Rishi Sunak ordered a probe into Conservative Party Chairman Nadhim Zahawi’s tax affairs, as a fresh spate of allegations about financial impropriety in the ruling party undermined the UK prime minister’s pledge to run an administration that’s beyond reproach.
(Bloomberg) — Rishi Sunak ordered a probe into Conservative Party Chairman Nadhim Zahawi’s tax affairs, as a fresh spate of allegations about financial impropriety in the ruling party undermined the UK prime minister’s pledge to run an administration that’s beyond reproach.
“Clearly in this case there are questions that need answering,” Sunak told reporters on a visit to central England on Monday. He said he’d asked Laurie Magnus, the government’s independent adviser on ministerial interests, “to get to the bottom of everything, to investigate the matter fully and establish all the facts.”
Zahawi said Saturday he’d been “careless” with his tax affairs, following a report that he’d paid a £4.8 million ($6 million) bill to His Majesty’s Revenue & Customs, including a 30% penalty for not settling the correct amount at the time.
The flap over Zahawi’s tax affairs weakens Sunak’s promise when he took power in October to run an administration with “integrity” and “accountability” at every level. While Sunak repeated those words on Monday, he’s facing mounting calls to fire Zahawi from opposition parties, with some Tories also beginning to voice criticisms.
Zahawi’s “position is totally untenable and it shouldn’t be a case that we are sitting around waiting for him to resign, the prime minister should be sacking him,” Labour Party shadow cabinet member Lucy Powell told BBC radio on Monday.
Bullying Complaints
The Scottish National Party, the third biggest in the House of Commons, also called on Sunak to fire Zahawi and urged him to conduct a “deep clean” of the Tories. Meanwhile, backbench Tory Peter Aldous on Sunday called on Zahawi to further clarify his tax history and suggested he shouldn’t have been appointed chancellor — a post given to him by then-Prime Minister Boris Johnson.
The matter surfaced when Zahawi was being appointed Chancellor of the Exchequer — a post which oversees HMRC — last July, and was settled by the time he was moved to a different cabinet position in September, he said.
Sunak batted the issue away in the House of Commons last week but his spokesman, Max Blain, told reporters on Monday that he’d decided to open the ethics probe after “additional facts” emerged. Zahawi retains the premier’s confidence, he said.
“I am confident I acted properly throughout and look forward to answering any and all specific questions in a formal setting,” Zahawi said on Monday in a statement. Given the probe, “it would be inappropriate to discuss this issue any further.”
Since coming to office, Sunak has faced questions over his re-appointment of Home Secretary Suella Braverman less than a week after she resigned over a security breach. Gavin Williamson quit the premier’s top team in November over bullying allegations, while Deputy Prime Minister Dominic Raab also faces multiple complaints of bullying.
On Friday Sunak received a fixed penalty notice from police in Lancashire, in the north of England, for failing to wear a seat belt in a moving car. That was his second fine in less than a year following one during the so-called Partygate scandal for breaking Covid-19 rules.
Johnson Questions
To compound matters, Sunak’s predecessor-but-one, Boris Johnson is also facing questions over the appointment of BBC Chairman Richard Sharp, amid allegations he helped Johnson secure a loan just weeks before the then-prime minister recommended him for the role.
“This is rubbish. Richard Sharp has never given any financial advice to Boris Johnson, nor has Mr. Johnson sought any financial advice from him,” Johnson’s spokesman said in a statement.
The BBC ran a statement from Sharp in which he denied there had been a conflict of interest, saying he had put Cabinet Secretary Simon Case in touch with Sam Blyth, the Canadian businessman who the Sunday Times reported earlier this month had provided Johnson with a loan guarantee. Sharp had then had “no further involvement whatsoever,” according to the statement.
‘Not Deliberate’
But Zahawi’s tax affairs will be more of a cause for concern for Sunak, because he remains in a top party role and attends cabinet.
Zahawi, 55, came to the UK as a child refugee from Iraq, and in 2010 co-founded the global polling company YouGov Plc. Questions over his tax affairs first surfaced in July, though at the time he sought to shut down questions on the matter as a personal smear.
Dan Neidle, a former head of tax at City of London law firm Clifford Chance LLP, has continued to press Zahawi and probe his accounts on his blog and on Twitter. He told Sky News on Monday that he estimated Zahawi would have received about £27 million and not paid tax on it.
In a statement issued on Saturday, Zahawi said tax authorities “concluded that this was a ‘careless and not deliberate’ error. So that I could focus on my life as a public servant, I chose to settle the matter and pay what they said was due.”
(Updates with Zahawi comment in ninth paragraph)
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