Meet the new Chancellor: Sajid Javid

Sajid Javid
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With BoJo ensconced as prime minister, attention has turned to the cabinet picks charged with getting the UK back on track after a period of extensive political tumult. Of particular interest to AccountingWEB members, of course, is the newly appointed chancellor.

Well, that’s that then: the era of ‘Spreadsheet Phil’ is now completely over. Hammond, a remainer and anti-Johnson dissident, had already made way before Theresa May’s resignation. We now have his replacement: Sajid Javid, a two-times failed contender for Tory leader and former home secretary, has been handed the keys to number 11.

Javid took to Twitter -- as modern politicians are wont to do -- to thank his new boss for the opportunity:

Born in Rochdale, Lancashire to Pakistani immigrant parents, Javid has traced a more uncommon path to highest rungs of Westminster. He attended state comprehensive in Bristol before studying politics and economics at Exeter University. It was in Exeter where he joined the Conservative Party.

Upon concluding his studies, Javid embarked on a career in investment banking, working for Chase Manhattan Bank and then Deutsche Bank. He enjoyed a rapid ascent up the ranks, becoming a senior managing director at Deutsche Bank by the age of 40. He left his career in 2009 to pursue a career in politics. 

As a politician, Javid can be hard to classify: a long-time Eurosceptic who voted Remain, he said, “with a heavy heart”; a Thatcher devotee charged with loosening the purse strings to fulfil Johnson’s vision of “better education, better infrastructure, more police, fantastic full-fibre broadband sprouting in every household”.

Throughout his leadership bid, Javid’s rhetoric was conciliatory rather inflammatory, but with a firm line on the necessity of delivering an EU exit. “We must get on and deliver Brexit,” Javid said in the video announcing his leadership bid, but he added, it was important to “restore trust, bring unity, and create new opportunities across the UK”.

It’s from this latest leadership bid where we can possibly glean the most detail of Javid’s policy agenda. He has already said he wouldn’t oppose a no-deal Brexit and signalled an intention to prepare an "emergency Budget" including tax cuts to foam the runway.

Indeed, tax cuts seem to be rather high on the new chancellor’s to-do list. During his leadership bid, Javid said he wanted to cut the basic rate, and even told the press he’d consider scrapping the top rate of income tax altogether.

Another centrepiece of his leadership bid was a “£100bn National Infrastructure Fund”. “Taking advantage of some of the lowest interest rates in centuries to invest in projects which will create jobs and ensure the British economy is fit for the future,” Javid explained. “This fund would be based outside London, with a core aim of rebalancing our economy.”

In his new position in Johnson’s cabinet, Javid’s days as a political chameleon are likely numbered. The new prime minister has assembled a partisan core group to deliver Brexit come hell-or-high water. Over the next few months, Javid might find his aspirations of a united Britain dashed as a febrile political environment begins to grip.

But at least he is optimistic. In the speech announcing his leadership bid, Javid said he is “used to people trying to tell me what I can’t do”.

“I’ve always been more interested in what I can do. I know what I can do. And I’m optimistic and determined about what we can do, together, as a party to break through the barriers that people say can’t be broken to heal the divisions that people say can’t be healed and to make post-Brexit Britain the success that so many naysayers insist it can never be.”

Johnson’s cabinet also includes two representatives from the accounting profession. Step forward Liz Truss and Alok Sharma.

Qualified management accountant Truss takes the international trade secretary post. She’s joined in the cabinet by her fellow accountant alumnus and now the new secretary of state for international development Alok Sharma, who qualified with Deloitte.  

About Francois Badenhorst

Francois

I'm AccountingWEB's business editor. Feel free to get in touch with comments, tips, scoops or irreverent banter. 

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25th Jul 2019 16:58

As an ex investment banker he should be familiar with the long historic and legitimate use of EBTs* and all the rest of it and so should hopefully know how unfair & unjust the 2019 loan charge is and abolish it (retrospectively of course) possibly except for large bank staff etc. (so he is not accused of any bias etc.).

*So hopefully he should be less amenable than his predecessor to being hoodwinked by HMRC on all that.

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to Justin Bryant
25th Jul 2019 19:04

But the 2019 loan charge has nothing to do with the legitimate use of EBTs.

