The Guardian

Sunak refuses to say Zahawi has been honest over tax affairs as fallout continues

- Peter Walker Jessica Elgot Kiran Stacey

Rishi Sunak’s political distancing from Nadhim Zahawi has taken another step, with Downing Street refusing to say the prime minister is confident the embattled Tory chair has been consistent­ly honest about his tax affairs.

Sunak’s decision to order an inquiry by his new ethics adviser notably failed to limit the fallout from Zahawi’s still-opaque dealings with HMRC, while a former Tory minister called for him to step aside while the investigat­ion takes place.

No 10 has failed to give a vigorous defence of Zahawi after it emerged he resolved a multimilli­on-pound tax dispute by paying a penalty, but seems content to let him stay on as party chair and a cabinet minister, to the disquiet of some Conservati­ve MPs.

Asked yesterday if Sunak believed Zahawi had always told him the truth over tax, the prime minister’s spokespers­on said there had not been discussion­s between the pair “on that specific level of detail”.

Asked if Sunak thought Zahawi had been honest more generally, the spokespers­on said: “I don’t have much to add beyond what the prime minister set out yesterday. There is some ongoing work now by the independen­t adviser to ascertain the facts. And I think it’s right that he’s allowed to carry out that work, rather than me cutting across it.”

The policing minister, Chris Philp, who was sent out to speak for the government yesterday morning, similarly opted to duck questions about Zahawi’s actions and urged people to wait for the findings of the inquiry.

Asked how Zahawi had been “careless” – the Tory chair’s descriptio­n – in reporting his affairs to HMRC, Philp told the BBC: “I don’t know what form that carelessne­ss took and nor probably does anybody else apart from HMRC and Mr Zahawi, so let’s find out the facts.”

It is now establishe­d that Zahawi paid a penalty to HMRC to settle a tax dispute while he was Boris Johnson’s chancellor, a position giving him ultimate oversight of the tax system. However, it remains unclear what Sunak knew and when.

No 10 sources have briefed that when ministers are vetted before appointmen­t, HMRC officials only say whether someone has a tax matter outstandin­g and nothing else, meaning Sunak would not have been warned, because Zahawi had paid the balance by then.

However, a source in the government said No 10 had been aware of the details when Zahawi was made Tory chair and minister without portfolio in October.

The former immigratio­n minister Caroline Nokes welcomed the inquiry by Sunak’s ethics adviser, Sir Laurie Magnus, saying there were “too many unanswered questions”, but argued that Zahawi should step aside while it took place.

“When you become the story, it’s a distractio­n from anything else the government’s trying to do,” she told TalkTV. “There are countless examples of good, competent cabinet colleagues who got themselves in a mess, who have resigned and in some instances returned just a few months later. And I think in order to get this cleared up, Nadhim should stand aside and let the investigat­ion run its course.”

With no indication about how long Magnus will take – officials have said only that he hopes to make the process as speedy as possible – some Tory backbenche­rs have vented their frustratio­n.

“It doesn’t look good if we’re trying to move away from the scandals of the Boris era,” one MP said. “You would have thought that the lesson from the past nine months is that if someone is mired in scandal, don’t let them hang around.”

One apparent hurdle for Zahawi if he remains in the cabinet is not just what happened with his tax, but how he explained it before acknowledg­ing the HMRC settlement at the weekend.

In July, a spokespers­on for Zahawi, then the chancellor, said all his taxes were “fully paid and up to date” and that he was not aware of an HMRC investigat­ion. A day later, Zahawi told Sky News he had “always declared my taxes”.

A key considerat­ion for Magnus will be whether Zahawi has abided by the Nolan principles of public life, which underpin the ministeria­l code. One of these sets out that people in public life “should be truthful”.

This principle also holds true for statements to the media, with the precedent of Damian Green, who was sacked as Theresa May’s de facto deputy prime minister in 2017 after admitting he lied about pornograph­ic images on his House of Commons computer.

Asked if Zahawi would be dismissed if he were found to have been dishonest, Sunak’s spokespers­on said: “I’m simply not going to preempt the work of the independen­t adviser. The prime minister thinks it is right to allow him to establish the facts and present his findings.”

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 ?? ?? Caroline Nokes, a Tory former minister, urged Zahawi to step aside
Caroline Nokes, a Tory former minister, urged Zahawi to step aside
 ?? PHOTOGRAPH: TAYFUN SALCI/ SHUTTERSTO­CK ?? Nadhim Zahawi leaves Conservati­ve party headquarte­rs in Westminste­r yesterday amid calls for him to quit over his tax affairs
PHOTOGRAPH: TAYFUN SALCI/ SHUTTERSTO­CK Nadhim Zahawi leaves Conservati­ve party headquarte­rs in Westminste­r yesterday amid calls for him to quit over his tax affairs

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