Chancellor of the Exchequer Sajid Javid has resigned from one of the most senior roles in the UK cabinet.
The move follows a reshuffle by prime minister Boris Johnson. The PM asked Javid to fire his special advisers, but he declined and decided to step down, instead.
His departure comes just 27 days before the post-Brexit budget is due.
All eyes are now on Javid’s replacement, the member of parliament for Richmond, Rishi Sunak.
This is his first cabinet post as, until today, he was chief secretary to the Exchequer, a role he took on in July 2019.
He first became an MP in 2015.
Adrian Lowcock, head of personal investing at Willis Owen, said: “The resignation of Sajid Javid today has sent shock waves throughout the financial services industry. He is the first chancellor in modern history to not deliver a budget.
“It is unclear whether [the budget] will even go ahead with so little time for Javid’s replacement, Rishi Sunak, to prepare.
“Sajid Javid had alluded to reforms to pension tax relief, the pension’s dashboard, and other policy changes. These are all now in doubt, adding more uncertainty for savers and investors.”
Change of plans?
James Jones-Tinsley, self-invested pensions technical specialist at Barnett Waddingham, said: “A big question is what Sunak’s views towards pension tax reforms will be.
“The pension tax rules have become overcomplicated and beset with tax traps and unintended consequences. We need a root and branch review to usher in a far simpler and fairer taxation regime.
“And with the Brexit paralysis hopefully behind us, calmer conditions in parliament should offer an ideal opportunity to make the reforms that are so desperately needed,” he added.
Not a good look
According to Rachael Griffin, tax and financial planning expert at Quilter, the main focus is going to be on how Sunak is going to handle the government’s “hot potatoes”.
“One of the key pillars of the Conservative’s election success was the perception that they could be trusted with the economy, and the country was hoping for a period of stability within Westminster,” Griffin said.
“This was supposed to be a low-key reshuffle but instead we have yet another key ministerial change. It is really not a good look for the chancellor to quit less than a month before their first budget, and it leaves a host of issues hanging in the balance.
“Rishi Sunak, in his new role, will need to work extraordinarily quickly to get a grip on the upcoming budget and present it to parliament next month. It is yet to be seen whether Sunak will serve as No 10’s puppet, given the speculation that the prime minister’s office is seeking to take closer control of the Treasury.”
Pension issues have been high on financial advisers’ priority list for the upcoming budget, but it’s unclear whether it will be delivered in less than a month and if the newly-appointed Sunak will keep his predecessor’s promises.
