelworks went bust” and “went on holiday while Tory MPs revolted over business rates”.
Yet he is nevertheless seen as “a safe pair of hands who stirs few emotions among colleagues in the governing Conservative Party” says Reuters.
The Sun reports “as the first from an ethnic minority background to make it to the position of Chancellor, his experience working his way to the top is likely to feature highly in Number 11”.
“No other UK chancellor has grown up being taunted with racist names, or hearing his parents’ stories of how they arrived here with a pound in their pocket and a determination to work hard”, says the BBC, “although it is not yet clear how - or whether - those experiences will translate into policies, once he has his feet under the desk at Number 11 Downing Street”.
An insight into his economic thinking came during his campaign for the Tory leadership, when he announced he was willing to scrap the top 45p rate of income tax entirely in a bid to inject more “dynamism” into the economy.
In an interview with The Daily Telegraph, he argued that income tax cuts can pay for themselves, highlighting increased tax revenues in the wake of George Osborne’s decision to scrap the 50p rate of income tax.
Although a life-long Thatcherite, the Tory MP Rob Halfon has said Javid is no longer simply a red-blooded believer in free markets, but also “in the need to build up social capital too”.
Having previously advocated a £100bn infrastructure fund and £50bn for housing, financed by higher borrowing, as well as a programme to recruit 20,000 police officers, Javid “is expected to oversee an expansion of public spending in an attempt to prepare the economy for the turbulence of Brexit” says the Financial Times.
“His appointment is set to herald a significant fiscal loosening” says the paper, with the new Eurosceptic prime minister “refusing to give a commitment to continuing with his predecessor’s policy of keeping the UK’s debt falling as a share of national income”.
As well as finding ways to relax austerity, Reuters reports Javid “will have to manage the economy at a time when it could be abruptly wrenched out of the European Union, pick the next Bank of England Governor and protect London’s position as one of the world’s top two finance centres”.
He is “the ideal chancellor for creating the magic money trees we were told we were told didn’t exist” says James Moore in The Independent, adding he “will need Dumbledore on his side to fund the eye-popping tax and spending pledges Boris Johnson has made while at the same time proposing to crater the economy”
“Failing that, a conjuring trick or two might well be necessary to keep hold of the No 11 flat. People who cut their teeth in the casino capitalist world of investment banking have proven to be rather good at the creation of mirages. Javid is an alumnus of Deutsche Bank, whose bosses infamously recently got fitted for fancy suits while sacking loads of people. There’s a metaphor there.”