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to Wilson Philips
25th Jul 2019 20:02

Those were my thoughts. Loans that will never be repaid are certainly pushing the limits of ‘legitimate use of EBTs’.

I don’t think the government will have much time for anything other than brexit, with just 98 days to go, which includes their summer break....

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to Wilson Philips
26th Jul 2019 10:16

You are as easily hoodwinked it seems. Show me a pre-Rangers SC EBT loan court case that the taxpayer lost (apart from CoS Rangers of course) and I will then agree 100% with you. The fact is there are none and on the contrary the taxpayer won every one of them.

Also and in any event Rangers is very distinguishable on its (bad) facts as has been stated here very many times before.

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to Justin Bryant
26th Jul 2019 18:36

No-one said that cases had to be settled in court let alone the Supreme Court. A client did come to me with what proved to be a failed (pre-Rangers) EBT.

Trying to circumvent an income tax charge on earnings through the use of loans that would never be repaid is not, in my view, a legitimate use of EBTs. You may have a different opinion - let’s leave it at that.

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26th Jul 2019 10:02

Let's hope for substantial increases in government spending and borrowing and the banishment of "austerity".

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to davidwinch
26th Jul 2019 12:31

But Labour spent & borrowed beyond the country's means which caused the need for austerity (AKA responsible fiscal policy) in the 1st place. What I find objectionable, especially after a decade of "we're all in it together" austerity budget cuts etc., is the proposal that borrowing is now used to fund tax cuts for pretty high earners (who will no doubt promptly spend the extra money on gas guzzling, planet polluting 4x4s to keep up with the Jones).

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to davidwinch
26th Jul 2019 11:07

davidwinch wrote:

Let's hope for substantial increases in government spending and borrowing and the banishment of "austerity".

It looks increasingly like QE4ever.

Gresham's Law has been totally forgotten, despite all these 'Thatcherite' protestations from the powers that ought not be...

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By Locutus
to davidwinch
26th Jul 2019 13:19

davidwinch wrote:

Let's hope for substantial increases in government spending and borrowing and the banishment of "austerity".

Although many individuals and government departments were hit, did the country as a whole ever really have "austerity"?

Public spending continued to rise and government debt as a percentage of GDP has more than doubled in the past 11 years.

But I suspect you will get your wish.

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to Locutus
26th Jul 2019 15:58

The Public Spending may have increased as a whole but is how that is distributed that hurt.

In the North East many local authorities were hit and just stopped providing services, there is barely a library or swimming pool left in LA ownership.

We have had a very stagnant 10 years up North, I am just preying that this Brexit doesn't go [***] up as another 10 years of the same will have ruined the best earning years in my lifetime.

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By ColA
26th Jul 2019 11:11

If there is a god, I would implore it/her/him to help us, as getting sense from any Government of the last decade has been a fraught mission.
Had Theresa May and her Cabinet engaged in the most basic business tactic of preparing a plan for leaving the EU UK Ltd might not have been in such a mess, but then the Cameron/Osborne duo never contemplated a Plan B either.
Fine words from Javid but background of him and his cohorts do not inspire.

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to ColA
26th Jul 2019 11:41

Nigel Farage does a daily LBC broadcast from Brussels or somewhere at 6pm. I have no liking for the man but watched it yesterday and I must confess it was a pretty accurate analysis of what's going on at the moment re Boris copying Trump etc. That strategy may be a bit too clever for the UK though, as unlike Americans* most Brits can easily see through it and no doubt the EU will too.

*There are exceptions of course. See:
https://www.rollonfriday.com/news-content/exclusive-allen-overy-merger-t...

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26th Jul 2019 12:01

Perhaps he may clock onto the proven facts that lower taxes boost the economy and deliver higher tax receipts long term - boosting the economy is vital making a success of brexit, lets just hope the remoaners can put their EU obsession aside and let him get on with it rather than shooting everyone in the foot and propelling Corby and his marxist loonies into government by accident

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By raju m
26th Jul 2019 12:24

It can only be done by the politicians.

One day you can be home secretary, the next the Chancellor
and in a years time Prime minister if you can convince others. master of all trades??????????

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26th Jul 2019 13:12

Maybe he will abolish retrospectively S24 of the finance act 2015 and return landlords to a stasis where they get charged on actual profit they make.

A tax on turnover as this is could spread widly if it is not repealed

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