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Rishi Sunak’s wife’s “non-dom” status is another blow to his leadership prospects

Labour figures have been saying privately for some time that voters won’t mind how rich Sunak is but that his wealth will cause political miscalculations.

By Ailbhe Rea

Rishi Sunak is facing fresh questions over his wife’s financial affairs this morning, after it emerged that she has non-domicile – “non-dom” – status, allowing her to avoid paying UK tax on foreign earnings. The Independent, which broke the story, quotes sources who say that it could have “saved her millions of pounds in tax on foreign earnings over several years”. 

Akshata Murty, Sunak’s wife, is an Indian national and the daughter of an Indian billionaire. On the airwaves this morning Kwasi Kwarteng, the business secretary, defended her on that basis, explaining that “as an Indian national she can’t have dual citizenship and she’s got a non-dom status here in the UK.

“After 15 years staying here she will be domiciled, but for the moment she pays on UK income and on foreign income she pays tax outside the UK – that’s what non-domicile status means.”

A row is now raging over how proper her tax arrangements are; this morning “she’s Indian” was trending on Twitter. Some Conservatives are privately expressing concern that the conversation already has uncomfortable undertones, with the implication that the Chancellor is being attacked because his wife is foreign. Others in the party, meanwhile, think the Chancellor should take charge of the story by announcing that his wife has applied for British citizenship. 

This is the second time in recent weeks that his wife’s finances have caused uncomfortable questions for the Chancellor. In analysis of the Spring Statement it emerged that Infosys, the Indian technology giant in which his wife reportedly holds an estimated £690m stake, was continuing operations in Russia despite the war in Ukraine. Infosys quickly moved to close its Moscow operations after the news emerged, but it was a bad look for the Chancellor in the meantime: as he appealed to UK companies to end investments in Russia, his household was profiting from business operations there. 

This is, of course, not really about Rishi Sunak’s wife, but how appropriate he would be as party leader one day. Labour figures have been saying privately for some time that voters won’t mind how rich Sunak is but that he is so far removed from the lived reality of most voters that it would eventually lead him to political miscalculations. The Spring Statement is that big miscalculation, they believe.

And Conservatives are starting to agree. As the Times columnist Clare Foges puts it: “I don’t think that the British public would be allergic to a plain old millionaire prime minister. Someone in the 1 per cent or even the 0.1 per cent would be fine, but by my calculations Sunak’s family fortune puts him in at least the 0.001 per cent, and this is probably too far from the people he would lead.”

Rishi Sunak’s approval ratings have plunged to a new low, and his chances of becoming prime minister look more distant than ever. But, as the latest controversy around the Chancellor and his family’s finances broke last night, Conservatives were asking themselves: who are the “two people familiar with her financial arrangements” who were in a position to know, and leak, the information to the Independent in the first place – and is it possible they are within the Conservative Party? While there are plenty of sources who might want to highlight Sunak’s financial affairs, the suspicion within Conservative ranks is proof that the contest to succeed Boris Johnson hasn’t completely gone away, and no one would be surprised if it got a bit nasty.

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