I suspect Mr Javid has probably crossed No.10 off his Valentine’s card list this week.
So was it a mistake or a piece of bold action by Boris and No.10 to implement the kind of Britain they want and to remove obstacles? Realistically only time will tell (and yes I am sitting on the fence a bit but read on).
Of more importance to the financial services sector is what it will mean for pensions, investment and regulation as we prepare ourselves for a Budget on 11 March (which some believe may be delayed, by the way).
The first thing to say is that while there were questions about Mr Javid’s brief performance as Chancellor, it is - overall - an extraordinary blunder by No.10. Your Chancellor quitting just weeks before his big day is just terrible timing and Boris may come to regret it.
All credit to Mr Javid for sticking to his principles and backing his team.
Shock as Sunak replaces Javid as Chancellor
My own reading of the signals is that there was tension between the Treasury and No10 and wrangling over the Budget was an obvious issue.
It’s not unlikely Mr Javid wanted a cautious approach (as all Chancellors do), some extra spending but easy on any tax cuts. Mr Johnson may have wanted a bigger spending approach - an obvious Brexit dividend if you like.
Reports that Mr Javid was planning to cut back pension tax relief for high earners could well have been seen as a bad idea by No.10 given the negative reaction from the industry. We’ll have to wait until 11 March to find out.
In the meantime, I believe as far as pensions are concerned it will be steady as you go. The DWP was untouched in terms of ministerial changes in the reshuffle (I was amused to see some senior ministers Tweeting they were “thrilled” to have kept their jobs. Mmm…).
More importantly, there’s a Pensions Bill going through Parliament and a Pensions Dashboard to implement. All big set pieces and a change of horses is not wise at the moment. So far so good except…
The move to unseat a Chancellor so soon into his tenure is almost unprecedented. Tension between No.10. and the Treasury is a long-running feature of British government but that’s a given. The rancour between Gordon Brown and Tony Blair was legendary. But it’s just not a smart idea to lose a Chancellor.
I do not pretend to be an expert on this but the generally accepted and guiding principle is that No.10 is ‘big picture’ on finances and leaves the Treasury to find the money and hand out the tax breaks. It seems to work. That’s changed with No.10 seemingly firmly in control.
The door of No.10 famously has a brass plate stating ‘First Lord of the Treasury’ - one of the incumbent Prime Minister’s titles. Most people have seen this as an historic novelty. It looks like Mr Johnson has taken this title literally.
I wish new Chancellor Rishi Sunak all the best in his new role. He will need to work hard to prove he is not just Second Lord of the Treasury.
Kevin O’Donnell is editor of Financial Planning Today and a financial journalist with 30 years experience. This topical comment on the Financial Planning news appears most weeks.