Rishi Sunak must face questions about the fortune he made in a hedge fund that brokered a deal at the heart of the financial crisis, Labor says as it prepares to launch its first major attack on the prime minister ahead of an election debate .
The party aims to turn attention to Sunak’s experience before entering politics days ahead of the first televised debate between the two leaders, following a week of debate surrounding Diane Abbott’s candidacy. On Sunday she confirmed she would run as the Labor candidate.
Key to Labour’s attempts to regain the lead will be an examination of Sunak’s experience as a partner at TCI, the hedge fund that launched an aggressive campaign against ABN Amro that ultimately led to its sale to Royal Bank of Scotland in 2007. The financial regulator called the deal “extremely dangerous” and said it was a key factor in RBS’s failure.
Starmer also pledged on Sunday to reduce net migration by training unemployed Britons for jobs usually held by overseas workers. Shadow home secretary Yvette Cooper told broadcasters it was clear net migration had to fall, although no target had been set.
Starmer and Sunak will go head-to-head on Tuesday in the first election debate on ITV.
Starmer hopes to force Sunak to uncover his past at TCI over their involvement in the sale of a bank laden with subprime mortgages to Royal Bank of Scotland. Separately, Sunak’s boss at the multi-billion dollar fund, Chris Hohn, admitted to a special committee in January 2009 that the fund had shorted British banks during the financial crisis.
Sunak was a partner in TCI when it began promoting the sale of ABN AMRO through its 1% stake in ABN AMRO in early 2007 and lobbied hard for a takeover bid from Royal Bank of Scotland. In October 2007, a consortium led by the Royal Bank of Scotland acquired ABN Amro for £50 billion, the largest acquisition in the history of the banking industry.
Taxpayers spent 45.5 billion pounds to bail out Royal Bank of Scotland, and the independent regulator the Financial Services Authority (FSA) said, “It is clear that the acquisition has undoubtedly had a significant impact on the vulnerability of Royal Bank of Scotland.”
Darren Jones, shadow chief secretary to the Treasury, told the Guardian he believed Sunak had “shorted the UK” before entering politics. “If I were still a member of the Liaison Committee I would certainly be asking about his past behavior because I think it is in the public interest for voters to know that he was essentially betting against the UK and potentially profiting from it,” he said.
“This is exactly the type of behavior in the past that if you become a public official or hold public office, you need to be accountable and transparent about it.”
There is no suggestion that Sunak or TCI broke any rules during the sale of ABN AMRO. But Jones said it was a matter of integrity for a man who later became chancellor and prime minister.
“I think it’s in the public interest that he acknowledges the role he played during this time and that people understand the fact that when they had to live with the consequences of austerity during the Tory-Lib Dem coalition, Rishi Sunak was the The heart of the matter,” he said.
Jones said records showed Sunak was one of a very small team. Within two years of the transaction, TCI had 19 partners.
He said Sunak would know about the deal. “It was the largest banking deal at the time.” The Treasury had previously said Sunak had no direct involvement in the deal.
Responding to the attack, a Tory spokesman said: “This is not true. Labor created the banking crisis which led to the Great Recession. In 2008, when Starmer chose to defend terrorists in foreign courts , Rachel Reeves was part of the HBOS mortgage team that had to be bailed out at a cost of tens of billions of dollars by taxpayers, resulting in thousands of families being forced from their homes.
The BBC announced on Sunday night that the second leaders’ debate is scheduled for June 26, the final week of the campaign. Labor is unlikely to agree to any further debate on its leader.
Labor is also hoping to see an end to the candidate selection debate that dominated the news agenda last week, although ousted Chingford and Woodford Green candidate Faiza Shaheen is still considering legal action.
On Tuesday morning, Labour’s national executive committee will rubber-stamp all candidates, including a string of Starmer’s key allies. Starmer said last week she was free to stand in Hackney North and Stoke Newington after being forced to reverse a reported plan to engineer Abbott’s retirement.
Her close friend Shami Chakrabarti raised the possibility that Abbott could still retire and said they encouraged her to consider her political future. Abbott confirmed on Sunday afternoon that she would stand again as an MP with the party’s support.
