Tory MPs have expressed concern about ‘growing cracks’ between Boris Johnson and his Chancellor Rishi Sunak, as Cabinet splits widen over post-Brexit economic policy and the UK’s tense relationship with China.
Differences between the two most powerful members of the Government came to a head last week in meetings about the security threat posed by Beijing and the scope of a new trade deal with Washington.
Sources also claimed that a rift has opened up over coronavirus strategy – although allies of both men insisted last night they are ‘on the same page’ in terms of managing a swift exit from the lockdown and avoiding austerity measures during the recovery.
Tensions are growing between Prime Minister Boris Johnson (right) and Chancellor of the Exchequer Rishi Sunak (left) over the UK’s relationships with China and the USA
It comes as rumours swirl around Westminster that the Prime Minister is struggling to recover fully from being infected with Covid-19, and requires ‘power naps’ of two to three hours during the day – something Downing Street says is ‘completely untrue’.
The claims have fanned febrile talk on the backbenches – also denied – that Mr Sunak is already positioning himself for a run at the party leadership if it falls vacant in the next couple of years.
One of the sharpest differences between No 10 and No 11 is over China as Ministers have been alarmed by sabre-rattling from Beijing.
The Chinese embassy in London is understood to have passed on warnings that the regime will take ‘economic revenge’ if the Government continues to warn it to respect democracy in Hong Kong – or goes ahead with a mooted U-turn on letting Huawei help to build the UK’s 5G mobile phone network.
Mr Johnson (left) and Mr Sunak (right) disagree on a proposed new relationship with China, with the PM aiming to limit the UK’s economic dependence on the Communist state, with Mr Sunak wanting to protect the nation’s economic recovery from the COVID-19 crisis
At a meeting of the National Security Council on Tuesday, Mr Johnson unveiled plans for a new relationship with Beijing which would limit the UK’s economic dependence on the Communist state.
However, it was met with stark warnings from Mr Sunak that ‘putting up an economic wall’ risked hampering Britain’s GDP and slowing the crisis recovery.
Mr Sunak was heavily backed by Business Secretary Alok Sharma and the pair made ‘a forthright case’ for continued Chinese investments in a range of sectors including nuclear power and steel.
But sources within the top-level meeting of senior politicians and spy chiefs argue that Mr Johnson sided with ‘more hawkish’ Ministers such as Home Secretary Priti Patel, Defence Secretary Ben Wallace and Foreign Secretary Dominic Raab, who are pushing for a much tougher line on Chinese relations.
A source said: ‘The economic departments were obviously worried about their balance sheets and made that very clear. Rishi was reading from the Treasury’s script that we are all doomed if we don’t do as they say.’
But a defender of the Chancellor said he was clear that ‘we need to be more transactional with the Chinese’, but warned there would be an economic hit if we disregard the world’s second-largest economy.
Mr Sunak also disagrees with Mr Johnson over the terms of a new trade deal with America.
At a meeting on Monday of the XS Cabinet sub-committee, which thrashes out key Brexit policy issues, the Prime Minister rejected calls by Mr Sunak and International Trade Secretary Liz Truss for controversial US produce such as chlorinated chickens and hormone-filled beef to be allowed to enter the UK without being subject to high tariffs.
Mr Johnson, who chairs the meeting, sided with Environment Secretary George Eustice and Cabinet Office Minister Michael Gove, who called for UK farmers to be protected from the new competition.
Mr Johnson has set himself against traditional Treasury orthodoxy by rejecting calls for tax rises and spending cuts to try to salvage the public finances following the huge financial hit of the pandemic.
One Conservative MP said: ‘The sense among my colleagues is that Rishi is allowing more cracks to grow between him and Boris.
His approval ratings are better than the PM’s, which seems to have given him the confidence to push back in areas where they disagree.
‘The chatter about Boris needing naps of two to three hours a day has added to the sense that Rishi’s time could come sooner than expected.’
Government sources say that Mr Sunak (left) is allowing the cracks to grow between him and the PM (right), with the Chancellor’s approval ratings appearing better than the PM’s
Last night a senior source confirmed that the austerity debate was ‘a very live discussion’ in No 10. The source said: ‘The issue is not so much with Rishi as with the senior Treasury mandarins, who are institutionally geared towards saving money.
‘But the PM’s position is that there is not going to be a repeat of 2008 by cutting public spending. His priority is to protect people and jobs.
‘This is a very live discussion in the building at the moment. While Rishi is alive to the human costs, the Treasury’s departmental mindset is geared towards austerity.’
Throughout the coronavirus crisis, Mr Sunak has been the leading ‘hawk’ calling for lockdown measures to be eased as quickly as safely possible.
While Mr Johnson was originally more cautious about lifting the restrictions – chastened from his instinctive liberalism by his brush with death – he is now understood to agree with Mr Sunak that the economy could suffer irreparable damage if the social-distancing rules are not relaxed more rapidly.
The Chancellor (pictured) is believed to be keen on lifting lockdown restrictions as soon as possible, with the Prime Minister (not pictured) appearing to agree with his right-hand man
Health Secretary Matt Hancock, the leading lockdown ‘dove’, is ‘no longer in the driving seat in the issue’, sources say.
On China, an ally of Mr Johnson said: ‘The Prime Minister is trying to steer a moderate course between the China-bashers on the backbenches and those, such as the Chancellor, who worry about retreating into economic isolationism’.
A Government source said: ‘No 10 and No 11 are as one in their joint determination to steer the country back to economic recovery in the safest possible way’.
Downing Street said it was ‘completely untrue’ that the Prime Minister needed sleeps during the day, or that Mr Sunak had leadership ambitions.