This article originally appeared in our Elevenses newsletter.
Good morning. One thing I have learned in a year or so of writing this newsletter is that lofty predictions get you nowhere. There’s a strange paradox in British politics at the moment. It is perpetually gripped by crisis, yet oddly stable. Everything is on fire all of the time and yet nothing ever changes. So, as a writer who has – several times – pronounced the demise of Boris Johnson and – several times – been proven wrong, I shall this week resist waving Rishi Sunak goodbye.
Still, it’s worth a little recap. Since we spoke last, Sunak has referred himself to Lord Geidt, the prime minister’s ethics adviser, who will examine his interests and declarations. Top of the watchdog’s list are the tax affairs of the chancellor’s wife, Akshata Murthy, who belatedly announced over the weekend that she will start paying tax on her overseas income following a furious row over her non-domicile status. It won’t be a small bill, either. The BBC estimates that she has avoided handing HMRC some £2.1 million a year.
There’s a lot of other stuff, too – like Sunak flashing his bedroom eyes at Silicon Valley and his “friends” briefing the Sunday papers that he might quit parliament before the next election and head for Santa Monica (where he just happens to have a £5.5 million house). But, given Westminster’s unfortunate habit of leaving one scandal in the rearview mirror as soon as a new one comes along, I think it’s worth dwelling on just how bonkers it is that we’ve had a non-domiciled billionaire living in Downing Street for two years.
As we all know by now, claiming non-dom status confers significant tax advantages. But who are these people? A timely piece of research from Warwick and the LSE helpfully tells us. There aren’t that many non-doms in Britain (around 70,000, give or take). However, depending on the circles you roll in, you’d be forgiven for thinking that figure is far higher. One-in-five top earning bankers – and two-in-five of those with annual income over £5 million – are non-doms. That’s compared with the less than three-in-1,000 who have claimed non-dom status while earning less than £100,000.
Unsurprisingly, most of them live in London. Your chances of bumping into a non-dom increase significantly if you take a stroll through, say, Belgravia. More than one-in-ten adults living in Kensington and the Cities of London and Westminster are non-doms. Most non-doms come from Western Europe and the US – and, since 2001, there has been a sharp spike in the number of non-doms from China, the former Soviet states and India. The researchers concluded that there is “compelling support” for the “public perception that non-doms are part of a global economic elite”.
None of what the chancellor and his family have done is illegal. They simply took advantage of a set of rules in this country that exist to help people with exorbitant amounts of money. But that doesn’t mean it isn’t wrong – especially when the person benefitting from those rules is responsible for the public finances of a state enduring an unprecedented collapse in living standards, which they have done little to alleviate. Every pound of tax that people like Murthy avoids takes money out of the pockets of the people who really need it. For a chancellor who is intent on hiking taxes for working people to green-light, excuse and defend such an arrangement is unforgivable.
It should be a nail in the coffin of Sunak’s Icarian political career. But, knowing Britain, it won’t be.
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