Zahawi must resign now, insists Cabinet colleague

Senior Tories signal that support for embattled party chairman over tax wrangle is draining away

NADHIM ZAHAWI should resign over his handling of his tax affairs, one of his Cabinet colleagues has told The Sunday Telegraph.

In a sign support for the beleaguered Conservative Party chairman is rapidly draining away, the minister told The Telegraph last night: “I think he’s got to go.”

However, the minister said Rishi Sunak was still right to refer Mr Zahawi to his independent ethics adviser, Sir Laurie Magnus, rather than summarily firing him.

“If he’d have sacked him you’d have had the constant refrain of, ‘It wasn’t natural justice’,” they said.

“What is the point of having an ethics adviser if there’s perceived to be ambiguity that they can’t do the job?”

Mr Zahawi is under mounting pressure after it emerged he paid a penalty to HMRC over previously unpaid tax while he was Chancellor, as part of a multi-million pound dispute. There are fears among Tory MPs that the longer the controversy drags on the more damage it is doing to the party.

A former Cabinet minister also said it was crucial that Mr Zahawi “steps down as quickly as possible”. “Given that he’s not volunteering, then I think that he ought to be told,” they added.

They said that the position of Britain’s top civil servant, Simon Case, was also untenable, amid claims he provided poor advice to the Prime Minister over Mr Zahawi’s appointment.

The Cabinet Secretary is also facing questions about his apparent role facilitating and clearing a loan facility of up to £800,000 for Boris Johnson.

The MP said: “I would be surprised if he lasted much longer. To be honest, Rishi needs to look at Case as a matter of urgency, because he’s not doing him any favours at all. He needs to listen to the advice I’m sure he’s getting from senior colleagues now… to get rid of Case and get himself a better operator at the centre of government.”

The Sunday Times reported that Mr Case formally advised Mr Johnson to stop asking Richard Sharp, his pick for the job of BBC chairman, for “advice” relating to “personal financial matters” days before he was announced as chairman. Mr Sharp is reported to have previously met with Mr Case in order to arrange a loan guarantee that was provided by Sam Blyth, a distant relation of Mr Johnson’s.

An ally of the Prime Minister compared Mr Case to Gavin Williamson, the former education secretary often cited as a Machiavellian figure in Tory circles. “Some of the commentaries around him being a master of the court rather than a government delivery person, are true,” the ally said. “One suspects there’s similar DNA to Gavin Williamson.” They said it might benefit Mr Sunak to “have a traditional mandarin taking over”.

Figures in the Labour Party also believe Mr Case’s days are numbered.

Asked whether the party would be able to deal with him if Labour win the next election, a senior Labour MP said: “He won’t be there by then. He won’t be there by the autumn.”

An ally of Mr Case insisted that he had not involved himself in Mr Johnson’s finances, saying he only gave advice to the former prime minister. The senior Whitehall source insisted that Mr Case’s relationship with Mr Sunak was strong and dismissed claims that he would soon leave his post.