The UK Finance Minister’s Dodgy Household Finances

The UK’s chancellor of the exchequer/finance minister seems unsure about his country of residence.

While in this office as a British citizen, Rishi Sunak pretended to be a full-time resident of the United States by retaining his Green Card, even after he was parachuted into the safest Conservative seat in the country, and after he became chancellor of the exchequer.

Sunak’s wife, Akshata Murty, an Indian citizen and the daughter of one of Narendra Modi’s billionaire oligarchs, said to be richer than the queen, registered herself as a non-domicile in order to avoid paying £millions in tax on her overseas income.

Non-Dom status is intended for British citizens who spend the majority of their lives abroad, but Murty was living in the chancellor’s residence in Downing Street, and sending her children to a London school.

A shamed Murty said she would pay UK taxes from now on, while saying nothing about the back tax she owed, or the precise incomes she would declare to the tax authorities. She tried to justify he non-dom status by saying she intended to return to India to “look after” her parents when they were old. This was regarded as a joke—her billionaire parents are highly likely to have an army of servants and retainers already in their service, and this is not likely to end in their old age.

Pretending to be an overseas resident in order to avoid UK tax can merit a prison sentence, but being married to a senior Tory government minister does seem to carry a prized exemption.

Sunak also violated parliamentary standards by failing to declare his wife’s £690m/$901m shareholding in the IT company InfoSys, which has had more than a dozen meetings with senior government ministers, and secured £millions in contracts from the UK government. As the minister responsible for implementing policy on non-domiciliary status, Sunak should have taken steps to remove himself from any consideration of his wife’s non-dom status, while notifying his officials of this to preempt the charge of a conflict of interest.

The Tory party’s excuse for Sunak’s derelictions seems to be that it’s all just a cluster of blameless oversights.

Apparently, Sunak forgot that he was registered as a permanent US resident; he forgot to consider the legal status of his wife concurrently pretending to be resident in India; and he forgot to adhere to the ministerial code by declaring his wife’s huge shareholding in a company that was bidding for UK government contracts.

Sunak had the nerve to demand an inquiry into how his dodgy financial arrangements were disclosed by a whistleblower.

He also called on Lord Geidt (the Prime Minister’s independent adviser on ministerial interests– a trustie who worked for the royal household in the past) to investigate his finances in order to decide if they were in compliance. Given that a large chunk of the Sunaks’ billions is hidden away in tax havens (which of course facilitates the concealment of true ownership), the good Lord Geidt will probably have little to see when he opens the books.

If Sunak has made an apparent confused mess of his personal finances, to the extent that he doesn’t even seem to know which country he resides in, it beggars belief that such an inept bungler is the finance minister of the world’s 6th largest economy.

The trail leading up to Sunak’s situation has been apparent for years. He is a former hedge fund manager, whose previous employers – Theleme Partners and TCI – are both linked to a tax haven (the Cayman Islands). Prior to that he worked for the nefarious Goldman Sachs.

When he backed Brexit in 2016, Sunak’s models for economic success and appropriate trading partners for the UK were the US, India and Brazil. He claimed in 2017 that a “clean break” from the EU would allow the UK to reduce regulation and create low-tax zones for businesses.

Sunak also wants to turn the UK into a “global hub” for crypto, despite warnings from the Bank of England governor that cyber currencies are the “new frontline for scammers”.

The post-Brexit “Singapore-on-Thames” business model has been Sunak’s refrain, though he probably overlooks the fact that corruption on the Tory party’s scale would merit lengthy jail sentences for its leaders if they had been Singaporeans– the island has guarded zealously its squeaky-clean image where corruption is concerned.

The recent spring budget statement was a disaster for Sunak. With households facing the worst real-terms income squeeze in 50 years, and inflation at its highest for decades, Sunak did nothing to address the cost-of-living crisis facing millions.

Sunak made a paltry 5p cut to fuel duty; he increased the national insurance threshold paid by employees, which provides no help for the poorest; and announcing a 1p cut in income tax in 2024(!) is scant comfort for families struggling with rising prices today. This is on top of Sunak’s decision last autumn to reverse the £20 uplift to universal credit (paid to the poorest individuals).

The above notwithstanding, Sunak has been assiduous in burnishing his brand since becoming an MP in 2015.

During the height of the pandemic Sunak created the “Eat Out to Help Out” dining scheme, which enabled millions of customers to claim up to £10/$13 discounts in restaurants. Alas, studies linked this scheme to a significant rise in Covid cases. Always eager for a photo-op like his boss BoJo Johnson, Sunak was photographed, sleeves rolled-up, waiting on diners at a restaurant.

Sunak spurns the image of the expensively-suited hedge fund boss, and prefers to publicize images of him working on his laptop in casual clothes. The laid-back attire includes a couple of Gucci hoodies, but no matter.

To tout his 5p cut to fuel duty in the budget statement, Sunak borrowed a modest family hatchback for a photo op in which he was seen refuelling the car.

There was almost endless mirth in all forms of media after Sunak claimed he owned a Volkswagen Golf—a little digging showed that he also owned a high-specification Range Rover, which costs from £94,000/$123,000 new, and a top-of-the-range Lexus and a BMW which are kept at his luxury Santa Monica property. A new Lexus can cost between £50,000/$65,000 and £80,000/$104,000 while BMWs start from £30,000/$40,000 and go well over 6-figures for top-end models. He also has a ministerial limousine at his disposal.

The effort to show that he’s just a regular kind of chap fell apart even more when Sunak, along with BoJo, was fined £50/$65 for attending a party in breach of Covid lockdown restrictions in 2020. There were several parties, and more fines are expected, but the £50 fine is meagre—a 19-year-old Nottingham student was fined £10,000/$13,000 for organizing a house party during the lockdown.

Sunak was once tipped as a potential replacement for BoJo, who is in trouble not just over Partygate, but the cost-of-living crisis, the ongoing post-Brexit shambles, his multiple failures over the environment (many UK rivers reek with unfiltered sewage), and so forth.

There is now no chance that Sunak will be the next prime minister.

Kenneth Surin teaches at Duke University, North Carolina.  He lives in Blacksburg, Virginia.