The attempt by Boris Johnson to emasculate the Treasury and seize control of economic policy is doomed to failure, people close to the former prime minister Gordon Brown have said.
Brown, who served as chancellor for a decade between 1997 and 2007 before a three-year stint at 10 Downing Street, is convinced the size and range of the Treasury will stifle the turf-war plans of Johnson and his chief adviser, Dominic Cummings.
“The Treasury will always be sufficiently powerful to make it impossible for No 10 to make decisions,” one source close to Brown said.
The source added that the Treasury would counter Johnson’s power grab by holding back information about the economy. “It’s all about information, not just to growth but also what’s happening to all aspects of public spending.”
Torsten Bell, a special adviser to Alistair Darling and now head of the Resolution Foundation thinktank, said it was wrong to see Sajid Javid’s departure as the end of the Treasury’s independence.
“It means the influence of the Treasury is weakened in the short term. But the Treasury likes Rishi Sunak and he will want to show them he is leading and not a small cog doing what Downing Street tells him”.
Bell said it was possible to envisage more joint policymaking but only if the chancellor wanted it and Downing Street did what it had failed to do with Javid and showed Sunak some respect. The most important issue was not how the Treasury and Downing St organised running of the economy, but the personal relationship between the prime minister and chancellor.
“Rishi is in a strong position because they can’t fire him. Dominic Cummings can’t afford to fall out with another chancellor because Boris Johnson can’t afford to get rid of him.”
Bell was a special adviser the last time there was serious tension between No 10 and the Treasury. Brown appointed Darling to succeed him as chancellor but then took the lead role in managing the financial crisis of 2007-09. Darling strongly resisted attempts to marginalise him and to force the Treasury’s hand.
A joint Cabinet Office-Treasury secretariat was set up to coordinate the bailout and part-nationalisation of the banks, and the international response to the crisis that culminated in the London meeting of the G20 in the spring of 2009.
One person familiar with that period said Brown brought in a lot of expertise into Downing Street – such as the former banker Shriti Vadera – to give him independent advice.
“During the financial crisis Brown ran things from No 10 and the Treasury wasn’t very happy,” the source said.
Brown was the longest-serving chancellor since the early 19th century and dominated domestic policy during his time at the Treasury, on issues such as introducing tax credits, opposing Britain’s membership of the European single currency, and raising national insurance contributions to pay for extra NHS spending.
But members of his team were surprised at quickly the Treasury moved on after he moved from 11 Downing Street to No 10. “The minute he left the Treasury was a vested interest in its own right again. What you have to understand is that the Treasury is not just the chancellor.”
Another source said Downing Street was simply too small to take on the Treasury, even if Johnson beefed up the capacity of No 10 with officials from the Cabinet Office. “In the long run No 10 and the Cabinet Office can’t have the same level of expertise the Treasury can muster with its much bigger staff.”
Although the dispute between No 10 and Javid centred on the spending and borrowing planned for next month’s budget, the Treasury was strongly opposed to a no-deal Brexit and is likely to caution against a trade deal with the EU that fails to protect Britain’s important financial services sector.
“In many respects Boris Johnson’s approach is in complete contradiction to what the Treasury has been saying for some time,” the source close to Brown said. “It may all look calm on the outside but it is chaos on the inside.”
