Chancellor Rishi Sunak has been cleared by Boris Johnson’s ethics adviser of breaching ministerial rules over his wife’s non-dom status and the green card granting him residency in the US.
The prime minister’s independent adviser Christopher Geidt said Mr Sunak had declared his interests correctly and had been “assiduous in meeting his obligations and in engaging with this investigation”.
But Labour denounced the findings as a “whitewash”, with deputy leader Angela Rayner saying: “Downing Street has lost all ethical credibility.”
Mr Johnson asked Lord Geidt to conduct an inquiry following revelations in The Independent about the arrangements which meant his billionaire wife Akshata Murty paid no UK tax on her earnings abroad.
The arrangement, which is likely to have saved Ms Murty many millions of pounds, sparked outrage, coming at a time when her husband was raising the tax burden to its highest point since the 1940s as a share of national income. Ms Murty later announced she was giving up her non-dom status and Labour has since announced plans to abolish it altogether.
In a report published today, Lord Geidt ruled that the non-dom status did not breach the ministerial code of conduct. He revealed that Mr Sunak disclosed his wife’s tax arrangements and her holding in her father’s Infosys company – as well as the green card and the blind trust which oversees the chancellor’s private financial affairs - when he first became a minister.
But he said that not all of them were necessarily published in the register of ministerial interests, such as items which were “not directly relevant or ... do not give rise to a conflict”.
Lord Geidt’s ruling comes as a significant boost for the chancellor, as breaches of the code are normally treated as a resigning matter.
The exposure of his wife’s tax arrangement sparked a collapse in Mr Sunak’s popularity, with the chancellor going from hot favourite to rank outsider in the race to succeed Boris Johnson as prime minister.
The peer stressed that his inquiry related only to compliance with the ministerial code and did not pass judgement on “any wider question of the merits of such interests or arrangements”.
The ethics adviser said that holding a green card – which requires an individual to pay tax in America and commit to eventually settling in the US – was not “an inherent conflict of interest” and “could not reasonably be said to be in tension with the faithful discharge of his duties” as chancellor.
There were no policy changes since his arrival at the Treasury which were relevant to Mr Sunak’s green card status, he found.
And while there were two measures, relating to inward investment and non-dom status, which would impact on his wife’s position, Lord Geidt found that Mr Sunak took steps on each ocassion to avoid conflicts of interest by ensuring another Treasury minister took the lead on decisions of substance.
Meanwhile, it was not deemed necessary to publish details of Ms Murty’s Infosys holding in the register as the company had no contracts with the Treasury during her husband’s time at the department.
Lord Geidt concluded: “I advise that the requirements of the ministerial code have been adhered to by the chancellor, and that he has been assiduous in meeting his obligations and in engaging with this investigation.
“In reaching these judgements, I am confined to the question of conflicts of interest and the requirements of the ministerial code. My role does not touch on any wider question of the merits of such interests or arrangements.”
Ms Rayner said: “It was clear from the start that this report would be an utter whitewash – the government announced the result of this inquiry before it had even started. This report fails to answer the most basic questions and makes a mockery of our democracy.
“Now we know that the government was fully aware of the chancellor’s tax-dodging tactics but failed to inform the public or take any action.
“Given Rishi Sunak’s tax affairs appear to be an open secret in Whitehall, the crucial question is whether the prime minister was aware of these and allowed him to continue running the UK economy, hiking up taxes for working people while potentially benefitting from loopholes.
“The prime minister and chancellor have spent the last few weeks entirely preoccupied with saving their own skins, failing to do anything to address the spiralling cost of living.”
