non-doms

In October 2016, shortly after the Brexit vote, the then-prime minister Theresa May declared in her Conservative conference speech: “if you believe you are a citizen of the world, you are a citizen of nowhere.” That quote spoke to a new type of Tory party, one that was trying to address the angst that May and her team felt had been conveyed by the referendum. Under May – and the influence of her chief strategist and speech-writer, Nick Timothy – the Tory party promised to govern decisively in favour of the UK’s “communitarians”, the nation’s nominal majority of traditionalists, anchored in small homes across the country, and to govern against the footloose minority of socially liberal “cosmopolitans” who dominated Britain’s culture from their enclaves in major cities, particularly London. Rishi Sunak’s success as Chancellor until very recently sprung from his ability to bridge this divide: he was both a poster boy for urban cosmopolitans, who saw in him a socially liberal and socially suave antidote to a distastefully nationalistic Tory party, and an acceptable Chancellor to the country’s communitarians, whom he supported during Covid with the full generosity of the state while donning wellington boots and taking tea on constituency walks as a Yorkshire MP. This week’s revelations – that Sunak’s wife Akshata Murty is a “non-dom”, which allowed her to avoid an estimated £4.4m in UK dividend taxes last year, and that Sunak himself held a US green card until recently – are politically devastating because they create the impression that Sunak has carefully avoided until now: that he is a rootless cosmopolitan for whom the Treasury is merely one international playground among many. No prime ministerial aspirant can afford to look as if they may disown the UK for another country. That is the political damage of Sunak having held a green card, which held no tax benefit for him or his wife (and would, in fact, have been more costly for them). But Murty did avoid tax by not being domiciled in the UK, and, by retaining her non-dom status, she is set to avoid around £200m in future inheritance taxes. We are far from Caesar’s wife being above suspicion. We needn’t suspect that Sunak’s wife was avoiding paying tax into the Treasury run by her husband – we know it. “We all knew that he was minted, and that his wife was even more minted,” a northern Tory MP from a modest background told me. “I don’t think he deliberately went out of his way to conceal any of this, but it’s how it looks when people are struggling to pay their gas bills.” Ten weeks is a long time in politics. On 3 February, when Munira Mirza stunningly resigned as Boris Johnson’s policy chief, Sunak chose not to lend his full support to Johnson that day, telling reporters that he “wouldn’t have” accused Keir Starmer of failing to prosecute Jimmy Savile, as Johnson had in a flailing Commons appearance the day before while fighting for his political life. Sunak may soon rue that comment, which was another attempt to straddle a political divide, in this case between Tory rebels and Johnson loyalists. It is now highly plausible that Johnson could soon remove Sunak from the Treasury. The Prime Minister is known to favour “old, ageing lions” around the cabinet table, not younger and more able rivals. And while Sunak does not now seem to be a political threat, he was once beloved enough that he could conceivably rise again – in January he was the only major UK politician with a positive approval rating. No 10 will, as one MP puts it, be “dancing a jig” after this week’s news. Johnson has fielded questions on Sunak while beaming, remarking that a minister’s family should be kept out of the headlines “if they possibly can be” – a phrase that condones reports more than it condemns them. Johnson is, improbably, ascendant within his party once again. His Tory detractors are despondent. “I’m one of those po-faced individuals on the side lines,” a partygate rebel told me. “Is it necessary to rely on the invasion of another country by a despot [for Johnson] to look good? I suppose that’s how it goes: events dear boy, events.” Although, the MP added, hopefully “there’s bound to be something else that crops up”. That may prove true for Johnson, but it is now hard to see how Sunak’s increasingly ravaged reputation will greatly improve: he cannot, like Johnson, use the international stage to try and change the narrative around him. Having failed to move against the Prime Minister in February, Sunak may soon find Johnson moves against him.

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