Tory MP Sir John Redwood has said it would be wrong to scrap the non-dom tax scheme amid outrage over the disclosure of Rishi Sunak’s wife’s tax status.
The Chancellor’s wife, Akshata Murty, daughter of a billionaire, is estimated to be worth hundreds of millions.
She has non-dom status due to her Indian citizenship.
With the rest of the British public being plunged into a cost-of-living crisis amid tax hikes implemented by Mr Sunak, Labour slammed the revelation as an example of "breathtaking hypocrisy".
Sir John, however, defended Ms Murty and the non-dom scheme, telling GB News: “I think it's a good idea that we can attract people who got wealth based on past success to come to the United Kingdom.
Sir John Redwood speaking to GB News
GB News
Chancellor of the Exchequer Rishi Sunak alongside his wife Akshata Murthy
Ian West
"They often then set up businesses, invest in businesses, create jobs, or they spend a lot of money here which creates jobs for other people."
He continued: “We are an open society, we encourage a lot of people of all income levels to come to our country, It would be wrong to stop the rich coming.
"If having sensible tax arrangements attracts more people to come here to invest and spend here I think that's a good thing.
"And I do not see why we have any right to tax their past wealth, legally accumulated somewhere else and still held outside the country."
The MP for Wokingham added: "But if they decide in due course to cease being non-doms and becoming full-doms, then of course they will repatriate that wealth as well and they get even more tax from it."
A spokeswoman for the Chancellor’s wife said Ms Murty’s Indian citizenship is key.
She said: “Akshata Murty is a citizen of India, the country of her birth and parent’s home.
“India does not allow its citizens to hold the citizenship of another country simultaneously. So, according to British law, Ms Murty is treated as non-domiciled for UK tax purposes.
“She has always and will continue to pay UK taxes on all her UK income.”
Mr Sunak said his wife was the victim of smears and pointed the finger at the Labour Party.
Allies of the Chancellor also suggested the information may have been leaked by No 10, but Downing Street denied this.
Mr Sunak said it was “unpleasant” to read attacks on his wife, “especially when she hasn’t done anything wrong”.
He told The Sun: “She hasn’t broken any rules. She’s followed the letter of the law."
Sir John added: "It's all perfectly legal and I think those politicians who attack other politicians through their wives and families are doing exactly the wrong thing in democratic politics."
He continued: "There are always people who don't want to better off people coming to our country living here, but I think that wrong.
"I think we are a tolerant and welcoming country and if people are very keen to come and live here and they meet the legal qualifications, then we shouldn't stand in their way."