Cabinet Review: Sajid Javid
Following the appointment of Boris Johnson's cabinet, we have launched a series of articles to assess how each sector views their new Secretary of State. Our seventh instalment focuses on Sajid Javid, the Chancellor of the Exchequer.
1. Do you think Sajid Javid is a good choice for Chancellor?
Steve Collings: He has a strong commercial banking background and this will assist him in understanding the greater economic issues arising from increased spending and tax commitments while balancing the expectations of investors and world currency markets.
Emma Marshall: Yes, definitely. He doesn't come from privilege or any sense of entitlement and it is a refreshing change to see the son of an immigrant, who was state-educated and has a strong work ethic, in this role. With his highly successful background in international banking, it is clear he understands business and that makes him a good choice in my book.
David Wildman: I believe Sajid Javid is a good choice for Chancellor as he has had approximately 18 years’ experience in the international banking world followed by approximately 10 years in politics.
The business acumen he would have developed in his years in banking, now coupled with his political experience, should enable him to command the respect he needs from his own party and perhaps from members of other parties in government. This should help him to deliver the right choices for the benefit of the country. If he can harness this respect, and most importantly project his experience to the wider public, he has an opportunity to become a good Chancellor.
It is a refreshing change to see the son of an immigrant, who was state-educated and has a strong work ethic, in this role.
2. Do you think the department has done a good job in recent years?
Steve Collings: It has done the best it could, given the recklessness of the previous Labour government whose spending commitments were not sustainable. Under the previous government, debt was allowed to run up massively while they ignored warning signs of overheating.
However, in my view, fiscal spending should have been relaxed sooner in relation to frontline services such as education, policing, defence and the NHS as these create income for other parts of the economy. Beyond this, there is no reason to reduce taxes as these are low enough and increases in spending can be achieved without giving away tax reductions as a stimulus.
Emma Marshall: Yes. Austerity was needed to balance the books: we had a huge deficit, with debt rising uncontrollably, and so difficult and unpopular decisions had to be taken to get that deficit under control. Now that has largely been achieved, hopefully we can now enter a new era of investment and growth.
David Wildman: I have been surprised at some of the decisions coming out of the Exchequer over the last few years. There have been some good things, such as the reduction in corporation tax which encourages international companies to consider the UK as a good place to be, however, I feel the cuts should have been greater. We need international companies to base themselves in the UK to root their profits here. This small positive for the business world is overshadowed by the tinkering with things such as increasing IP tax on insurance and the expansion of VAT reach to the detriment of many service companies.
One of the other strange decisions from the Exchequer, which is of more interest to the general public, is the increase in stamp duty. This has effectively stalled the housing market and has not brought in the increased revenues expected. This has made life more difficult for home buyers from first time buyers right through the middle markets to the top end. Because of this, I feel the department has not achieved an overall positive outcome for the country: it has effectively just been treading water.
Because of this, I feel the department has not achieved an overall positive outcome for the country: it has effectively just been treading water.
3. Which areas would you like Javid to focus on in his new role?
Steve Collings: There must be greater focus on investment in the north’s infrastructure. If London truly wishes to redistribute wealth and growth, these will only come with improvements to infrastructure and the northern rail link between Liverpool and Leeds should be a major priority.
Improvements would enable these large northern populations to combine into a significant economic centre. Currently, geographic obstacles and poor connectivity continues to create insulation and a lack of connectivity.
I think there should also be a national programme of capital projects including power stations and a national network of charging points for electric vehicles. This would stimulate the growth in electric vehicles, reducing the costs and increasing the uptake in cars. We could become world leaders in uptake by undertaking a massive investment in charging points. This would require the power generation network to undergo considerable improvement.
Finally, Javid should scrap the white elephant that is HS2. Appetite in the north is at best lukewarm, and it is seen as a sap from the government to get more talent and investment into the capital.
Emma Marshall: Following on from my previous answer, Javid should prioritise investment in our public services in a controlled way.
In particular, from my point of view, he should focus on small businesses and incentivise them to keep investing in their staff while recruiting and expanding. If he cuts the red tape that stifles small businesses like mine on a daily basis, he can really help entrepreneurs thrive.
David Wildman: I feel Sajid Javid, coming from a very entrepreneurial family, should have the qualities to understand we need to encourage entrepreneurship to generate the wealth the country needs to fund our infrastructure and social services.
This can only be done by reducing the tax burdens on business and reducing bureaucracy, thus allowing companies to grow and prosper, enabling them to increase opportunities and employment for our growing population.
Beyond this, I would like to see more spending on education, as I am a believer that the only way to increase social mobility is to give people opportunity through education. A final point here, which I feel would help to spread the scarce resources of the NHS, would be to see a removal of Insurance Premium Tax on Private Medical Insurance as this would make PMI more affordable. This would help reduce the volume of treatments the NHS has to deliver, thereby reducing pressure on the NHS by reducing waiting lists and easing some funding requirements.
If London truly wishes to redistribute wealth and growth, these will only come with improvements to infrastructure and the northern rail link between Liverpool and Leeds should be a major priority.