Rishi Sunak’s Wealth is a Double-edged Sword; the UK Chancellor Must Learn to Wield it Well

LONDON CALLING: UK Chancellor of Exchequer Rishi Sunak and his wife Akshata Murty have insane wealth: No doubt it has given Sunak a foot in politics and accelerated his popularity within the Tory Party. Of course, now, it is a major reason of the massive public discontent and a factor in his plummeting popularity. And it is also the only armour that will help Sunak battle this political turbulence and survive another day, writes Ruhi Khan.

By Ruhi Khan, 13 Apr 2022

Metropolitan Police’s investigations in the parties at Downing Street during the lockdown restrictions have now found Prime Minister Boris Johnson, his wife Carrie and UK Chancellor of Exchequer, Rishi Sunak, in breach of lockdown rules and will now be fined. This is obviously a brutal blow for the Prime Minister who now has to prove that he wilfully did not misled Members of Parliament by repeatedly claiming in Westminster that no rules were broken. With the police now explicitly holding Sunak responsible for Partygate (earlier, all accusations cantered on the No10 couple), what does this mean for the young chancellor?

Sunak emerged in the political arena as a Member of Parliament for Richmond, Yorkshire, in 2015. A meteoric rise saw him serve in the Boris Johnson cabinet as a junior minister in 2019 and then move to No. 11, Downing Street in 2020. Now in the second-highest office in the government, Sunak, was until a month ago seen as a worthy contender for the Tory party leadership and perhaps one day as the first Indian-origin Prime Minister of the United Kingdom.

Forty-one year old Sunak is younger than his contemporaries and the richest of them all. His net worth is estimated at £200 million through several investments he has made with his wife, Akshata Murty, daughter of the Infosys founder Narayan Murthy. Sunak was an investment banker before he become a politician. As an MP, he draws a base salary of £79,468, excluding his Chancellor’s salary of £71,090.

Dishy Rishi

As Sunak gained prominence during the pandemic, his good looks and charm saw many wanting ‘Dishy Rishi’ to be their sole companion during Covid isolation. No, I’m not kidding! I distinctly remember the Chancellors tweet – a picture of him in a grey hoodie at his home study, wishing the prime minister and health secretary a speedy recovery from Covid with the #StayHomeSaveLives in March 2000. The comments below had a generous splatter of ‘hunk’, ‘eye-candy’, ‘alternative to PornHub’.

Even a column in GQ magazine the following month went on to write in explicit detail ‘peoples’ cravings for the spectacled hunk’. But among the generous dose of fetishized content, what emerged as the most enticing factor about Sunak ‘sexy’ personality was that he represented ‘hope’ in the bleak pandemic world.

Sunak was instrumental in the furlough scheme that helped pay the wages of the millions in the UK who found themselves away from the workplace as the country went into lockdown. It provided support to small businesses that would have gone bankrupt with such long closures, gave mortgage holidays to homeowners and gave stamp duty holidays to those investing in property, thus preventing the UK real estate market from crashing.

To ease out the claustrophobia of being trapped within the walls of home, Sunak gave an incentive to step out and celebrate through the ‘Eat Out to Help Out’ scheme in August when the coronavirus numbers went down. The scheme gave diners a 50% discount on their bill (the government paid the other 50%) injecting the much needed cash flow, a lifeline for the hospitality industry and a relief and joy to the caged population.

When evidence of Downing Street Christmas parties made it to the public, there was anger and resentment against the Prime Minister for having one rule for the country (restrictions on spending Christmas with family) and another for the government. As the popularity of Boris Johnson plummeted and calls for him to step down echoed, Sunak was the man most turned to. Sources close to the Chancellor confirm that all preparations were being made for Sunak’s bid for the Tory leadership.

But Boris Johnson seems to have a hide thicker than a mammoth and with the Russian invasion of Ukraine providing a timely distraction, Johnson once again sailed through yet another controversy. And if whispers in the Tory power corridor are to be believed, by putting the spotlight on the Chancellor, the Prime Minister tried to not just deflect the attention from himself but also take out a worthy competitor.

