PM must face questions about hedge fund at heart of financial crash, says Labour | General election 2024

Rishi Sunak must face questions about the fortune he made in a hedge fund that engineered a deal at the heart of the financial crash, Labor said, as it prepares to launch its first major attack on the Prime Minister before the election debates.

The party aims to shine a spotlight on Sunak’s time before politics in the days before the first televised debate between the two leaders, after a week dominated by controversy surrounding Diane Abbott’s candidacy. On Sunday, she confirmed she would run as a Labor candidate.

Key to Labour’s bid to get back on the front foot will be a closer examination of Sunak’s time as a partner at TCI, the hedge fund that launched an activist campaign against Dutch bank ABN Amro that led to 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 pledged to reduce net migration by training unemployed Britons to do jobs normally held by foreign workers. The shadow home secretary, Yvette Cooper, told broadcasters it was clear that net migration needed to fall, although she did not set a target.

Starmer and Sunak will go head-to-head on ITV in the first election debate this Tuesday.

Starmer hopes to force Sunak to be questioned about his past at TCI following their involvement in the deal in which a bank full of subprime mortgages was sold to RBS. Separately, the head of Sunak v multi-billion dollar fund, Chris Honadmitted to a special committee in January 2009 that the fund had bet against British banks during the crash.

Sunak was a partner at TCI when it began pushing for the sale of ABN Amro through its 1% stake in the Dutch bank in early 2007 and lobbied hard for the RBS takeover bid. The RBS-led consortium bought ABN Amro for £50bn in October 2007 – the largest takeover in banking history.

The taxpayer spent £45.5bn to rescue RBS and the independent regulator, the Financial Services Authority (FSA), said it was “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 were still on the liaison committee I would certainly be asking questions about his past behavior because I think it is in the public interest for voters to know that he has essentially bet against Britain and may have profited from it. ” he said.

“This is exactly the type of behavior in the past where if you become a public servant or enter public service, you have to be accountable and transparent about it.”

There are no suggestions that Sunak or TCI broke any rules during the sale to ABN Amro. But Jones said it was a question of the integrity of the man who became chancellor and then prime minister.

“I think there’s a public interest in him speaking out about his role over that period of time and for people to understand the fact that when they had to suffer the consequences of the austerity that followed under the Conservatives and the Lib Dems in the coalition years that Rishi Sunak was at the heart of it,” he said.

Jones said the records show Sunak was part of a very small team. TCI had 19 partners over the two years of the deal.

He said Sunak would have known about the deal. “It was the biggest banking deal at the time.” The Treasury previously said Sunak had no direct role in the deal.

A Conservative spokesman said in response to the attack: “This is not right. The Labor Party created the banking crisis that caused the Great Labor Recession. In 2008, while 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 uprooting thousands of families from their homes. “

The BBC reported on Sunday night that the second of the leaders’ debates was scheduled for June 26 – the final week of the campaign. Labor is unlikely to agree to further debates about the party leader.

Labor will also be hoping to see an end to the row over candidate selections that dominated the news agenda last week, although suspended Chingford and Woodford Green candidate Faiza Shaheen is still considering legal action.

On Tuesday morning, Labour’s national executive committee will rubber-stamp all the candidates, which include a string of key Starmer allies. Last week, Starmer was forced to abandon a reported plan to stage Abbott’s retirement and said last week she was free to run Hackney North and Stoke Newington.

Her close friend Shami Chakrabarti raised the possibility that Abbott could still retire, saying she had been encouraged to think about her political future. Abbott confirmed on Sunday afternoon that he would stand again as an MP with the support of the party.