The relationship between the prime minister and chancellor is one of the most crucial in British politics. My old friend Nigel Lawson (chancellor 1983-89) certainly thought so, which is why it pained him and Margaret Thatcher when they fell out over whether the UK should put the pound into the European Union’s exchange rate mechanism in the 1980s.
Denis Healey (chancellor 1974-79) thought so too, and once told me his good working relationship with James Callaghan (prime minister 1976-79) was one reason the cabinet held together during the fraught negotiations with the International Monetary Fund in 1976.
