Rishi Sunak’s bright prospects in British politics have dimmed | Mint

Rishi Sunak’s bright prospects in British politics have dimmed

Britain's Chancellor of the Exchequer Rishi Sunak (Photo: Reuters)
Britain's Chancellor of the Exchequer Rishi Sunak (Photo: Reuters)

Summary

The UK chancellor appears unable to live down a ‘scandal’ spotted in his wife’s taxation status

In 1886, the Liberal British politician Joseph Chamberlain said, “In politics, there is no use looking beyond the next fortnight." In more recent years, the former British prime minister Harold Wilson has been credited with saying something pithier—that a week is a long time in politics.

But in the age of Twitter, each moment mishandled can trap you for an eternity, as it must seem to Rishi Sunak, Britain’s chancellor of the exchequer, who had seemed like a front-runner to succeed the troubled prime minister Boris Johnson. Not long ago, the British media’s knives were out; Conservative parliamentarians were baying for Johnson’s blood after stories emerged of bacchanalian parties at 10 Downing Street, with wine and cheese, while the nation was under a severe lockdown. Covid- affected grandparents lay dying, unable to hug their grandchildren one last time; marriages got postponed to comply with attendance rules; and families could not gather for meaningful ceremonies; but Johnson and his friends and colleagues carried on as though they lived in another country, where the rules the Johnson-led cabinet had imposed did not apply. Sunak had the misfortune of being seen at an apparently impromptu celebration with Johnson. Last week, the Metropolitan Police fined them both, and more fines are expected, as there were other violations.

Quite possibly, Sunak is collateral damage, but it is the least of his worries.

When Johnson’s troubles mounted, the Tories (as Conservatives are called in the UK) looked around for possible replacements. Sunak looked promising. Foreign secretary Liz Truss wasn’t universally popular, and an old speech in which she seemed to suggest that Yorkshire Tea was grown in Yorkshire kept resurfacing. Home secretary Priti Patel was busy trying to boost her reputation as the minister most capable of closing British doors for asylum seekers and refugees whose life stories mirrored that of her own parents. But Sunak was seen as a safe pair of hands: a son of immigrants who was privately educated, had worked at an investment bank and a hedge fund, and had no hint of scandal.

That was then. Revelations about the tax status of Sunak’s wife Akshata Murthy came to haunt him. The daughter of Infosys founder N.R. Narayana Murthy, she has an Indian passport. Living in the UK, she had declared her residential status as ‘non-domicile’ (or non-dom) to presumably reduce her tax liability. What Murthy had done was perfectly legal. It is a provision under which the foreign income of those who do not ordinarily live in the UK is not taxed there. In Murthy’s case, that income is significant—by some estimates in the British media, she is richer than the Queen. If she were to pay taxes on the dividend income from her overseas investments, her tax bill would rise by millions of pounds.

Again, what she did wasn’t illegal, but doing so when you are married to the nation’s finance minister (known as chancellor of the exchequer) seemed odd, to put it mildly. This, at a time when the government was withdrawing benefits and reliefs granted to tackle the hardships the pandemic imposed, made it sound worse. Like Caesar’s wife, went the sentiment, the chancellor’s wife too should be above suspicion.

In politics, a scandal can happen; the cover-up usually makes it worse. And the Sunak team’s immediate response was clumsy: it was suggested that Murthy would have to give up her Indian passport if she were to surrender her non-dom status, which was simply not the case. Foreigners who are legally resident in the UK can have non-dom status, as can UK nationals. Murthy has since given up her non-dom status, but the damage is done. Sunak has other issues to worry about too, such as his having had a US green card (permanent residency) for several years, including after he became the chancellor, and his undisclosed overseas investments.

Sunak’s supporters believe Johnson may be spreading all this information to scuttle Sunak’s future, and some Tories think it has worked. Johnson is enjoying a Churchillian moment, as his loyalists warn against changing leadership while the Ukraine war is on (which the UK is not fighting). Such concern for Ukraine is touching, given the government’s incompetence in granting Ukrainian refugees entry and its pitiless policy to send other asylum seekers to Rwanda for processing, in defiance of international norms if not the law.

It may be tempting to think Sunak is being singled out for his ethnicity. But his being of Indian origin is incidental. Like Patel, or like Shailesh Vara earlier, Sunak is elected from an exceptionally safe Tory constituency and doesn’t need Asian votes to win. He won Richmond in northern England, where the last time someone other than a Conservative was elected was way back in 1885 (except for a single Liberal victory in 1906).

British voters don’t necessarily resent the rich, but they do dislike hypocrisy. Johnson himself is supremely guilty of that, but the artful dodger that he is, he continues to survive. Or seems to. But if British local elections in May give the Tories a drubbing, knives are likely to get sharpened. Sunak may wish he had been more transparent and kept his family’s financial affairs tidier. As things stand, he’d be lucky to retain his post a month from now.

Salil Tripathi is a writer based in New York. Read Salil’s previous Mint columns at www.livemint.com/saliltripathi

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