It all began with the Spring Statement last month, in which the government raised taxes (as against election promises), failed to keep energy prices in check and did not do enough to keep the spiralling costs of essentials in check. Britain faces the worst cost of living crisis since 1972 as inflation is expected to hit 8.4% later this year, and the majority of people in poverty today are in fact, working households.

Sunak believed that the anger and fear of the public in dealing with this cost of living crisis could be easily tempered by offering some rebates and (insufficient) support packages in the budget. His inexperience in politics kept him woefully unprepared for the attacks that were soon to follow.

The Infosys connect

The first blow was during a television interview when he was asked that while he, as the chancellor, was urging businesses to cut ties with Russia and the government was sanctioning individuals closer to Kremlin, why was his wife’s business, Infosys still doing business with Russia? Sunak’s wife, Akshata Murty, holds a stake in the Indian company Infosys that has offices in Moscow.

Sunak was caught clearly off guard and mumbled something about his wife not being here to answer it. A clear defence would have been that Infosys presence in Russia is in sync with India’s stand on the war in Ukraine and should not be seen through the prism of British foreign policy. In a statement later, the chancellor clarified his wife is a 0.91% stake holder in the company with no decision making powers.

But this opened a can of worms as journalists began digging deeper into Murty’s affairs with Infosys. Soon it was discovered that Murty earned £11.5 million income in annual dividends from Infosys but paid no taxes in the UK on it. Murty is an Indian citizen and has a non-domiciled status here, which means she does not have to pay any taxes on her international income in the UK. However, she pays an annual levy of £30,000 to the UK government to keep her non-dom status.

After much uproar, Murty agreed to pay tax on her worldwide income for the last year and in the future. In a statement, she said she realised that many people felt her tax arrangements were not “compatible with my husband’s job as chancellor” and she appreciates the “British sense of fairness”. But Murty will hold onto her non-dom status and this will help her avoid an inheritance tax bill in the future of over £275 million.

Let’s be clear that neither Murty nor Sunak broke any laws with this. Almost 70,000 high earners in the UK are non-doms including one in five top bankers and two in five with those earning over £5 million, according to a recently released study by Warwick University and the London School of Economics. But as the country plunges into poverty, knowing that the man responsible for increasing public taxes was using multiple financial tools to avoid paying taxes on his family wealth would obviously garner resentment. While there is nothing illegal in this, it highlights one simple fact: By declaring herself as a non-dom, Murty highlighted that she did not consider the UK as her permanent home.

Where is ‘home’?

Add to Murty’s declaration that ‘India remains the country of my birth, citizenship, parents’ home and place of domicile’, the discovery that Sunak held onto his United States green card for six years after becoming an MP of which 19 months he was a chancellor had raised questions of where Sunak considers home. Green card holders declare US as their home and pay taxes in the US on their worldwide income. The Liberal Democrats are calling for an investigation into whether Sunak breached any immigration regulations as American residents are banned from voting or standing in foreign elections.

According to No. 11, Sunak had a green card when he lived and worked in the US and from a US immigration perspective, ‘it is presumed that permanent resident status is automatically abandoned after prolonged absences from the US’. Sunak’s spokesperson also confirmed that the Chancellor ‘followed all guidance and continued to file US tax returns, but specifically as a non-resident, in full compliance with the law’.

Sunak and Murty met in the United States during their MBA at Stanford University. After studying Economics and French at the private liberal Claremont McKenna College in California, Murty moved to Los Angles to study at the Fashion Institute of Design and Merchandising followed by a stint in Deloitte and Unilever before moving to Stanford University. An Oxford alumni, Sunak was at Stanford on a Fulbright scholarship. The two married in 2009 in Bangalore.

While both had secured green cards during their time in the USA, it is believed that Murty gave hers up to avoid paying US taxes on international income. So why did Sunak hold onto his for so long? Questions are being raised on whether Sunak considered the US as an option to move back to if his career in UK politics does not succeed. Some are even suggesting that this tremor in his political life would send him packing to California soon.

