It is sad that, having risen from humble origins to high office, and with serious financial knowledge, he never delivered a Budget Sajid Javid has become the shortest-serving Chancellor in history, with the exception of Iain Macleod – who ran the Treasury for less than five weeks in 1970, then died in office. Appointed after Boris Johnson became Prime Minister last July, Javid ran HM Treasury for just over six months. Politics is a contact sport – and some will not sympathise, given that Javid, when asked to continue but with new political advisers, decided to quit. It is surely sad, though, that having risen from humble Pakistani origins to high office, and with serious financial knowledge, Javid never delivered a Budget. His sole Commons set piece was last September’s Comprehensive Spending Review, during the delivery of which he was disgracefully harangued from the Speaker’s chair by John Bercow. But what of the policy implications of this sudden personnel change? Rishi Sunak has just over three weeks to prepare for Britain’s first post-Brexit budget on March 11 – unless it ends up being postponed. As Javid was replaced by his 39-year-old understudy, sterling shot up. The pound jumped over half a cent on news of Sunak’s appointment, rising above $1.30, before extending its gains another 50 basis points throughout the day. That partly reflects the view that Sunak, more willing to bow to the whim of No10 than his predecessor, will oversee a bigger growth-boosting spending spree. It’s certainly true that Javid persuaded Johnson to adopt tight fiscal rules in the 2019 Tory manifesto – including the commitment that “Debt will be lower at the end of the Parliament – rather than spiralling out of control under Labour”. Yet, Johnson’s political strategists also wanted this pledge, given the importance of “clear blue water” dividing lines with the opposition. And it’s not as if Javid has been a slouch when it comes to higher spending. Back in September, with the annual budget deficit well below 2pc of GDP, down from 10pc at the height of the financial crisis, Javid delivered a sizeable fiscal boost. His Comprehensive Spending Review was buried under news of Parliamentary wrangling, as anti-Brexit MPs grappled to take control of the Commons order paper. But Javid’s spending package amounted to the fastest increase in day-to-day government expenditure in 15 years. Government departments were awarded a £13.8bn real-terms cash increase in 2020-21 – a 4.1pc rise, over and above inflation, compared with plans announced last March. This is the funding behind the “extra billions for the NHS” and “20,000 new police officers” which bolstered the Tories’ December election campaign. It was a bigger cash injection than all but one of Gordon Brown’s famously profligate Spending Reviews – albeit Javid’s plans deliberately spanned not three years as usual, but just one ­– given the then lack of certainty Brexit would happen. So let no one say that Javid was reluctant to spend – for, under the previous Chancellor, the Tories could rightly claim, as they did repeatedly in the run up to polling day, to have “turned the page on austerity”. I doubt the prospect of bigger spending rises under Sunak is the main reason sterling rose. More important is the fact that if the Government looks a bit more willing to spend, that makes it less likely the Bank of England feels compelled to try to stimulate the economy by cutting interest rates. Financial markets are also licking their lips that something properly radical could be in the offing – in the form of tax cuts. Johnson promised tax reductions during the Tory leadership contest, but has since tempered his low-tax rhetoric. That may be because, on the insistence of Javid and others, the Government has since promised “to avoid borrow for day-to-day spending” – one reason, amid multiple spending pledges, the Treasury has been floating the idea of higher taxes on pensions and property. Sunak, though, a former Goldman Sachs banker, is an instinctive tax cutter. His voting record shows support for lower corporation tax and capital gains tax. This Johnson-Sunak combination – the JohnSun government – could yet deliver across-the-board reductions in stamp duty, income tax and national insurance, appealing to Laffer Curve arguments that total revenue will end up rising as a result of higher activity. We could, then soon see bold Regan-Trump style tax cuts – another reason sterling rose. While lower tax would deliver growth sooner than spending rises, there are reasons to be cautious. While I always prefer tax reductions over spending hikes in principle, Laffer’s higher revenues can take a long time to materialise, if at all. The UK economy is holding up – with new figures showing year-on-year growth of 1.1pc during the final quarter of 2019, higher than the eurozone. And the Government’s public decisions so far – backing HS2, using taxpayer money to bail out a regional airline – along with its promises of lavish spending elsewhere, are ramping up voter expectations. As such, it’s worth noting that in the wake of Trump’s tax cuts, the US annual budget deficit is currently 25pc higher than last year, with the overall national debt up a jaw-dropping $1,100bn over the last 12 months, swelling to no less than 110pc of GDP. The US has the dollar, the world’s reserve currency, which it can print at will to sustainably fund such borrowing. The UK does not. While our public finances are much improved, there is a limit to what the British government can borrow and spend. Having said all that, the rift between Johnson and Javid was, in my view, less about policy than process. It was a machinery of government issue rather than a fiscal issue. The Prime Minister wanted a Cameron-Osborne model, one of very close collaboration between No10 and No11 – to prevent a re-emergence of the kind of Blair-Brown psychodrama that marred New Labour’s heyday. The ultimatum put to Javid was stark – yes. But, as I said, politics is a contact sport. I like and respect Sajid Javid. He would, in my view, have made a fine long-term Chancellor. Barely 50, after years of high office, he could one day have been Prime Minister himself. But, having entered the Commons less than 10 years ago, for all his abilities, Javid perhaps lacked experience of just how brutal politics can be. Rather than resigning, he should have bitten his lip, stayed in the tent and played the long game instead.