Sajid Javid: Chancellor quits Boris Johnson’s cabinet and is replaced with Rishi Sunak in reshuffle

Chancellor dramatically walks out after a bust-up with Dominic Cummings over a demand for him to sack his advisers

Chancellor Sajid Javid has sensationally walked out of Boris Johnson’s cabinet in protest at a Dominic Cummings-driven power grab to give 10 Downing Street greater control over the Treasury.

Mr Javid’s dramatic resignation threw what was intended to be a relatively modest reshuffle into disarray, and cast doubt over the date of the all-important Budget, which had been due to take place in just 27 days’ time on 11 March.

But there were suspicions that No 10 was prepared for the move, as Treasury chief secretary Rishi Sunak was summoned within minutes to be promoted to his old boss’s job.

Mr Sunak indicated that he was ready to accept Mr Cummings’ demand that the chancellor should lose his independent team of special advisers at the Treasury and instead rely on a “joint economic unit” of advisers under No 10’s control.

In an apparent swipe at his successor’s compliance, Mr Javid said that these were conditions that no “self-respecting” minister would accept.

And in his resignation letter, the former chancellor made a series of barely concealed warnings over the growing power wielded by Mr Cummings as the PM’s most senior adviser.

Cautioning Mr Johnson that he would continue to need the “clear and candid advice” that he had offered as chancellor, Mr Javid added: “I also believe that it is important as leaders to have trusted teams that reflect the character and integrity that you wish to be associated with.”

In a sign of concern over the potential for No 10 to overrule the Treasury, he urged the PM to allow his former department to retain “as much credibility as possible” under the new arrangements and to play a “central role in driving the economic agenda”.

Sources close to the chancellor said that Mr Johnson assured Mr Javid that he wanted him to stay on at the Treasury and believed him to be the “best person for the job” before laying down the demand that he replace all his advisers.

His walkout made him the shortest-lived chancellor in 50 years and meant he left office without ever having delivered a Budget, having seen his planned statement in the autumn cancelled because of the election.

The rivalry with Mr Johnson’s aide dates back to the sacking last year of one of the chancellor’s closest advisers, who was frogmarched out of Downing Street at Mr Cummings’ orders.

Mr Cummings was not in Thursday’s meeting, but it is understood he had clashed with Mr Javid over the chancellor’s commitment to balance the current budget in the next three years, which denied Mr Johnson leeway for tax giveaways at the election and risked leaving the government with a £10bn black hole.

No 10 was also still thought to be fuming over last week’s leak of the chancellor’s support for the HS2 rail line, which was seen as an attempt to seize glory for the multibillion-pound project days ahead of Mr Johnson’s public confirmation that he was giving it the green light.

Downing Street would not say whether Mr Johnson regarded the government as committed to Mr Javid’s fiscal rules, saying only that they had featured in the 2019 manifesto.

The PM’s spokesperson also declined to confirm that the Budget would go ahead on 11 March.

Asked if the date could be moved, the spokesperson said: “Extensive preparations have already been carried out for the Budget and they will continue at pace.”

He insisted that the Budget would be written, as normal, by the chancellor and his Treasury officials.

But it was made clear that they will receive political input from the new joint advisers team for 10 and 11 Downing Street, who are to be appointed over the coming days.

A No 10 source played down fears that this might cause tensions at the top of government, insisting there was “not a cigarette paper” between Mr Johnson and his new chancellor.

The pound tumbled briefly following Mr Javid’s resignation, but rallied strongly as traders apparently calculated that a stronger No 10 grip on the Budget process increased the likelihood of a spending splurge.

At 39, Mr Sunak is the second youngest chancellor in more than a century, following George Osborne, who was 38 when he entered No 11 in 2010.

But after just five years in parliament, he does not wield anything like the clout of Mr Osborne, who was a recognised part of a tightly-knit power duo with David Cameron, leading some observers to suggest he would be “chancellor in name only”.

Shadow chancellor John McDonnell said: “This must be a historical record with the government in crisis after just over two months in power.

“Dominic Cummings has clearly won the battle to take absolute control of the Treasury and install his stooge as chancellor.”

Former permanent secretary Lord Macpherson, who was the Treasury’s most senior civil servant for 11 years under chancellors Gordon Brown, Alistair Darling and George Osborne, warned that an imbalance of power in favour of No 10 risked reducing its effectiveness as a brake on profligate initiatives.

Quoting Keynes’ description of the Treasury as “an essential bulwark against overwhelming wickedness”, he said: “Prime ministers who seek to weaken it generally end up regretting it.”

And he said Mr Johnson had made Mr Sunak virtually unsackable: “As Ken Clarke used to say, no PM can afford to sack two chancellors. The position of Mr Javid’s successor will be stronger as a result.”