The couple have four luxury homes: from a £7 million mews house in Kensington to a flat on Old Brompton Road in London; and from a £1.5 million mansion set in 12 acres of land in Yorkshire to a £5.5 million beach penthouse in Santa Monica.

Richer than the Queen

What is repeatedly making headlines and is glaringly audible in public discussions is that Murty is richer than the Queen. Murty’s 0.91% share in Infosys gives her £690m, that is higher than the Queen’s £365m. And in a Britain that has yet to shed its colonial legacy, this is almost unforgivable. A wealthy Brown couple will still be looked as suspect, never mind that the Murthys were self-made while the coffers of the British royalty are filled with treasures stolen from distant lands and that most noble families in the UK built their wealth on the back of the slave trade and colonialization.

Many are not aware that a complex system of financing funds the monarchy every year through what is called the Sovereign Grant to the Royal Household. The monarchy cost the UK taxpayers £69.4million in 2020 and the Sovereign Grant for this year is £86.3 million. So any comparisons between Murty’s and the Queen’s wealth are not just absurd but serve just one purpose – fuel racism!

Sunak and Murty make several sizable donations to elite institutes in the UK. A recent  £100,000 to Winchester College, an exclusive private boy’s boarding school is one of the many. Sunak credits the school for his accomplishments and while this may upset the public who suffer under cuts to state schools, the couple promise their private donation will help provide bursaries to those that cannot afford tuition at the £43,000-a-year school.

Sunak has also been accused of not declaring his investments in full. He had registered a ‘blind’ trust in 2009 that many suspect is in an offshore location and manages their humungous personal wealth. While Sunak is the only chancellor to declare a blind trust (though it was registered when he was a junior minister), at least seven other ministers also hold a blind trust today. In 2015, thirteen ministers had a blind trust managing their investments.

The money speaks

As Boris Johnson’s popularity among the public tanks, the only thing that has kept him secured within the party is his popularity with the donors. One of the largest donations to the Tory party comes from the British Indian billionaire Reuben brothers. Sunak being from the super-rich club, will also ensure that several of the big donors remain on board while getting more to join.

If the Tory Party’s last winter ball is any indication, Sunak is their winning horse. At the auctions, a chance to pay an hour of cricket with Sunak sold for £35,000, the highest. Compare that to other leading members of the Tory party, veteran politician and Levelling-Up Secretary Michael Gove (£25000 for dinner) and the Foreign Secretary Liz Truss, (£22,000 for a karaoke).

British Indians are also important demography that can swing elections in the Conservatives favour, according to a Carnegie study. And more British Indians are likely to vote Tory if Sunak is at the helm. Sunak as a leader will also expand the Conversatives image from a party of ‘white racists elites’ to a more inclusive one without compromising much on their elitists ideals and pro-capitalist conservative ideologies.

But clearly, the thought of a Brown leader is ruffling some white features within the Tory veterans. It is easier to cast a Black Queen and make people fall in love with a Black Duke in a fictional drama like Bridgerton, but opening British politics enough to have a Brown Prime Minister in Brexit Britain will be a herculean task.

Looking at the barrage on onslaught against the Chancellor these past few days, it would be naïve to think that Sunak’s name emerging now in the Met report is simply a casualty of the Downing Street party scandal. All indicators point to a more deliberate attempt to ensure the fastest rising star of the Tory party crumbles and fades away before the next leadership contest.

The next days will test Sunak’s mettle as never before. An ‘unreserved apology’ for breaking the law during the pandemic will not be enough. With the UK now in the dark shadows of the cost of living crisis, the Chancellor needs to once again position himself as the shimmering ray of ‘hope’. If Sunak survives this, there is no stopping him.


Ruhi Khan is a journalist based in London and the author of Escaped: True stories of Indian fugitives in London. She tweets @khanruhi.


Also view: Rishi Sunak questioned over his wife’s stake in Infosys and its Russian links