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Sunday, September 24, 2023

Chris Mason: Can Nadhim Zahawi survive tax row inquiry?


“It’s a political tragedy.” One long standing Conservative figure is reflecting on the political pickle Nadhim Zahawi finds himself in.

“He set up an incredibly successful polling company. He knows just how opinion polls work and what you can read into them. He’s a great organiser. It makes him an ideal party chairman,” they add.

But there’s a “but” coming.

“But this is really difficult. How can he function as party chairman with all this going on? Talk to rich donors who are scrupulous about their taxes? Talk to the grassroots?”

Mr Zahawi insists: “I’m confident I acted properly throughout.”

The former Tory minister Caroline Nokes has told the BBC her party chairman should “stand aside” while an inquiry by the prime minister’s ethics adviser takes place.

But others say this is impractical: Were he to do so, there would have to be a temporary replacement, who may find themselves replaced were Mr Zahawi to be exonerated.

  • Tory MP urges Zahawi to stand aside during inquiry
  • Key questions about Zahawi’s tax affairs
  • Who is Nadhim Zahawi?

“Once you get off the roundabout it is hard to get back onto it,” it was put to me.

“I love him, but patience really is running thin” a minister says.

There’s a sense he has mucked up and defending him is difficult.

And part of that is the degree to which MPs say privately the whole thing looks so otherworldly: for millions of people who pay tax as they earn, the idea of accountants and complex arrangements seems hard to relate to.

And for many businesses with experience of filing tax returns, the sums involved here, settling a bill and penalty of around £5m, seem off the scale compared with their own lives.

Another minister goes as far as to say they feel it “doesn’t pass the smell test;” that there were no excuses for ending up having to pay a penalty to the tax authority and not getting things right in the first place.

And enter next Lord Evans of Weardale, the Chairman of the Committee on Standards in Public Life.

‘Too nice’

He’s told BBC Radio 4 that reports Mr Zahawi threatened some journalists with being sued if they reported on his tax affairs don’t match with the behaviour “the government has committed itself to”.

“The sort of attempts, apparent legal attempts to suppress this story… I don’t think that does live up to the sort of standards that the public would rightly expect.”

So how soon might all this be sorted out, one way or another?

It is the job of the recently appointed Independent Adviser on Ministers’ Interests, Sir Laurie Magnus, to determine if Nadhim Zahawi broke the rule book of being in government, the ministerial code.

And here are those rules, against which Mr Zahawi will be judged.

One senior MP told me the prime minister had been “too nice” in asking Sir Laurie to look into things, and could have just sacked Mr Zahawi.

Another countered that the government had been criticised for not having an ethics adviser until his appointment last month, so you might as well use him when an incident like this flares up.

Downing Street have said the inquiry was requested because of “potential breaches of the ministerial code” based on what the prime minister’s official spokesman called “ministerial declarations”.

In other words, what Mr Zahawi did and didn’t say about his tax affairs.

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At Prime Minister’s Questions last week, Rishi Sunak told the Commons his party chairman had addressed the issue of his tax “in full”. But it turns out he hadn’t.

Downing Street didn’t learn until the weekend that he had in fact paid a penalty to HM Revenue and Customs as well as an outstanding tax bill. And then it asked Sir Laurie to look into it all.

So what is in the rules that could prove tricky for Mr Zahawi?

It’s for the adviser to advise and then the prime minister to decide what to do. But let’s take a look.

“Holders of public office should act and take decisions in an open and transparent manner. Information should not be withheld from the public unless there are clear and lawful reasons for so doing,” are two sentences that jump out.

“Ministers must ensure that no conflict arises, or appears to arise, between their public duties and their private interests” is another.


Nadhim Zahawi says he looks forward “to answering any and all specific questions in a formal setting to Sir Laurie” but isn’t being drawn into saying anything else publicly while the inquiry is carried out “in order to ensure the independence of this process”.

So when will Sir Laurie by finished?

Downing Street wants it done “swiftly.”

One senior figure well placed to know the hoped for timetable told me it could be done within a week.

Let’s see. These things have a tendency to trundle on.

There is no doubting the appetite among Conservative MPs to get this sorted one way or the other and quickly, so the focus can turn to something, anything, else.

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