Rumours abound that Chancellor’s position may not be as safe as previously thought.
Speculation is rising that Chancellor Philip Hammond could lose his job if the Conservative Party are returned to Government in the General Election.
Returning Prime Ministers invariably reshuffle their top team after an election, although in recent years this has rarely involved a sitting Chancellor.
But many are expecting a more wide-ranging reshuffle to counter a bruising election campaign – which has seen the Conservatives lose their commanding lead in the polls.
Steve Webb, a former Liberal Democrat pensions minister and now director of policy at Royal London said: “There is good reason to think that the Prime Minister may want to appoint a new Chancellor. The Budget U-turn on national insurance contributions for the self-employed was damaging.”
He added: “The briefing to the press, which has gone on between Number 10 and Number 11, is not a good sign.”
Iain Anderson, executive chairman at Cicero said: “The central scenario here is that Theresa May will still be Prime Minister on June 9.
“This is going to be a moment to refresh and reset May’s Government to address underlying tensions and to make sure everyone is aligned.”
He said a reshuffle could counter concerns about an election campaign “that will be viewed as not just lacklustre but misfiring in lots of ways.”
Chain of command
So who could be in the running to take over at the Treasury?
Webb says: “There are a number of potential runners and riders to replace Hammond.”
He cited Damian Green – who prior to the election was Work and Pensions Secretary.
“Green has run a big spending department and is close to the Prime Minister.”
Other names in the frame include Michael Fallon – currently Defence Secretary – and Home Secretary Amber Rudd.
Both have relevant experience for the role. Fallon has held a business and enterprise minister role and has been a member of the Treasury Select Committee.
Rudd was a private parliamentary secretary to George Osborne when he was Chancellor of the Exchequer. She has also worked for a number of City firms. If appointed she would be the first woman to hold the Chancellor role.
Webb added: “If the Prime Minister is looking for a ‘safe pair of hands’ a long shot would be David Gauke, who has been a Treasury minister since 2010 and was recently promoted to the Cabinet.”
Greg Clark, currently secretary Business, Energy and Industrial Strategy Secretary, is also being touted as another possible replacement.
But many political pundits are hoping that Hammond retains his position. Anderson points out that he’s well regarded by both the City and those in the financial services industry – particularly in relation to his stance on Brexit and regulation.
He says: “The Budget didn’t do Hammond any favours, but he is still liked by the sector.”
It’s a view shared by Ros Almann – a former pensions minister and campaigner. She says: “I sincerely hope that Hammond remains as Chancellor. He is a safe pair of hands and is pragmatic, taking a common-sense approach to looking at evidence.
“He is not a hardline Brexiteer and can provide some balance within the Cabinet. I believe our economy will face some very difficult challenges in the next Parliament and this will need careful handling.”
Many financial advisers agree with the ‘better the devil you know’ approach.
Tim Purdon, managing director of Paladin Financial Services said: “Hammond is still a bit of an unknown quantity and hasn’t had time to really establish his long-term policies. But he’s certainly got experience of the financial services and understands current concerns.”
He added: “Whoever is Chancellor I’d like to see them do what they can to stimulate the economy and the savings culture.”