Politically naive and seduced by own PR, Rishi was heading for fall

DAN HODGES: Politically naive and seduced by his own PR, Dishy Rishi was always heading for a fall

A couple of weeks ago, after Rishi Sunak had just delivered his Spring Statement, I was talking with a Minister. The Chancellor’s colleague was trotting out the requisite praise. Then he asked what my take was. ‘It will unravel,’ I said.

He looked at me as if I had grown two extra heads. ‘What makes you say that?’ he asked incredulously. ‘Because Rishi’s a bad politician, he’s a bad Chancellor and he’s heading for a fall,’ I replied. ‘And the fact you guys can’t see that is a problem.’

This weekend, Westminster is reeling at the Chancellor’s Icarus-like descent.

Why? His headlong plunge into the Downing Street tarmac has been as certain as night following day. Just look at the way Sunak – touted by his supporters as the Government’s premier communicator – has managed in the space of 72 hours to torch himself, his Government, and his wife Akshata. 

When it first emerged last Wednesday that she was a non-dom, the revelation was embarrassing, but wholly defensible. She was an Indian national. She paid the full, legal amount of UK tax. Non-dom status was not some mysterious loophole, but an established principle of British tax policy.

Just look at the way Sunak – touted by his supporters as the Government’s premier communicator – has managed in the space of 72 hours to torch himself, his Government, and his wife Akshata

But instead of relying on these simple facts, Team Sunak adopted a different approach. They lied. They claimed India does not allow its citizens to hold joint nationality, and so Mrs Sunak had no option but to claim non-dom status. The statement was demonstrably false, and was quickly exposed.

So Sunak decided on a different approach. Self-righteous petulance. ‘To smear my wife to get at me is awful. She loves her country like I love mine,’ he raged.

‘She has investments and a career independent of me.’

This proud defence of his wife’s independence lasted about 12 hours. Then a third statement was hurriedly issued.

 ‘I understand and appreciate the British sense of fairness and I do not wish my tax status to be a distraction for my husband or to affect my family,’ Mrs Sunak announced, ‘for this reason, I will no longer be claiming the remittance basis for tax.’

Let’s just reflect on this for a moment. In the same week the Chancellor introduced the biggest tax hike since the 1940s, perpetuating the worst squeeze on living standards since the 1950s, he cobbled together a plan that involved his wife spending millions of pounds digging him out of a political hole of his own making.

As people struggle to turn on the heating and put food on the table, Rishi Sunak opted to publicly use her fortune to attempt to buy himself a political reprieve, and ultimately, the keys to Downing Street. And this is the man the Conservative Party believes has the political and economic acumen to guide them to victory at the next Election. But it’s not just about what people inside politics are calling ‘the optics’ – the impression of wrongdoing. The Sunak Scandal is much worse.

Let’s just reflect on this for a moment. In the same week the Chancellor introduced the biggest tax hike since the 1940s, perpetuating the worst squeeze on living standards since the 1950s, he cobbled together a plan that involved his wife spending millions of pounds digging him out of a political hole of his own making

Just as Sunak was passionately declaring his love for his country, a new revelation broke. After another day of stonewalling, a Treasury spokesperson finally admitted Sunak had been a US Green Card holder, and had been so for a full 19 months after being appointed Chancellor. To understand the full import of all this, it’s important to appreciate the following facts.

The Green Card – which grants the bearer a right to live and work in the US – is technically known as a Permanent Resident Card. Which means that for 19 months, the Chancellor of the United Kingdom was secretly a permanent resident of a foreign state. And getting a Green Card isn’t like simply getting a visa stamp. It is one the world’s most prized possessions. 

To billions of people, it represents nothing less than the opportunity of a new life. Every week people die trying to secure one. It is a privilege, granted by the US Government. And Rishi Sunak was beholden to the US authorities for granting him that privilege. And that privilege comes with obligations. The holder is required to obey all the laws of the US and her localities. They are required to file tax returns, report all income and pay tax to the US Internal Revenue Service.

As people struggle to turn on the heating and put food on the table, Rishi Sunak opted to publicly use her fortune to attempt to buy himself a political reprieve, and ultimately, the keys to Downing Street

From the moment he became Chancellor, Sunak was responsible for negotiating with the US on behalf of the British people. For example, over a post-Brexit trade deal, which we are told is the most important in British history. 

Over global tax rates. Over everything from agriculture and food tariffs, through healthcare and drug pricing, to digital trade and services. So while Sunak was supposedly trying to drive the best deal for the British people, he was secretly holding discretionary permanent residency of the foreign state he was negotiating with. He was secretly obliged to file tax returns to the foreign state he was negotiating with. And he was secretly under obligation to pay taxes to the foreign state he was negotiating with.

It’s difficult to think of a more direct and egregious conflict of interest for a senior UK Government Minister. Staggeringly, his allies still can’t see how wrong this is. Yesterday, I was told by a spokesperson for the Chancellor that he had observed all aspects of the Ministerial Code. When I asked how it could be the case that holding permanent residency of a foreign state was allowable, I was told that Sunak had declared it in 2018 to the Cabinet Office, as per the rules.

Another defence is that he had allowed his Green Card to ‘lapse’ once he had stopped living and working in the US. But that doesn’t align with the fact he kept it for 19 months as Chancellor, and was required to submit regular tax returns in order to retain it.

In view of the fact that while in office, George Osborne and David Cameron published their personal tax returns, I asked the Chancellor’s spokesperson if Sunak had ever done the same or was planning to

It also doesn’t align with Sunak’s long-term ambitions. A number of his colleagues tell me that they believed his plan was to ultimately move to the US with his family.

In her statement, his wife said: ‘My daughters are British. They are growing up in the UK.’ But she pointedly omitted the fact they are in fact dual British/US nationals.

A final defence from Sunak’s allies is that he has always been transparent when declaring his financial affairs. ‘It’s well-known within the Cabinet Office that Rishi ‘over-declares’ on his interests,’ a friend told me. But that’s not the case. No one publicly knew of his Green Card status until it was leaked. And that’s before considering the issue of his private tax details. In view of the fact that while in office, George Osborne and David Cameron published their personal tax returns, I asked the Chancellor’s spokesperson if Sunak had ever done the same or was planning to.

No,’ they responded, ‘because he is not required to. Neither is the Prime Minister or any other member of the Cabinet.’

Above all, by focusing too much on his own personal ambition, he has lost sight of the big picture, lost control of the economy, and placed the Government of which he is a member in serious jeopardy. It’s taken ages for Conservative MPs to see this. But they can now. And so can everyone else

So Rishi Sunak’s constituents can’t have sight of his tax returns. Nor can the British people. But a foreign state – with whom he is involved in vital and sensitive negotiations – can. And let’s remember precisely whose administration Rishi Sunak was negotiating with. Donald Trump’s. Imagine if Trump had learnt the British Chancellor was secretly a US permanent resident, and information about his private tax affairs were sitting in his American tax system files.

Information that is still sitting there, and will be the day after the next US election.

Rishi Sunak’s position has become completely untenable. But then it has been for some while. For too long, people have been taken in by the huge branding operation that surrounded ‘Dishy Rishi’. In truth it wasn’t an advertising hoarding, it was a shield. Strategically placed to hide the truth. Rishi Sunak is a perfectly decent man. But he’s also over-promoted, politically naïve, and seduced by his own publicity.

Above all, by focusing too much on his own personal ambition, he has lost sight of the big picture, lost control of the economy, and placed the Government of which he is a member in serious jeopardy. It’s taken ages for Conservative MPs to see this. But they can now. And so can everyone else.

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