Rishi Sunak’s childcare policy risks conflict of interest with wife’s firm

Rishi Sunak is facing questions over a potential conflict of interest after it emerged a childcare firm part owned by his wife is to benefit from major changes in the budget.

The prime minister’s wife, Akshata Murty, is listed as a shareholder in Koru Kids, a childcare agency. Koru Kids is likely to benefit from a pilot scheme offered by Jeremy Hunt to incentivise people to become childminders, with £1,200 offered to those who train to become one through an agency.

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Sunak did not mention his wife’s interest when speaking about the childcare changes at his appearance before the liaison committee on Tuesday. He was asked by the Labour MP Catherine McKinnell whether he had anything to declare. “No, all my disclosures are declared in the normal way,” he told McKinnell.

It is understood the Cabinet Office was told about Murty’s interest in Koru Kids previously but it was not deemed necessary to appear on the public register of ministerial interests, which was last updated in June 2022.

The register states that Sunak’s wife owns a venture capital investment company, Catamaran Ventures UK Ltd, without going into detail of any of its shareholdings.

Following the reports, first revealed by the i newspaper, the Liberal Democrats called on Sunak to make sure he had not broken the ministerial code in the way that he has dealt with the interest.

Wendy Chamberlain, the Lib Dem chief whip, wrote to Sir Laurie Magnus, the independent adviser on ministerial interests, drawing attention to the ministerial code provision which seeks ministers to ensure “that no conflict arises, or could reasonably be perceived to arise, between their public duties and their private interests, financial or otherwise”, and that they must “scrupulously avoid any danger of an actual or perceived conflict of interest between their ministerial position and their private financial interests”.

“They should be guided by the general principle that they should either dispose of the interest giving rise to the conflict or take alternative steps to prevent it,” the code says.

Chamberlain said: “The prime minister’s family does appear to have a relevant financial interest in Koru Kids – which has benefited from a recent change to government policy. There is a clear question as to whether articles 7.1 and 7.7 of the ministerial code have been breached.

“I therefore urge you to investigate whether the code has been broken; and if it has not, what steps the prime minister took to ensure that no conflict arose. In particular please set out whether he made you or other senior officials aware of the financial interest in Koru Kids when the childcare policy was being developed.”

Magnus is not able to open his own investigations without the permission of the prime minister.

Speaking after prime minister’s questions, Sunak’s spokesperson said he had told the No 10 permanent secretary of any relevant interests when he took the job. The government and independent adviser on ministerial interests will publish an annual statement of all those interests in May.

However, there is a question of whether Commons rules mean he should have declared it when speaking about childcare at the liaison committee. “He has followed the process in terms of declaring his interests as set out in the ministerial code,” the spokesperson said.

It is understood the government considers that a Commons declaration is not relevant in relation to Sunak’s family interest because any potential conflict would already have been addressed and mitigated under the ministerial declaration process.

But Angela Rayner, Labour’s deputy leader, said: “Rishi Sunak must explain why he failed to come clean when asked about the shares his family held in a company now set to financially benefit from a childcare policy announced in his budget.

“He must urgently correct the record and set out what steps he took to avoid an actual or perceived conflict of interest. No proper explanation has yet been provided by the prime minister as to why this was not deemed necessary to publish in the register of members’ interests.”