Rishi Sunak must face questions about the fortune he earned at a hedge fund which engineered a deal at the heart of the financial crash, Labour has said, as it prepares to launch its first major attack on the prime minister ahead of the election debates.
The party aims to turn the spotlight onto Sunak’s time before politics in the days before the first TV debate between the two leaders, after a week dominated by rows over Diane Abbott’s candidacy. On Sunday, she confirmed she would stand as Labour’s candidate.
Key to Labour’s attempt to get back on the front foot will be to scrutinise Sunak’s time as a partner at TCI, the hedge fund which launched an activist campaign against Dutch bank ABN Amro which resulted in its sale to RBS in 2007. The takeover was later described as “an extremely risky deal” by the independent financial regulator which said it was a key factor leading to RBS’s failure.
Starmer also on Sunday promised to cut net migration by training unemployed Britons to do jobs normally taken by overseas workers. The shadow home secretary, Yvette Cooper, told broadcasters that it was clear net migration must come down, though stopped short of setting a target.
Starmer and Sunak will go head-to-head on ITV at the first election debate this Tuesday.
Starmer hopes to force an interrogation of Sunak on his past at TCI, after their involvement in the deal that saw a bank riddled with sub-prime mortgages sold to RBS. Separately, Sunak’s boss at the multi-billion fund, Chris Hohn, admitted to a select committee in January 2009 that the fund had bet against British banks during the crash.
Sunak was a partner in TCI when it began pushing the sale of ABN Amro via its 1% stake in the Dutch bank in early 2007 and lobbied heavily for RBS’s takeover bid. The RBS-led consortium bought ABN Amro for £50bn in October 2007 – the biggest takeover in banking history.
The taxpayer spent £45.5bn bailing out RBS and the independent regulator, the Financial Services Authority (FSA), said “it is clear that the acquisition undoubtedly contributed significantly to RBS’s vulnerability”.
Darren Jones, the shadow chief secretary to the Treasury, told the Guardian he believed Sunak had “bet against Britain” during his time before politics. “If I was still a member of the Liaison Committee, I would definitely have been asking questions about his past behaviour, because I think it’s in the public interest that voters know that he essentially bet against Britain and may have profited off the back of it,” he said.
“This is exactly the type of past behaviour where if you become a public official or you come into public office, you need to be accountable and transparent about that.”
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 the integrity of the man who became chancellor and then prime minister.
“I think that there is a public interest in him fessing up about his role during this period of time and people understanding the fact that when they were having to suffer the consequences of austerity that followed under the Conservatives and Liberal Democrats in coalition years, that Rishi Sunak was at the heart of this problem coming up in the first place,” he said.
Jones said records show Sunak was one of a very small team. TCI had 19 partners during the two years the deal took place.
He said that Sunak would have been aware of the deal. “This was the biggest banking deal at the time.” The Treasury has previously said Sunak did not have a direct role in the deal.
A Conservative spokesperson said in response to the attack: “This is not correct. The Labour party created the banking crisis which caused Labour’s great recession. In 2008, whilst Starmer chose to be in a foreign court defending terrorists, Rachel Reeves was part of the mortgage team at HBOS that had to be bailed out by the taxpayer at a cost of tens of billions and turfed thousands of families from their homes.”
The BBC announced on Sunday night that the second of the leaders’ debates had been scheduled for 26 June – the last week of the campaign. Labour is unlikely to agree to any further debates for the party leader.
Labour will also hope to see the end of the rows over candidate selections which dominated the news agenda last week, though the 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 of the candidates, which include a string of key allies of Starmer. Last week, Starmer was forced to u-turn on a reported plan to engineer the retirement of Abbott and said last week she was free to stand in Hackney North and Stoke Newington.
Her close friend Shami Chakrabarti raised the possibility Abbott could still retire, saying she was being encouraged to think about her political future. Abbott confirmed on Sunday afternoon she would stand again as an MP, with the party’s backing.
