A furious Rishi Sunak believes he has fallen victim to a “political hit job” after details of his wife’s tax status were leaked to the media.
Allies of the chancellor, whose rising star has seen him labelled a future party leader, told The Times he believes the disclosure of his millionaire wife’s non-domicile status was a “co-ordinated attack” timed to coincide with a rise in National Insurance contributions.
“He thinks it’s a total smear,” one ally told the paper. “It feels like there’s a full-time briefing operation against him. This is a hit job, a political hit job. Someone is trying to undermine his credibility.”
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
The leak that has so angered Sunak revealed that his wife, Akshata Murty, saved “millions” in tax payments through claiming non-domicile status while living in the UK.
Murty, a fashion designer and shareholder in her father’s multibillion-dollar IT services firm, used her “non-domicile status in order to save on her tax bill while her husband was chancellor”, The Independent revealed.
While the exact sums involved are not known, sources told the paper that “it could have saved her millions of pounds in tax on foreign earnings over several years”.
Claiming non-domicile status is entirely legal and has existed under Conservative and Labour governments. A spokesperson for Murty told the BBC she has paid all of her UK taxes legally. But the leak has “intensified” pressure on the couple, The Times said.
Sunak “was hit by a political backlash over the news”, the Daily Mail said, with critics pointing out that Murty is saving on her tax bill while “living in a taxpayer-funded flat in Downing Street”. She was then “forced to make an embarrassing climbdown” over the claim “her non-dom status was an automatic product of her Indian citizenship”.
The chancellor yesterday came out fighting, telling The Sun: “I’m an elected politician. So I know what I signed up for. It’s different when people are trying to attack you by coming at your family and particularly your wife.
“It’s unpleasant, especially when she hasn’t done anything wrong. Every single penny that she earns in the UK she pays UK taxes on, of course she does. And every penny that she earns internationally, for example in India, she would pay the full taxes on that.”
He added that “it wouldn’t be reasonable or fair to ask her to sever ties with her country because she happens to be married to me”, arguing: “She loves her country. Like I love mine, I would never dream of giving up my British citizenship.”
But despite his bullish response, one minister suggested that the issue could trigger his resignation if a full explanation is not forthcoming.
“I don’t think it’s sustainable. More and more will be revealed about the family’s finances,” the minister told The Times. “I don’t think he has Boris or Blair’s ability to ride out the worst circumstances. His wife is a non-dom billionaire and the questions are only going to get more difficult.”
According to The Times, “Sunak had told only a few people in government about his wife’s tax status”. His “closest advisers were said to be unaware”, while Boris Johnson and his No. 10 team were also blindsided by the news.
A supporter of the chancellor told the paper that they felt increasingly “isolated” among their colleagues and that few Tory MPs had spoken up in Sunak’s defence. Others suggested the leak was a Labour tip-off.
Political news site Guido Fawkes reported that Private Eye “flagged up his [Murty’s] status in March last year”, suggesting that the story had hit Sunak hard because of the “timing and the media context” of the cost of living crisis and tax rises.
The site also stated that Labour had “dropped the non-domiciled wife story to a sympathetic hack for a scoop”, adding: “It is a sign of a re-invigorated Labour media operation, using tried and tested media strategies with the ruthlessness required to win.”
Maggie Pagano, executive editor of Reaction, said the story means Sunak’s “already diminishing returns on becoming prime minister are now sunk to oblivion”. The Guardian added that a non-domiciled spouse who is “richer than the Queen” is certain to be a political problem for the chancellor.
Johnson yesterday sidestepped questions about Sunak’s financial affairs, saying that it is “important in politics if you possibly can to try and keep people’s families out of it”.
But if the attack was a “hit job”, all signs suggest it may have taken out its target.
“The chancellor is entitled to his money,” said The Spectator’s editor Fraser Nelson in The Telegraph, “but that won’t stop his political enemies trying to exploit it.”
Continue reading for free
We hope you're enjoying The Week's refreshingly open-minded journalism.
Subscribed to The Week? Register your account with the same email as your subscription.