A core belief in keeping taxes low has guided the Conservative ethos in the UK. As Chancellor of the Exchequer, Rishi Sunak had the lever to the country’s taxation. Now that he has resigned and announced his interest to lead the Tory party, his record and future plans on taxes have the potential to make or break his chances.
An earlier piece by this writer had spoken about how the cost-of-living crisis and impending tax rises in the UK would have led to an intense blame game between Sunak and Boris Johnson. It has now emerged that days before his resignation, Sunak had a showdown with Johnson on the issue of tax – Johnson wanted to cut corporation tax, which was resisted by Sunak.
Taking potshots at Sunak, Johnson’s key ally and Brexit opportunities minister Jacob Rees-Mogg has described him as a “high-tax chancellor” and “much-lamented socialist chancellor”. This is just a sample of what lies ahead for Sunak. For some fiscal purists, Sunak is seen as someone who did not resist Johnson’s demands to lower taxes and as such should be seen as an enabler. Yet, it is hardly a secret that the biggest fault line between No 10 and No 11 - the residence of UK's prime minister and finance minister, respectively - has been on the issue of public spending and taxes.
Sajid Javid and Jeremy Hunt, two other hopefuls, who have been health secretaries – Javid was also Sunak’s predecessor as the Chancellor of the Exchequer – have announced their candidature for the Conservative party leadership with a call to cut corporation tax. The current chancellor Nadhim Zahawi has also promised to lower taxes with an eye on the top job. Which explains why Sunak in his resignation letter mentioned that “Our people know that if something is too good to be true then it’s not true,” in a clear reference on why he pushed for the increase in taxes to finance public spending.
As on Saturday evening (July 9, 2022), Sunak clearly had the backing of more Tory MPs than others who had announced their candidature. Some of the prominent names who are backing him are Mark Spencer, the Commons leader, Robert Jenrick, former communities secretary, Liam Fox, former defence secretary, Oliver Dowden, former Tory chairman. Sunak’s promotional clip has taken the internet by storm, sparking at the same time, conversations that the cheesy video predates his resignation as the chancellor.
According to reports in the British press, it is Sunak who is the foremost target of Johnson and his supporters, who see him as an important architect in the downfall of the (now caretaker) PM’s regime. Johnson has filled up empty ministerial posts with MPs who are his supporters, adding to the headache for whoever takes the mantle. Surprisingly, there has been no announcement from Priti Patel, the home secretary who is considered close to Johnson but had reportedly echoed calls for him to resign. Around a dozen potential aspirants have emerged – others prominent names are Suella Braverman, Penny Modaunt, Liz Truss, Grant Shapps, Kemi Badenoch, Tom Tugendhat – but in the coming days, it is likely that some of them may step down announcing support for others.
A prominent backbencher Steve Baker who had announced his candidature has said he would step down and is instead backing the Indian origin Braverman. Sunak’s team has reportedly asked Javid to back down in his favour. All the aspirants have to garner support from among the Tory MPs who vote till the list is finally whittled down to two. The ordinary Tory members from around the country vote to choose a winner from the final two. The whole process is expected to go on till September 2022.
In the coming days, Sunak’s and his wife’s tax status and the issue of their US green card is bound to come up. Some like Ann Widdecombe, a long-term Tory MP, have already raked up the issue, and it won’t be a surprise if there are more commentaries on that. Akshata Murty, Sunak's wife and Infosys founder N.R. Narayana Murthy's daughter, has declared that she will now pay the tax on her substantial income in the UK and not use the legal route to avoid payment of high taxes in the UK.
Javid is known to keep former Prime Minister Margaret Thatcher’s portrait in his office, while Sunak kept Thatcher’s chancellor Nigel Lawson’s picture at No. 11. Both are prominent Asian-origin figures in British politics with high-profile portfolios in the last few years. What could determine their fate, is whether they have the potential to have a political career as long as Thatcher and Lawson, and more importantly, whether ordinary Tory members see them as worthy enough to have their portraits as true blue representatives of the Conservative party.
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