West Coast Chancellor who wants to turn Britain into ‘San Fran on Thames’
WITH his £335 trainers and white T-shirt and suit combos, Rishi Sunak has always exuded an unusually Californian air for a Tory MP – more West Coast than Red Wall. And according to his Government colleagues, the Chancellor’s mindset is as American as his clothing.
He frequently alludes to his Santa Monica home in Treasury meetings, his children have joint US citizenship and, according to one source, he ‘mentions dollars almost as often as he references pounds’.
More contentiously, some fellow Ministers claim the 41-year-old is too close ‘spiritually’ to the global internet giants which have sprung up in Silicon Valley over the past few decades, leading to a radical reshaping of the global economy. ‘He is always talking about turning post-Brexit Britain into “San Francisco on Thames”,’ says a colleague, ‘while everyone else talks about a “Singapore on Thames”.’
The Ministers argue that this has had an impact on the Government’s approach to regulating the tech giants. When proposed new laws were being drawn up to tackle the anti-competitive behaviour of companies such as Google and Facebook, including the scrutiny of algorithms that discriminate against popular news websites and a requirement to pay media publishers for their content, the Treasury gained a reputation in Whitehall for acting as a block on the proposed reforms.
AKSHATA, who met Mr Sunak while studying at Stanford University, bought the £5.5million penthouse in June 2014 when the couple were talking about settling down in California, only for their plans to change the following year when he entered Parliament for the first time. The Chancellor tries to fly out to the flat, which boasts sweeping views of Santa Monica pier and the Pacific, as often as possible. He had intended to spend last Christmas there, but returned to London just a few hours after arriving in the US when he was informed that, in his absence, Boris Johnson was being pressurised by the Government’s scientific advisers to put the country back into lockdown for the rest of December. After averting the threat, he spent the festive period in Britain while his family celebrated on the beach.
Mr Sunak knows that workingclass voters in critical Red Wall seats, which will determine the next election, are unlikely to sympathise with disruptions to his transatlantic jet-setting – but it undoubtedly contributes to the pressures building within the Sunak family.
Although Downing Street sources are adamant that the tax revelations have not been briefed out by them – the hands of Laboursupporting officials in the Civil Service are again detected – there is little doubt about the tensions between No10 and No11.
The situation was particularly volatile last September, when the Chancellor was, according to senior sources, ‘hours away’ from resigning over the Prime Minister’s plans to reform social care. Mr Sunak was bitterly opposed to Mr Johnson’s demand for him to produce £12billion to shake up the care system, arguing against both the timing – he had already spent more than £400 billion on the Covid crisis – and the details of the policy, which included a cap on costs.
When the Prime Minister insisted on going ahead, Mr Sunak used the applied threat of his resignation to force Mr Johnson to introduce the Health and Social Care Levy to cover the cost through a 1.25 percentage point increase in National Insurance.
The issue triggered a further flashpoint between the pair earlier this year when sources claimed that Mr Johnson tried to persuade Mr Sunak to drop the rise.
Instead, the Chancellor used last month’s Spring Statement to cut fuel duty, tweak tax-free thresholds and signal a cut in income tax in 2024.
The backlash from voters led to a collapse in Mr Sunak’s ratings which, even before the tax revelations, had seriously dented his chances of becoming Prime Minister. The tax revelations emerged on the day the National Insurance rise came into effect, compounding the political damage.
Mr Sunak’s travails have aroused complex emotions in Downing Street. While life for the Prime Minister is easier with a subdued Chancellor, that advantage is offset by the wider damage caused to the Government by the narrative of double standards.
A source said: ‘There will undoubtedly be some schadenfreude in parts of the building as Rishi has been a tricky customer recently. His support during the rows over lockdown parties was conspicuously muted. But it is also a gift for Labour ahead of the local elections, so it is not exactly unalloyed pleasure.’
But if Mr Sunak does leave the Government to spend more time staring at Santa Monica’s sunsets, one man will be rubbing his hands with glee: Levelling Up Secretary Michael Gove, whose friends believe to be the most likely replacement as Chancellor.
It would be another compelling twist in the decades-long JohnsonGove psychodrama.
He mentions dollars almost as much as he references pounds
There will be schadenfreude – Rishi has been tricky recently