What’s really behind the tension between Boris Johnson and Rishi Sunak? It’s all about the money of course

The autumn spending review will be an important test for the prime minister and chancellor’s relationship

Boris Johnson, left, with Rishi Sunak (Getty Images)

Follow the money. It’s a good rule in politics, as well as crime. Ministers believe money lies at the root of the growing tension between Boris Johnson and Rishi Sunak which, despite Downing Street’s efforts to downplay them, are much more than a silly season story.

Whitehall insiders view them as the opening skirmishes in a fight between the prime minister and chancellor over the government-wide spending review this autumn. They think the crucial battle will be: can the government afford one more emergency spending boost for post-Covid catch-up (on schools, the NHS, the courts, transport) as Johnson desires, or should it start to restore order to the public finances and the Tories’ reputation for fiscal responsibility, as Sunak wants? The PM wants one for the road, while the chancellor wants to call time and thinks the government is in the last chance saloon, especially as rising interest rates will push up the cost of servicing the debt.

While post-pandemic catch-up will be a key theme of his review, Sunak faces many other pressures, among them social care reform, the cost of “net zero”, infrastructure and Johnson’s last opportunity to stop his “levelling up” agenda fizzling out. The chancellor’s allies suspect that in Johnson’s eyes, there will never be a good time to rein in spending. The next general election, expected in 2023, and manifesto pledges needed to head off Labour’s attack on “Tory austerity,” will soon provide another reason to put off the evil day. So the Treasury believes a line must be drawn now.

Some ministers normally in the Johnson camp agree. Like Sunak, they were appalled that Johnson blurted out a promise to provide a new yacht for the Royal Family that it doesn’t appear to want at a cost of up to £250m. One cabinet minister told me: “We knew nothing about it and now we have to clear up the mess and find the money. Rishi is right that we have to start to balance the books.”

Many Tory backbenchers agree. As one put it: “Rishi has the coherent agenda Boris lacks. With Boris, it’s ‘spend, spend, spend’ and worry about it tomorrow.” However, that does not stop those in the red wall demanding a bigger slice of the pie.

Dominic Cummings stirs the pot, saying the chancellor “will struggle to cut spending with BJ” at the helm. He tries to get under Johnson’s skin by never criticising Sunak – not even over his ill-fated “eat out to help out” scheme, even though he and the chancellor were in opposing camps on lockdown.

Sunak’s leaked letter calling for foreign travel restrictions to be eased – which intriguingly the Johnson camp says the PM never received – and Johnson’s half-joking threat to demote his chancellor reveal that relations between them have sunk to a dangerous new low. The leaks keep coming. We now know Johnson is furious his remark about downgrading Sunak to health secretary was leaked because his fury, inevitably, was leaked too.  No doubt the next leak will be that Johnson is furious that his fury about being furious that his remarks about demoting Sunak leaked.

Johnson and Sunak would be wise to acknowledge the danger signals. As previous occupants of 10 and 11 Downing Street learnt, chancellors possess the power to block prime ministers doing what they want by denying them the money, and prime ministers are less powerful than they look without the Treasury’s army of officials and a budget of their own.

A good working relationship between the government’s two most powerful figures requires personal chemistry as well as agreement on economic strategy and individual policies. The personal stuff is harder when the chancellor aspires to succeed the PM, as Sunak does despite professing otherwise. Ominously, Sunak allies argue that Johnson is not strong enough to lose another chancellor following Sajid Javid’s departure last year. Not necessarily true but revealing that some people are saying it – and, for good measure, that Sunak would go to the backbenches rather than accept a cabinet demotion.

Equally significant is talk among Johnson supporters that he will use his next cabinet reshuffle to promote ministers who will then rival Sunak as the heir apparent – a sign that Johnson is irked by his chancellor having better personal ratings than him amongst the public and Tory members.

When the pivotal PM-chancellor relationship goes sour – as it did between Margaret Thatcher and Nigel Lawson, Tony Blair and Gordon Brown – it destabilises the whole government. The success or failure of Johnson’s premiership will hinge on the relationship’s critical test this autumn.