Senior Conservatives have dismissed Rishi Sunak as a potential prime minister – and now believe Boris Johnson will have to oust him in his next reshuffle as chancellor – following the furor over his US green card and his wife’s tax affairs.
A former Tory minister said that observer that the fear among Conservative MPs with small majorities was that the party was now in a “death spiral” as its two leaders – the prime minister and the chancellor – had both lost voters’ respect.
“The concern is that this is symptomatic of a party in ultimate decline and that we are in a death spiral,” the ex-minister said after Sunak’s multi-millionaire Akshata Murty made a sudden about-face by agreeing to pay taxes are paying their global fortune, having avoided doing so in recent years due to rules governing those who elect non-domiciled status.
Referring to all the controversy and revelations about the couple’s US green cards, the ex-minister added: “This is the concern of colleagues with small majorities.
“He has shown colossal naivety and the way he has managed his affairs does not even suggest that he is committed to Britain but that he is keeping the option of a career in finance in the United States open. “
It also emerged on Friday that the Chancellor and Murty both held US green cards, meaning they had registered as permanent US citizens. In a development that shocked many Tories, it was confirmed that Sunak held the green card for a period of 19 months when he was Chancellor and in charge of Britain’s finances. The issue was even raised at a White House briefing on Friday night.
A former Tory Cabinet minister said Sunak was clearly damaged and had no chance in a leadership contest if one were to take place in the coming months. The way he arranged his family’s affairs showed that his political judgment was grossly flawed and raised questions about whether his leadership chances could ever be revived, he said.
A third senior figure in the party said the controversy of recent days had shown how quickly a once stellar career could be reversed, to a point from which it would be difficult to recover. “The timing is terrible. I think his problem is that when he was chancellor, taxes went up a lot, which is not popular in the party and in the country. And we have a cost of living crisis. None of that looks good.”
Johnson is likely considering a ministerial reshuffle in the summer or fall. There has been known to be tension between No10 and No11 after Chancellor Johnson offered only lukewarm support at the height of the lockdown busting party scandal ahead of Russia’s invasion of Ukraine. A government source said: “I don’t see the prime minister resisting this opportunity to move Rishi now.”
The latest Opinium poll for the observer notes that Sunak’s approval rating has fallen to a new low of -15, making him only marginally less unpopular than Johnson himself.
Just four months ago, when he was a firm favorite to succeed Johnson if the Prime Minister was ousted from 10th place across the parties, the Chancellor’s approval rating was a very healthy plus of 11.
All opposition parties are now determined to put pressure on Sunak in the coming weeks. Labor and the Liberal Democrats have urged Murty, who remains an Indian citizen, not only to start paying taxes on her overseas earnings but also to pay back what she has saved in recent years.
Shadow Transport Secretary Louise Haigh said that while her “non-Dom” status was legal, Sunak, who last week claimed she was the victim of a smear campaign but failed to be transparent about his family’s tax status, when he was tax increases for millions of people. “He’s come out on a number of occasions to try to muddy and blur the waters around this,” she said.
In a statement on Friday, Murty, who is set to keep India as her “residence”, said she had done nothing wrong but acknowledged that some people do not see her tax status as compatible with her husband’s position. “I understand and appreciate the British sense of fairness and I don’t want my tax status to distract my husband or affect my family,” she said. “I’m doing this because I want to, not because the rules require me to.”
By retaining the non-domicile status, she can save large sums in inheritance taxes in the future. Murty has a net worth of at least £690million in her father’s company, Infosys.
The Liberal Democrats have drafted a bill aimed at forcing the chancellor and all other government ministers to disclose whether they or their spouses claim non-domiciled status or have interests in foreign tax havens.
Daniel Beizsley, a researcher at the charity Spotlight on Corruption, said the fact that Sunak had a blind trust that placed his financial interests in an independent trustee raises questions about potential conflicts of interest. “Through this agreement, Sunak avoids a proper scrutiny of his financial interests and is the only current cabinet minister to take this approach. The system of blind trusts needs to be reconsidered to include at least a summary of their content when relevant to a minister’s mission, to give the public a better understanding of potential conflicts.”