Brexit and the waning days of the United Kingdom

[Sheilbh]

Interesting piece on the Sunak's growing grip over policy decisions. This isn't really surprising - I remember thinking amid the panic around Johnson/Cummings sacking Javid's aide that ultimately the Treasury has a couple of thousand civil servants, plus advisors and they make decisions about spending for every department. If it's a battle between the Treasury and No. 10 the Treasury will almost always win - the exception is if the PM is a bit of a micro-manager and has an infrastructure for monitoring whether their priorities are being delivered (Blair and Thatcher, for example), neither of which sounds like Johnson.

And, amid all the reshuffle rumours right now, the only big name I'm not seeing mentioned at all is Sunak - I imagine because his position with Tory MPs is too strong to move:

How Team Boris became Team Rishi
The British prime minister's ploy to keep the Treasury under his control has backfired.
By Annabelle Dickson and Esther Webber   
September 2, 2021 6:30 am

LONDON — The ghost of Dominic Cummings still lurks in Downing Street.

Nearly 10 months after Boris Johnson's controversial top aide walked out of No. 10, the team of top advisers assembled by Cummings is still in place. Only they're working for one of the British prime minister's most dangerous internal rivals: the chancellor of the exchequer, Rishi Sunak.

The so-called joint unit, a group of senior advisers handpicked by Cummings to work for both the prime minister and the chancellor, is one of the reasons Sunak has his job. His predecessor Sajid Javid dramatically quit after the team's installment in early 2020 was seen as consolidating power in the prime minister's office.

Instead, under Sunak, the tables have turned.

As Westminster returns from its summer break and a beleaguered Johnson — whose two-year tenure has been dominated by Brexit, the COVID-19 pandemic and a botched withdrawal from Afghanistan — struggles to drive policy from No. 10 Downing Street, the joint unit is strengthening Sunak's power base in the chancellor's office next door at No. 11, according to multiple current and former advisers familiar with the dynamic, all speaking on condition of anonymity because they were not authorized to speak on the record.

Far from having neutered the Treasury, the team — won over by Sunak — is empowering its rise ahead of an autumn full of potential clashes. A difficult review of departmental spending, a big and expensive pledge to reform social care, infrastructure promises and the latest funding settlement for the National Health Service are just some of the decisions looming this fall. A decision on health and social care funding could come as early as this week.

While staff on both sides insist personal relations between the prime minister and the chancellor are good, there's no denying that Johnson is headed into the second half of the year with a rival snapping at his heels.

"No.11 is definitely in the ascendancy, notable over last six months ... [their] operation has got their act together and moves 'as one,'" said a former adviser familiar with the dynamic.

In an apparent nod to Sunak's control of the team that is now joint in name only, Johnson has turned to civil servants to strengthen his grip on power. A new team of around 40 officials, who make up his new No. 10 delivery unit, have been tasked with pushing through the prime minister's priorities.

Even as the now disgruntled Cummings has been reduced to sniping at Johnson from the sidelines, the decisions he made while in office remain one of the prime minister's biggest headaches.

"There's no sense of anybody walking out of meetings or not engaging, but there is a tacit understanding that, for Boris, things are not going very well, for Rishi things are going very well," added a second former adviser. "That obviously makes things a bit tense at the moment."

Joint no more

Johnson is not the first prime minister to have trouble with his next-door neighbor. Former Prime Minister Tony Blair had a famously intense and well-documented rivalry with his long-serving and ambitious Chancellor Gordon Brown, who eventually became prime minister. The pair would have regular raging arguments which threatened to derail government policies.

Persistent battles between Johnson's immediate predecessor Theresa May and her Chancellor Philip Hammond over some of her spending plans also made it into the public domain.

At the time of the joint unit's formation, it was briefed that Johnson wanted to emulate the more collaborative relationship seen between former prime minister David Cameron and his chancellor George Osborne.

In a tweet in June, Cummings boasted he had "tricked" Johnson into losing Javid and hailed the "big success" of the "JOINT 10/11 team."

Last month Cummings tweeted one of the "most important dynamics" of the last nine months had been the "PM's destruction of unified 10/11 spad/official team." The joint unit had "greatly improved data sharing/management/performance," and Johnson's allowing it to fall under the control of the Treasury had broken the prime minister's grip of Whitehall, Cummings added.

And far from ensuring the two Whitehall departments are "singing from the same hymn sheet," as officials insisted it would at the time of Sunak's appointment, the joint unit has presided over a summer of briefing wars between No. 10 and No. 11 — whether by design or inexperience.

