As you know, I misspent much of the past 20 years trying to understand and report on the excesses of the City of London that led to the banking crisis and everything that followed. There were two hedge fund managers who made a bundle out of the rise and fall: Chris Hohn and Patrick Degorce. I mention them because the new Chancellor, Rishi Sunak, worked with and for both of them.
The reason this matters is that Hohn and Degorce were so focused, relentless and masters of detail that they make Dominic Cummings seem like a soft dilettante. It is little wonder therefore that Sunak is thriving in what feels to me like the hedge-fund culture that has taken hold at the centre of government since Boris Johnson and Cummings took over.
This does not mean Sunak will be Cummings’s marionette, even with the creation of the new joint Downing Street/Treasury economic policy unit – whose members will be chosen by Cummings and Sunak, with none relying exclusively on Sunak’s patronage.
But it absolutely does mean Downing Street, the Cabinet Office and the Treasury will act more-or-less as a seamless unit, and the centre of government will be more powerful than at any time probably since the Second World War.
More fool any minister who dares to gainsay the troika of Cummings, Gove and Sunak, with Johnson floating zen-like above.
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With the sackings of Smith, Leadsom and Cox, and the resignation of Javid, Johnson demonstrated more than any modern PM that the reward of dissent is exile to the salt mines of the backbenches. Collective cabinet responsibility now means not a frank discussion between equals, with PM primus inter pares, but the Prime Minister’s way or the highway. The Cabinet is the politburo for execution of the supreme leader’s ordinance to level up the midlands and north, or else.
The problem is that few ministers have much of a clue, absent debate, how on earth they are going to narrow the opportunity, income and wealth gap between north and south. It remains a worthy ambition without a practical plan.
As for the status and integrity of the Treasury, it will survive this storm, as it has survived many before. The Treasury has a collective memory and a mission – to stop the UK going bust – lacked by any other arm of government. It also, perhaps surprisingly, still contains many talented and dedicated officials.
But Javid’s departure means that fiscal rules designed to make sure the Exchequer has the resources to cope with the next economic shock have been downgraded from the framework into which all spending and tax policy must fit into a heuristic, a rule of thumb.
All fiscal rules have from time immemorial been honoured in the breach. But those written into the Tories’ election manifesto – already vague because there was no target date for hitting balance on current spending (though the assumption was that it was a rolling three-year target) – will now be gamed by the political hedge fund that central government has become.
Johnson and Cummings are hellbent on turning their decisive election victory into economic and political boom, before the bust that they know can never be escaped.
Robert Peston is ITV’s political editor. This article originally appeared on his ITV news blog