Sajid Javid, of Pakistani origin, replaces Philip Hammond in new P.M. Johnson’s cabinet
Britain’s new finance minister Sajid Javid is the son of a Pakistani immigrant bus driver who fought racism to become a high-flying banker and top member of Boris Johnson’s team.
The 49-year-old moves from the interior ministry to replace Philip Hammond as Chancellor of the Exchequer at a perilous moment for the U.K. economy.
Newly installed Prime Minister Johnson has threatened to take Britain out of the European Union without an agreement if that is the only way to leave by the Oct. 31 deadline. The prospect of a messy divorce after 46 years has unnerved the markets and seen the pound slump to a two-year low against both the dollar and the euro.
But Javid, who recalls with fondness his chance to shake the late Margaret Thatcher’s hand as a young boy, has first-hand experience navigating financial turmoil. He made big bets—and big profits—as a risky derivatives trader for Deutsche Bank during the 2008-2009 global financial crisis.
Javid then entered politics and saw his ministerial career swing from one high to the next. Economists view him as a liberal who knows banking and the drawbacks of bureaucracy and red tape.
Javid’s instincts saw him vote in 2016 to remain in the E.U. because of its economic benefits to trade. But he has since rallied to the Brexit cause and Johnson’s leadership challenge after himself bowing out early in the campaign.
Markets.com financial website analyst Neil Wilson said he expected Javid to be “very friendly” to London’s vital financial hub. Part of that strategy includes cushioning the potential fallout from Britain’s split from the other 27 E.U. nations through increased spending and various forms of credit to big businesses and banks.
“I’d anticipate Javid loosening purse strings—more stimulative and away from the austerity approach,” Wilson said.
Javid grew up in a tough area of the southwestern English city of Bristol, where he recalled being called the racist term “Paki” in school. He also faced initial questions about his background in his early days in finance, but persevered and became the first from an ethnic minority to get a top government job.
He won promotions to business and then housing secretary before arriving in April 2018 at the interior ministry.
Javid developed a reputation as a loyal minister who was tough on crime but also sensitive to the racial injustices of Britain’s past immigration policies. His predecessor quit amid a scandal over the “Windrush” generation, Britons born in the Caribbean who migrated legally in the 1960s but were being deported because of a lack of papers.
His first pledge was to promote “decency and fairness.” However, he also faced criticism for stripping the U.K. citizenship of Shamima Begum, a 19-year-old mother who as a teen to join the Islamic State Group in Syria and wanted to return to London.
Javid’s appointment is in keeping with Johnson’s promise to create a diverse cabinet of modern and energetic leaders. His wife Laura is a churchgoing Christian and he is not a practicing Muslim himself. Some of his four children are looking at future careers in finance.
Javid’s biggest challenge might be in balancing his free market views with the high-spending pledges Johnson made during his campaign—the new premier has also promised major tax cuts. “Boris Johnson appears committed to pursuing a markedly looser fiscal stance—and he will no doubt expect his chancellor to be supportive of this stance,” EY Item Club economist Howard Archer said.