One member of the joint unit said they could only speak for Sunak, with No. 10 running its own briefing operation, underlining how separately the two now function.

The prime minister reportedly threatened to demote Sunak after a letter written by the chancellor calling for COVID-19 travel restrictions to be relaxed was leaked — a document the very existence of which advisers say points to tensions between the two men.

Letters written by ministers are usually written to be leaked, one former Treasury official said. When it all started to go wrong for May, "pretty much everyone was writing letters."

"Ministers would put their view in an official letter, and then that would get leaked, and it had nothing to do with day-to-day, but it was very obvious that this person was on maneuvers," they said. "They feel like they're not being heard by the PM, so they're using media as their way to make their voice heard and known."

That Sunak's letter was another example of the genre is a hypothesis that has found resonance in No. 10, according to a government official who works closely with the prime minister. The official noted the language used by the chancellor was particularly quotable and guaranteed to be a major news story which would paint him in a positive light with Tory MPs and the public.

It was astonishing that Sunak would put these words down in a formal letter to the prime minister rather than simply call or text him or discuss it in a meeting, a Whitehall official said.

A Treasury spokesperson said it was "normal Whitehall process" for Cabinet ministers to write letters to each other about policies and decision making.

"All special advisers across government are employed by and work at the pleasure of the prime minister. No 10 and No 11 work closely every single day," she added.

Empire building

No one epitomizes the growing self-confidence of the Treasury more than Liam Booth-Smith, the head of the joint unit.

A former housing policy expert, Booth-Smith joined the Ministry of Housing, Communities and Local Government in June 2018. Highly rated by Cummings, and the prime minister's former comms chief Lee Cain, according to his allies, Booth-Smith moved to No. 10 Downing Street as an adviser to Johnson, before taking up his current role in February 2020.

"Certainly Cummings and Cain rated him highly but it was because he would do what he was told," the former Treasury official quoted above said.

Booth-Smith now describes himself on the social networking site LinkedIn as a special adviser to the chancellor.

"He is completely and utterly Rishi," a former colleague said. "It was an inevitability [he would switch to backing Sunak] now his patron in Cummings has gone."

Booth-Smith "is not discreet about his dislike of the PM," according to the former colleague, who said they had experienced his disloyalty first hand. "He has no compunction to sarcastically say 'it is going splendidly in No.10.'"

Treasury officials rejected the claim when contacted directly by POLITICO.

It is not just within the government that the chancellor's growing confidence is attracting attention.

"We are seeing a chancellor really bedding into his role and expanding his influence both through sheer competency and the size of the policy machine at his disposal," one lobbyist who works closely with the Treasury said.

"A lot of it boils down to the fact that the Treasury and Sunak are much more focused and capable and less scattergun than No. 10, which means they grow their influence over other departments because they are able to get work done," the lobbyist added.

Two other lobbyists said their point of contact in No. 10, Alex Hickman also appeared to be increasingly doing things for the chancellor.

"Alex was Brexity, but now he seems more Treasury," one said. "During Covid, he was reaching out to people that Treasury would normally be owning."

The Treasury expanded its headcount by 400 between March 2020 and March 2021, according to Office for National Statistics figures. Sunak has also expanded his own team, bringing in advisers including the former civil servant James Nation — a figure one former colleague described as an "academic powerhouse" who could be a "future head of the policy" in No. 10 Downing Street.

Brand building

Many in Westminster, including Sunak's detractors, grudgingly accept the chancellor has done a stellar job of building his brand.

Recruiting Cass Horowitz — son of the author Anthony Horowitz and cofounder of the creative agency The Clerkenwell Brothers — is also seen as a masterstroke by many in Westminster.

Horowitz, who produced the social media content for ITV Political Editor Robert Peston's flagship show before joining Sunak, is credited with being behind the chancellor's slick Twitter and Instagram presence, as well as a high-quality video telling the story of Sunak's first year as chancellor, which has been viewed almost a million times since it was published in March.

Over the summer, a poll of Tory activists for the website Conservative Home asked who should succeed Johnson as party leader. Almost a third of them plumped for the chancellor. No other contender won more than 12 percent of the vote.

"It's uncomfortable for No. 10 that Rishi is so clearly gunning for it so early on," a second Whitehall official said. "The PM is only two years in, and normally they don't get these kinds of challenges until skirmishes towards the end."

The jostling for position has been made worse, some at the heart of government believe, by a sense of drift following months of crisis management necessitated by the pandemic.

