Beware of holding Rishi Sunak accountable for his wife’s actions

The phrase “non-domiciled” first entered the public consciousness in 2009, when Zac (now Lord) Goldsmith, then the Conservative parliamentary candidate for Richmond Park, was reported as holding that status.

Labour, then in government and desperate to reverse its slide in the polls under Gordon Brown, made much of the revelation, which was all the more damaging because Goldsmith aspired to become a legislator in Britain’s parliament. His tax status, therefore, was of legitimate public interest.

In a similar – and yet starkly different – way, Akshata Murty finds herself at the centre of the latest “non-dom” controversy to hit the Conservative Party. The wife of the Chancellor, Rishi Sunak, was exposed as a non-dom on the same day that the new, higher, National Insurance rates came into effect, giving both the Labour opposition and Sunak’s internal rivals for the party leadership some cause for celebration. Ms Murty, the daughter of India’s richest man, claims that her tax status derives from the fact of her Indian nationality. One consequence is that her considerable income from India is not taxed here.

The opportunity to exploit the Chancellor’s domestic situation was too much for Labour to resist. Ed Miliband, the Shadow Business Secretary, tried to present a “more in sorrow than in anger” approach to the situation, carefully caveating his remarks lest they be interpreted as an attack on an opponent’s family: “I think we do need to be cautious about people’s spouses being brought into public domain.”

He then went on to bring the Chancellor’s spouse into the public domain: “At a time when people are facing incredibly strained finances and Rishi Sunak is raising taxes, he says to pay for public services, we’ve got his immediate family sheltering a large part of their income from UK taxes.”

The term “immediate family” is disingenuous for a start. Murty is her own woman whose personal finances she and she alone is responsible for. Does Miliband recall why the Government stopped taxing married couples as a single entity and chose to respect their individual, independent status?

Miliband, when he was Labour leader, suffered some pretty harsh and unfair media attacks on his late father, a Marxist academic – attacks which he deemed unconscionable at the time. “I’m not willing to let my father’s good name be besmirched and undermined in the way that the Daily Mail are doing,” he said. “This is not about regulation. It is about right and wrong. It is about the way we conduct political debate in this country. There are boundaries and people must not overstep these boundaries.”

Quite right, Ed.

Obviously the two cases – and the two targets – are entirely different, with very different political contexts. Yet there’s something distasteful about attacking a politician because of the tax status of his wife, almost as if the implication is that Sunak should have put his foot down and ordered his wife’s tax affairs to be set in order at his, not her, behest. At the very least, Miliband’s caveat that “we need to be cautious about people’s spouses being brought into public domain” is a weaselly form of words, no more than a tick-box exercise that allowed him to continue with his attack on Murty, free from accusations of sexism or hypocrisy.

The reason Labour are keen to keep this story going is that it is indeed damaging to the Government and to Sunak personally. How could it be otherwise? There is no good time to admit that clever accountancy techniques are being used to relieve very rich people of the obligations to pay tax that the rest of us take for granted. And there can be little doubt that this controversy will have at least some impact on Sunak’s hopes of one day succeeding Boris Johnson as leader of the Conservative Party. The prospect of justifying or defending Ms Murty’s tax affairs in a national election campaign is not one that will sit easily with many Tory MPs. And in the heat of such a campaign, detailed arguments about a woman’s right to choose her own tax arrangements independently from her husband will count for little and be heard by few.

Still, there are shades of failed strategies from Labour’s past in this. A year after his non-dom status was revealed, Zac Goldsmith was duly elected to Parliament (we shall draw a veil over his tumultuous political career thereafter). Accusing wealthy people of being, well, wealthy, has very little resonance with the wider public, even in more troubled economic times. But allegations of tax avoidance is a different matter and politicians will seek to minimise the sin at their peril. 

The fact that Labour in government never reformed non-dom status as a vehicle for reducing rich people’s tax bills (and still don’t intend to) rather blunts their attack on Ms Murty and her husband. But whatever the inconsistencies and hypocrisies contained in Labour’s attacks, they will have some effect. “One rule for them and another for us” is the opposition’s favourite cliché these days.

And for now, the polls suggest, it’s bringing home the goods.

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