DDuring the furor over who footed the bill for the lavish renovation of the prime minister’s apartment, the Chancellor’s people made a big deal of saying there was no risk of Rishi Sunak generating such a stench as the wallpaper. The Treasury issued a statement ostensibly saying that Mr Sunak had paid for the refurbishment of his family quarters in Downing Street from his own deep pockets. Shortly after, an admiring Conservative MP told me with a laugh, “Rishi is rich enough to buy his own wallpaper.
After the many sordid episodes associated with Boris Johnson, the idea that his next-door neighbor was scandal-free has recommended Mr Sunak to Tory MPs as their next leader. The contrast between the two men – a money-hungry prime minister splashed with sleaze against a chancellor portraying himself as the spotless family man – also made Mr Sunak the more appealing figure to voters.
Even though it was a short time ago, it feels like ancient history. This was before the public were outraged to learn that his wife, Akshata Murty, the daughter of an Indian billionaire, was using non-domicile status to avoid paying UK tax on her huge overseas earnings. . It turns out the Chancellor is really into lower taxes – as long as they are for his own family.
The first response to the outcry from Mr Sunak, his wife and their apologists was to protest that she was breaking no law by exploiting this tax break for the mega-rich. That was telling about them in itself, because it failed so spectacularly to understand why people would be angry even if the arrangement was legal. Some members of the public may resent the great wealth of the Sunaks, some may admire it, some may care deeply that they enjoy stratospheric riches far beyond the dreams of most Britons and some may not care. Almost everyone in the public will reasonably expect Sunaks to follow the tax rules that apply to the typical voter.
The fortune of the Chancellor’s family being safe from his tax collectors would smell rotten under any circumstances. The current context made it absolutely toxic. It raises taxes for tens of millions of low-income Britons who have no choice but to pay. He responded to criticism of his recent spring statement by saying the Treasury lacked the funds to do much to ease the cost of living crisis for poorer households. Only for everyone to learn that there would be more money in the kitty if the Chancellor’s wife paid taxes like most people do. It was the moral, stupid. It was iniquity. It was injustice.
For an Instagram politician who is an obsessive conservative of his personal image, it took a remarkably long time for the Chancellor to realize just how untenable this was. The Sunaks even at first tried to persuade us that they did not deserve to be targets of fury, but objects of sympathy. You needed your smallest violin to go along with his lament that the couple were victims of a “political job”. In an interview particularly sorry for her fate, the Chancellor went so far as to claim that his opponents were trying to “smear my wife” in order to “catch me”. It is true that he has enemies, the biggest of whom are not sitting in a newspaper office or on the opposition benches, but living next door at number 10. Whatever the origins of the leak and the motives of the lessor, there is no “smearing” in discussing whether it is right for the Chancellor’s wife to benefit from a tax system inaccessible to the vast majority of Britons.
The storm had been raging for 48 hours before Mr Sunak fully understood how dangerous it had become for his career. The couple released a statement on behalf of his wife which dismissed their previous claims as to why she failed to pay UK tax on her overseas earnings. The statement said she would do so in the future, saying she now “understands and appreciates the British sense of fairness”. It was the minimum necessary to try to contain the damage to her husband’s reputation before it was irretrievably broken. It was striking how very few Tory MPs were willing to step in front of a microphone to defend him. A growing number of Tories had privately said that Mr Sunak could not remain in the Treasury unless his wife changed her tax status.
The Chancellor hopes they have retreated to a more durable position, but there are still outstanding questions over the family’s tax affairs which the media and opposition will continue to press. There has been no promise to pay the very large sums, some estimates put at £20m, that she has saved through the arrangement over the past decade. One will legitimately ask: if it is fair and just for her to pay UK tax on her overseas income in the future, is it not fair and just for her to redress the deviated tax in the past ?
Questions will also linger about Mr. Sunak’s character and judgment. It will be even more of an issue whether a super-rich Chancellor can be the man to persuade less well-off Britons that they will have to endure hard times. Even some Tories raised eyebrows when the Sunaks donated more than £100,000 to his former school, Winchester College, at a time when he is denying state schools the resources they say they need. Asked recently about the price of a loaf, he channeled Marie-Antoinette when he has answered: “We all have different breads in our house.” Houses would have been a more accurate answer, as they have at least four properties in the UK and overseas as well as the use of two government residences, the Downing Street apartment and Dorneywood in Buckinghamshire. Colleagues have been baffled that the Sunaks felt it was a good time to splash big bucks on a swimming pool, tennis court and gym complex at their mansion in his Yorkshire constituency. It may not be the best look for a chancellor raising taxes amid the most severe pressure on real incomes in decades.
There is much debate among Tories over why the Chancellor failed to realize his wife’s tax situation was bound to cause an uproar. Is it because he is so rich or because his political instincts are so poor that he couldn’t see what it would look like in the eyes of the electorate? Did he realize it would look terrible, but foolishly assumed it could be hidden? Did he expect it to be revealed one day, but bet it wouldn’t spark an uproar? Was he anticipating an uproar, but did he think he could eradicate it? Was he naïve, stupid, complacent, cavalier or arrogant?
Its popularity has skyrocketed during the pandemic. Now it goes down like a stick. His approval ratings, once the envy of every other Westminster politician, were already tumbling. In our latest Opinium poll, they fell again to a record score of minus 15. Among Tory members, the most authoritative survey of their views on ministers suggests it has fallen from the peak of their pop to third from bottom.
This will be greeted with the salty tears of a smiling crocodile next to number 10. In terms of the power struggle within the Tory hierarchy, anything that hurts the chancellor is considered useful to the prime minister. The self-inflicted wound of the man who was, until very recently, his most likely successor will make Mr Johnson feel more secure in the premiership. Which also means this is surely more bad news for the Conservative Party’s standing with the public.
The two oldest members of the government have now scandalized the country. Partygate was born because so many of Number 10’s people thought they were free to flout the Covid restrictions imposed on everyone and were encouraged to behave atrociously by having a boss with a career of shameless breaching to the rules. A similar sense of entitlement led the Chancellor and his wife to decide there was nothing wrong with avoiding paying UK tax on a huge chunk of their vast family income.
There is a tendency in the behavior of this government. Its leaders demand painful sacrifices from all others while claiming special privileges for themselves. There is a rule for them. There’s another one for little people. That’s how they act because that’s how they think.