As one Cabinet Office veteran put it: "We've run out, it's over. We're run into the ground, done, don't know where to begin. Which is really ironic considering we haven't delivered half of the fucking manifesto."

The veteran highlighted Johnson's supposed big speech in July about "leveling-up," a Johnson slogan aimed at communities in former Labour strongholds who feel they have been left behind. The sole substantive measure in the speech was a promise for more power for local officials, possibly through directly elected county mayors, but even that policy had been only roughly developed. It later emerged that the Cabinet Office emailed every department after the speech to ask for ideas on what the new mayors should do.

Those working in No. 11 insist there is still a good working relationship with the prime minister's office next door.

"The prime minister and chancellor have always enjoyed a very close and effective working relationship and will continue to do so," the Treasury spokesperson said. "They have been in lockstep throughout the most challenging period any government has faced since the Second World War, including on issues such as our unprecedented economic support and vaccine procurement."

Booth-Smith and Johnson's new chief of staff Dan Rosenfeld, a former Treasury official, often meet for breakfast and coffee and "talk things through in a very honest way," the second former adviser quoted above said.

And Sunak and his advisers often physically work from No. 11 Downing Street in offices neighboring the prime minister's team, rather than the Treasury a few doors down.

Johnson's solution

Even as Sunak continues his rise, Johnson is losing patience with a key group of advisers — his policy unit, according to two people familiar with the prime minister's thinking.

Johnson is increasingly frustrated with the culture-wars agenda pursued by Munira Mirza, a long-time ally who was deputy mayor for education and culture when he was mayor of London, according to a government official who works closely with the prime minister. Johnson has repeatedly overruled the policy unit when it advocated hardline positions, the official said, although a No. 10 official insisted the policy unit played a "vital role" in the way Downing Street works and in formulating cross-government policy.

Johnson's solution: to create a new tribe of advisers, the prime minister's delivery unit. The unit is run by director Emily Lawson, an official who was previously head of vaccine deployment for NHS England, who has a desk in No. 10 Downing Street, but the team is mainly based out of Admiralty House — a three-minute walk from No. 10.

The unit is notably dominated by career civil servants. Benedict Shillito, who describes himself as the senior delivery advisor for leveling up at No. 10 delivery unit on LinkedIn, was previously a civil servant in No. 10, DexEU and the Treasury.

Alice Matthews, who joined in July as deputy director for crime and justice, according to the social networking site, has spent the last nine years as an official in the Home Office.

The prime minister ordered the delivery unit's creation following a review of "government delivery" by Michael Barber, now a consultant who ran a similar outfit under Blair.

"One of the reasons it worked well for Blair was he was really closely personally involved," Rhys Clyne, a senior researcher at the Institute for Government, said. "He made sure the delivery unit spoke with his personal authority. If Johnson is looking for ways to strengthen his hand, making sure he delivers his agenda, including getting past the Treasury, this can be a way of doing that."

Blair's delivery unit structure was dismantled by Cameron — a decision he came to regret. The former prime minister later reflected in his autobiography that a PM needs such a unit "focused on the implementation of government policy," and he "reversed the decision over time."

A third Whitehall official, familiar with discussions about the unit said: "It's meant to be there to focus relentlessly on the prime minister's priorities, and the prime minister's priorities are meant to be cross-cutting issues, whatever they are, that require action from almost every single department around Whitehall."

"So, as part of that, it's there to poke other departments and ask what they are doing about issues, and in that sense, it will have interactions with the Treasury. But I don't think it's been set up specifically as a Treasury poking stick," the official added.

Some are skeptical about how effective the unit will be. "Not much power is concentrated in No. 10, you don't have any of the major policy levers, even if you have recommendations on how it can be done better," the former Treasury official quoted added.

Same old, same old

Allies close to both the prime minister and the chancellor insist the tensions between the two men are overblown.

"Rishi isn't trying to start any fights. He is so laid back. If he gets sacked he'll just go back to California," quipped a fourth Whitehall official who works closely with both No. 10 Downing Street and the Treasury.

"Occasionally Rishi will push to think things through and between them, they thrash it out. But it's always professional and very friendly," a Cabinet minister said. "The chancellor and the PM not getting on makes a great media story. But I don't see any of that. They often have a drink together as flat neighbors."

Others say tensions are just a return to the status quo.

"Anyone who is close with the PM gets frustrated with how the Treasury is operating," the former Treasury official quoted above said.  "The trust is never there between the two departments."

