Finance

Britain’s finance minister’s rising star is losing some of its shine

Britain's finance minister's rising star is losing some of its shine

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London (AFP) – Britain’s Finance Minister Rishi Sunak is accused of being out of touch with ordinary voters, in a sudden fall from grace just months after he was named the next prime minister.

The 41-year-old Chancellor of the Exchequer star had had the upper hand for his handling of public finances as the coronavirus pandemic devastated jobs and businesses.

But he lost some of his luster following a mini-budget on Wednesday that he said was designed to deal with soaring cost-of-living pressures.

At the same time, he faces embarrassing questions about his billionaire wife and father, whose company has had to downplay its business ties to Russia.

Sunak – who has presented himself as a low-tax conservative – has been branded a “tax illusionist” by a think tank for claiming to cut taxes but allow the overall tax burden to rise.

What he hailed as “the biggest personal tax cut in a decade” actually put taxes on track to their highest level as a fraction of national income since just after the Second World War.

Paul Johnson, head of the Institute for Fiscal Studies think tank, said Sunak had done nothing to protect the poorest by raising welfare benefits in line with inflation.

“He continues, despite his rhetoric, to be a chancellor presiding over a very big increase in fiscal pressure,” he told reporters on Thursday.

“What he did was not even enough to prevent the expected tax burden from increasing even further.”

Sunak’s main policy was a fuel tax reduction of five pence (0.06 euro, $0.07) for one year.

But that reduction was immediately swallowed up by rising fuel prices attributed to market instability blamed on Russia’s invasion of Ukraine.

The chancellor – dubbed ‘Dishy Rishi’ because of his stylish Instagram-ready profile – was later pictured refueling a car at a supermarket petrol station.

But the car in question, a lowly Kia Rio, did not belong to the wealthy former Goldman Sachs analyst, but was borrowed from a supermarket employee.

He then seemed confused as to how to pay for fuel and a can of soft drink at the checkout.

Russia questions

Wednesday’s fallout overwhelmed Sunak, with unfavorable headlines even from normally favorable newspapers.

Sunak was also asked about his wife Akshata Murty’s stake in her father’s company Infosys and her ties to Russia. Tristan Fewings POOL/AFP/File

He also had to fend off questions about his extended family.

On Thursday, he was arrested over his wife Akshata Murthy’s share in Indian IT giant Infosys, co-founded by his father NR Narayana Murthy.

She has a stake in the company worth about $1.0 billion, according to the company’s disclosure to the stock exchange.

As Britain and others sought to economically isolate Russia following its invasion of Ukraine, he was asked if Infosys was reducing its presence there as well.

“I have absolutely no idea because I have nothing to do with this company,” Sunak told Sky News.

“I am an elected politician and I am here to tell you what I am responsible for, my wife is not.”

Infosys itself has said it has committed $1.0 million to war relief efforts, saying it has “a small team of employees based outside of Russia, which locally serves some of our global customers”.

personal wealth

Sunak’s private wealth and the fortune of his in-laws are more than likely to be used as a weapon again by his political opponents, especially in these times of financial difficulty.

He was once dubbed “The Maharajah of the Yorkshire Dales” in a magazine profile, in reference to his rural northern England constituency.

But his background is relatively modest: his father was a doctor and his mother a pharmacist, and he grew up in Southampton, on the south coast of England.

He became the first person born in the 1980s to hold one of the top four jobs in British politics, following a career in finance and a top-notch degree at Oxford University.

Sunak and Murthy tied the knot in 2009, in a relatively modest affair, but the reception was attended by around 1,000 guests, including politicians, industrialists and cricketers.

Murthy’s personal wealth has already raised questions in the British media, with some of her seemingly lavish gifts to her husband, including a £180 ‘smart mug’ and £95 sliders, causing her embarrassment.

The couple, who have two daughters, own at least four properties, including a £7million five-bedroom house in London’s upmarket Kensington district. They also own an apartment in Santa Monica, Calif., and a photogenic dog called Nova.

Murthy dabbled in finance and marketing and in 2010 created her own fashion label.