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The Sunak family firm

Being the wealthiest man in parliament hasn’t damaged Rishi’s image yet, but that may now change

Artillery Row

While sleaze has been a defining feature of the Johnson years, Rishi Sunak has largely escaped it. Perhaps helped by the fact that the outgoing prime minister has been the source and target for so much gossip and investigation, Sunak meanwhile ascended rapidly from being a relatively junior minister to running the Treasury in a crisis. He was subjected to little of the rigorous scrutiny to which other prominent Tories have been subjected. 

His image only started to crack in April, as economic crisis invited criticism and his wife’s non-domicile status was exposed by the press. But now that Sunak is aiming for the top job, the scrutiny is only going to increase, and with it the potential for further damaging stories. 

At the centre of the ex-Chancellor’s vulnerability are his family connections. Sunak’s great wealth (he and his wife are estimated to have a net worth of £730 million) stems in large part from his in-law’s ownership of the IT services giant, Infosys, which was founded by Narayana Murthy — the father of Sunak’s wife, Akshata Murthy. 

Infosys is an Indian-based IT services contractor. Like many large global corporations, Infosys is heavily involved in lobbying. One of their top lobbying issues is relaxing immigration rules. Often they lobby as part of a co-ordinated group of Indian IT giants, through an Indian-based lobbying organisation called Nasscom. 

As well as aggressive lobbying, Infosys uses a team of lawyers to find loopholes in immigration restrictions. US state governments have repeatedly sued them for their immigration practices. For instance, according to the former New York Attorney General, Eric T. Schneiderman, “two years ago, Infosys paid $1 million in settlement for systematically abusing US visa rules in placing foreign workers at client sites in New York state”. 

As Chancellor, Sunak personally pushed for (and got) fast-track visas for tech workers. These are the same kind of visas that Infosys and Nasscom had been lobbying for since at least 2015. These include light-touch visas for tech workers and “elite” graduates. On top of this Sunak has been proposing even more fast-track visa programmes for IT companies and their staff. 

There may well be sound economic reasons why a British Chancellor should push for high skilled immigration, but given his family’s relationship with Infosys, he will have to work hard to escape the perception of a serious conflict of interest. 

This could prove potent ammunition

Given the potential bitterness of both the leadership contest and a future general election (were Sunak to become PM), this could prove potent ammunition to opponents looking to appeal to both the “red wall” and the Conservative grassroots. Immigration has consistently come at or near the top of polls as the number one issue for Tory voters. There is enormous frustration among Brexiteers that having closed off European immigration; Johnson’s government has pursued a permissive immigration policy

So far, it is Johnson and the home secretary, Priti Patel, who have borne the brunt of lax immigration policies. Given the damage it did to Johnson, how is Sunak going to defend his interventions on the issue, or respond to accusations of a personal interest? 

Nor is this the only aspect of Sunak’s time in government that is likely to invite hostile questioning. 

After the pandemic, a windfall tax was proposed for tech businesses that made super-normal profits during the pandemic. Such a tax was popular globally and supported by numerous organisations, including the IPPR and Oxfam. Parliament’s Treasury Committee looked into it and came to a favourable conclusion, advocating it as a better alternative to other forms of taxation. After a review by such a powerful Parliamentary committee, surely such a proposal would have been before the eyes of ministers, especially in the Treasury? Yet it never resurfaced. 

Tech businesses have cashed in

Sunak was willing to push through a windfall tax on oil and gas companies. A pandemic excess profits tax would have been even fairer than the energy windfall tax; as energy companies are making big profits now but made huge losses during the pandemic. By contrast, tech businesses have cashed in, making billions from a global catastrophe.

A pandemic windfall tax would have raised at least £10 billion, versus an estimated £3 billion for the energy windfall tax. And it would have been far more popular than the National Insurance hikes. It could have been coordinated globally, giving President Biden the sort of global tax consensus he has been looking for. 

Why one tax and not the other? Could the chancellor have vetoed the idea? The choice may be economically defensible, but again he risks the appearance of a conflict of interest. 

Then there are issues like the enormous government contracts handed to Infosys. Or the fact that Infosys was a prime beneficiary of the 2021 trade deal with India. Meanwhile, non-dom fees and tax rates have been kept flat for over five years. That has handed many of Britain’s richest residents a hefty real terms tax cut — something the rest of us can only dream of.

Sunak’s predecessor and his wife were both erstwhile non-doms. 

It does give us a foretaste of what may lie ahead

Rishi Sunak may be a man of the utmost integrity and all these examples may just be unfortunate coincidences. Yet it does give us a foretaste of what may lie ahead. Sunak is not separated from his family’s wealth and his business interests. Should he become prime minister every decision he makes will be judged by opponents and the media through the prism of his family’s fortune. Every tax cut or business-friendly policy risks being tainted by this perception. Every contract and trade deal will be intensively scrutinised.

Rishi Sunak began his leadership pitch by saying, “Family is everything to me”. That’s an admirable sentiment, but it may play less well when the British press start running stories on the family firm. 

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