"I think the institutions will never overcome that. The Treasury takes its duty as guardian of the nation's finances really seriously, and No. 10 is less concerned about that. That will never go away regardless of whether you have best friends. The principle roles of the two are too different," they added.

For Johnson, the question is whether he ditches the last trace of Cummings and makes good on his summer threat to demote Sunak.

That all depends on whether he can get his premiership back on track — and if his delivery unit can seize back control.

Emilio Casalicchio and Matei Rosca contributed reporting.

Having said all that, lots of Tory MPs are coming out as very unhappy with the social care proposals - they either want it to only affect high earners (over £40k) or don't want an NI rise at all because it breaks a manifesto promise. But it's also rare that a policy gets united opposition from Labour, Tory backbenchers, trade unions, business organisations and more

Also apparently the Treasury want the tax rise to be spent on the NHS for three years to help catch-up with treatment missed/delayed during the pandemic and then move to using for paying social care. That is never going to happen. If that money goes to the NHS it will end up being needed to fund the NHS and they'll need to confront funding social care again in three years time.

It also seems to me all a bit arse about tit in that we're getting info and briefings about the possible funding solution for social care policy, rather than details about what the social care policy is and then thinking about how to fund it Hardly surprising given this government but still a bit of a problem

[Tamas]

Maybe (probably) they haven't worked out what to spend the increased funding on for social care. With the summer holiday season, their chums must still be in the process of setting up the appropriate business arrangements.

[Josquius]

On the one hand covid seems to be being brought under control which suggest the chance to replace Johnson there is nigh.
On the other with covid many people have yet to really notice quite how much brexit has fucked things. Might not be great to make a power move quite yet.

It also seems to me all a bit arse about tit in that we're getting info and briefings about the possible funding solution for social care policy, rather than details about what the social care policy is and then thinking about how to fund it Hardly surprising given this government but still a bit of a problem

You need to know how much money is available before you can start figuring out how much you can skim off for private enterprise. Then you figure out what they can reasonably be expected to do for that amount of money :p

[Sheilbh]

Social care is entirely private enterprise just with local authority cash/contracts. It's a hugely fragmented sector but there's basically lots and lots of providers who basically converted old B&Bs and guesthouses into social care facilities - so there's about 20,000 social care providers in the UK and most of them own at most one or two sites. It's one of the reasons the pressure to keep wages and costs low is so extreme - it's a bit like landlords/buy-to-let where people bought the property and run it on very low margins as a family business. It's not a million miles away from GPs surgeries in that way - private sector but generally (except for the very expensive high-end ones) most of it is state money/contracts.

I know that they were one of the big setors hit by banks selling inappropriate interest rate hedging products that was a big scandal after the financial crisis - but again the driver was the same: small family businesses looking for some form of cost certainty.

As I say my preference would be either inheritance tax to pay for it or social insurance - but in terms of model I think it's one of those sectors (possibly like landlords) that could do with a bit of professionalisation and larger operators.

[Josquius]

Its private in "". A lot of those private enterprises are non-profits. Which...isn't awful.
I can see the point against small operators of one or two sites but I also oppose large for-profit organisations getting mixed up in this. Its hard to think of many areas business less belongs.

On housing too I totally oppose large for-profit owners. Small-scale owners or non-profits only please. I'm all for setting up taxes to really screw over any large for-profit housing companies.

[Sheilbh]

A chunk of them are non-profits but the last stats from the National Audit Office is that over 75% are for-profit. The rest are a mix of non-profit and local authority/NHS facilities (I think the latter is for specialist dementia care mainly). I think the care homes are more for-profit and the care-at-home providers break more non-profit.

One of the big issues with that is that it is really like the buy-to-let market - the care homes as a business are often not very financially resilent and have very high debts. This is why, along with property developers and buy-to-let landlords, they were big buyers of interest rate hedging before 2007-8 and then suddenly exposed to costs that were way above market but they'd locked in.

[Tamas]

Its private in "". A lot of those private enterprises are non-profits. Which...isn't awful.
I can see the point against small operators of one or two sites but I also oppose large for-profit organisations getting mixed up in this. Its hard to think of many areas business less belongs.

On housing too I totally oppose large for-profit owners. Small-scale owners or non-profits only please. I'm all for setting up taxes to really screw over any large for-profit housing companies.

This is difficult. Sure, for non-profit sounds like it should work better but it is no guarantee to decent circumstances.

On properties  I disagree deeply. One of the reasons - I think- the government won't touch property prices except for pushing them ever upwards is that a massive (and increasing) number of people use buy-to-rent as their pension pots, essentially. Anything to make their investment no longer profitable, thus make them sell and open up the supply side would lose them a lot of votes.

