Is Rishi Sunak facing the axe? The Sunday Times reports this evening that Boris Johnson threatened to sack his chancellor this week during a meeting with No. 10 aides. After a letter Sunak wrote to the Prime Minister arguing for an easing of travel restrictions made its way into last week's paper, Johnson was left in a rage as to who was behind the leak. In the Monday call, on realising that Sunak was absent, he is alleged to have said:
'I’ve been thinking about it. Maybe it’s time we looked at Rishi as the next secretary of state for health. He could potentially do a very good job there.’
No-one in No. 10 is denying that Johnson said this. However, some play down the severity of the comments – suggesting it was a joke rather than a plan of action. Yet even if it was meant as a light-hearted comment, the very fact the Prime Minister suggested Sunak could be demoted in a reshuffle points to trouble ahead. For weeks No. 10 and No. 11 have been trying to downplay reports of tension between the pair on spending and beyond. Despite Sunak allies insisting tonight that the Chancellor remains focused on the economy, that will now prove near impossible.
So, what's gone wrong? While the Prime Minister and Chancellor remain closely aligned on several issues including the easing of Covid restrictions, there a number of factors that have led to a strained relationship. First, the departure of Dominic Cummings and the Vote Leave team and arrival of new Downing Street aides has changed the power dynamic within No. 10 and led to distance between the two sides. The fact that Cummings regularly praises Sunak in public appearances while criticising Johnson hasn't helped matters.
Meanwhile, Sunak's popularity as Johnson's approval ratings fall is exacerbating tensions. The latest Opinium poll shows Johnson’s personal approval rating is at its lowest level since he became prime minister. So it was unfortunate timing for the Chancellor that as the row over who leaked the travel letter broke out, new ConservativeHome polling put Sunak above Johnson in its Cabinet league table and on top as the favourite among Tory members to be the next party leader. While Johnson insisted this week he was pleased to see so many of his ministers ranked above him in popularity, that claim hasn't washed with everyone. As a former colleague of the Prime Minister said to me: 'He [Boris] won’t like his approval ratings dropping when Rishi’s are sky high.'
But the most serious issue is a difference of opinion on spending that will cause tension for months to come. Sunak plans to use the spending review to push for a return to fiscal discipline while Johnson is on the hunt for a big — potentially costly — domestic narrative for his post-Covid legacy. The Prime Minister has a natural instinct to spend but Sunak is growing increasingly concerned about inflation. It doesn't help Sunak in winning the argument that several of his Cabinet colleagues are more relaxed than him about borrowing to fund the Covid recovery.
Is Sunak facing demotion? It would be a bold move of Johnson to lose a second chancellor this early on into his premiership. But the very fact these comments have been leaked by figures in No. 10 means that speculation over potential successors will only grow. Already International Trade Secretary Liz Truss is being talked up for the role though it's worth noting that if Sunak went to the Department of Health, it would leave former chancellor Sajid Javid free to return to the Treasury.
Given the earliest a reshuffle is expected now is the autumn, the most immediate consequence of this leak relates to No. 10 rather than Sunak. The Prime Minister has had a difficult few weeks which have seen his approval ratings drop and complaints aired over how No. 10 is being led – with senior Tories citing a lack of grip. The fact there has been a leak from a No. 10 meeting in which the Prime Minister lost his temper will only add to these concerns.