I hope that readers heeded my advice a year ago to “sell their Sunaks” when his market valuation was artificially inflated by the unsustainable fiscal generosity demanded by the pandemic.
The revelation that he broke lockdown rules along with his boss is just the latest mistake. But as someone who spent two decades in the political bear pit of Westminster, I’ve been shocked that someone so naive and seemingly ignorant of political life has gotten so close to power.
Frivolous though some of the stories around his wife Akshata Murty’s tax affairs have seemed, Sunak (or his advisers) must surely have recalled that non-dom status was a source of political scandal just over a decade ago. As one of the pot-stirrers at the time, I vividly recall how such (rather minor) political figures as Michael Ashcroft and Gulam Noon were forced to give up their non-dom status in order to join the House of Lords.
Zac Goldsmith, a more serious political figure, was firmly told by David Cameron that he had to choose between a political career and his – inherited – non-dom status (which he then surrendered).
An astute political operator like Sajid Javid was smart enough to dump his non-dom status before embarking on a political life (he was also tough enough to walk away from No 10 bullying when he held the position of chancellor).
The issue was an early flashpoint in the coalition. My Lib Dem colleagues wanted the system scrapped as a tax dodge of questionable merit, while the Tories valued the incentive for the global rich to live in Britain and pay tax on their British income and capital gains. We reached a compromise whereby the richer non-doms – many are not high earners – would pay £30,000 for the privilege of keeping the status after seven years’ residence here, and £60,000 after 12 years.
Skeptics say that the USA taxes the overseas income and gains of its foreign residents, so why shouldn’t we? Part of the answer is that the US is more tax-friendly to the super-rich in general. There is therefore broad agreement that we need measures to avoid actively driving away useful but temporary and internationally mobile residents such as Pascal Soriot, the CEO of Astra Zeneca; Mark Carney, the former governor of the Bank of England; or the overseas stars of the Premier League, such as Mo Salah and Cristiano Ronaldo. But Messrs Soriot and Salah are not trying to become our prime minister.
Doubtless some readers will feel stories about Ms Murty wrongly treated her as an appendage of her hapless husband: she is an heiress in her own right, after all. And it is true that we have long passed the time when a female’s income was treated as that of an asexual spinster or family pin money. But it is disingenuous to compartmentalize family income and wealth: “Darling, you will pay for the Range Rover and Emily’s school fees out of your cabinet minister’s salary and I will pay for the Lexus and Rupert’s fees at Eton out of Daddy’s fortune”. Families don’t operate like that.
In any event, Ms Murty, as an Indian, will be familiar with India’s own longstanding political soap opera around Sonia, Rajiv Gandhi’s wife, then widow, and the finances of her Italian family. Political wives (and the occasional political husband) do not live in a separate universe to their spouses.
It blows the imagination that neither of them realized how a rich person’s tax dodge would be seen, especially at a time when there is real economic hardship and he had just passed up an opportunity, in the spring statement, to provide some relief. He has instead succumbed to the meanest and most conservative Treasury instincts at the worst possible time.
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As long as he remains chancellor – probably not long – he provides the opposition parties with a stick to beat the government. The powerful slogan, one rule for them, one rule for us, has been given a new lease of life.
The chancellor has made matters worse by demanding an inquiry into the press leak around his family tax affairs. What on earth did he expect? No serious politician imagines that there is such a thing as “confidentiality” in government. I recall that, when I picked a fight with Mr Rupert Murdoch, my tax file appeared in The Sun shortly after. Fortunately, it was devoid of serious interest.
The Sunak story illuminates a wider lesson about the way politics works and about this government, in particular. Being heir-apparent is a dangerous place to be. The prime minister is a student of the Roman classics and clearly knows what to do with subordinates who threaten the emperor. These days, there is no need for a poisoner when a press leak will do the trick. A strong warning has gone out to Messrs (and Mrs) Hunt, Wallace, Zahawi, Javid and Ms Truss – 110 per cent loyalty is always required, and silence is preferred.
The chancellor could yet fall, while the prime minister survives.
Sir Vince Cable’s podcast, ‘Cable Comments with Vince Cable’, is available here