There would be no such trouble if most of the for-rent properties were in hands of big private organisations. Sure, the Tories would still wouldn't want to make property prices decrease, but there would be no such painfully direct correlation between property prices and the calmness of the middle class.

[Sheilbh]

The big reason no-one wants to touch property prices is that 2/3s of properties in the UK are owner-occupied (down from 70% in the 2000s) and it's most people's biggest assets which they tap into over their life. And for the Tories property owners are far more likely to vote for them (though I imagine that is even more the case for multiple property owners ).

Buy-to-let is a thing but it's a thing for very few people - and a not insignificant proportion are overseas buyers (probably about 10%) who generally can't vote.

I don't have an issue with big companies as landlords - I think it is easier to regulate big companies and to give more rights to renters than if it's a million because they can bear the costs and wouldn't get any exemption for only having one or two properties. I think in Germany and Austria - which are both countries with a lot of renters and good renters' rights (comparatively - I'm sure it could be better) - the norm is big companies like Deutsche Wohnen, but I could be wrong.

[Tamas]

You guys keep talking like overseas buyers are such a big thing but I have had 4 landlords so far:

1. Big company
2. A teacher
3. A car showroom employee
4. Some English lady I haven't met due to the estate agency

[Sheilbh]

I think there people slightly over-egg the "overseas investor" point in London but my understanding is that there's about 200,000 overseas landlords (and about 2 million landlords overall) but those are estimates from when I was looking out of interest for the most landlord heavy constituency - I'm not sure but I think it might be Richmond Park where over 10,000 people have income from renting properties

And I may have a slightly skewed sense because I look at properties in my area and there are lots of new builds which I would never buy. I don't trust new builds, I don't trust the cladding on those buildings, and I don't trust that, as a leaseholder, if I had a flat I wouldn't be fucked on paying to fix the cladding. But a lot of the adverts are aimed at international buyers - unless what first-time buyers are really looking for in a home is a "stable asset class"

Edit: And thinking abou landlords - I had a mystery landlord in Bristol, then a landlady who looked like Yubaba from Spirited Away and quite liked being involved with her tenants/properties.

Moving into London I had:
1 - A guy who used to pop by the flat randomly on his way home from work, mystery London landlord;
2 - Someone living in Florida who I never met;
3 - Then properties owned by friends' families (basically two yuppies got married one owned a house with her sister, which I rented with friends for a while, while she lived in her husband's flat - then they had kids and I moved into her husband's flat with another friend);
4 - A random very, very posh London woman who had a friend (who occasionally needed the living room for webcam sex shows he did with gimp gear) who was basically the live in "head tenant"; and
5 - Now with a guy I've literally never met and is very unobtrusive which is the dream.

It's been a mixed bag

Edit: Incidentally - and this may not be a surprise - the gimp guy was incredibly passive aggressive about the cleaning rota. Yubaba and the Floridian also both relied on what I can only describe as elderly amateurs to do any repairs/odd-jobs that were necessary - they were very nice but not the speediest at getting things fixed.

[Josquius]

I've had big companies and small owners. The small owners were by far the better. I am determined to try my utmost to avoid renting from a big company ever again. I felt imprisoned in the flat I was renting. It was deeply unpleasant.

The way to go IMO (not at all planned out and politically a non-starter) is steadily increasing council tax rates (altered so as to be applicable to the owner rather than the resident. The poor shouldn't be paying this.) as you own properties beyond your first such that owning and renting out a second- you can earn a little money but under most circumstances its not worth buying a house just for that.  Nonetheless there's plenty of viable reasons why you might come into owning a second property so it shouldn't be punished. Its necessary for worker mobility.
On the third you should be about breaking even, and beyond that you should be losing money from it. Owning four or more properties is a luxury you should pay big for- with rental income also being heavily taxed at a rate tied with this.
The only possible way around this should be in signing over management of your property for a fixed and very lengthy period, breakable only under exceptional circumstances, to a local council or housing association for them to manage and rent out at a fair rate.

[Tonitrus]

I've much preferred the individual property owners/landords I've had as all.  Though I imagine that I've been extremely lucky in that they've all been very good people, and always had a good, respectful, owner/tenant relationship. 

[Tamas]

Council tax is paid by the tenants.

[Josquius]

Council tax is paid by the tenants.

Which should change. Its a ridiculous tax that falls way too heavily on the poor.

[The Brain]

Can't you guys just build more homes?