In a damning report, Sir Laurie Magnus, Sunak’s ethics adviser, said Zahawi had failed “to be honest, open and an exemplary leader through his own behaviour”.
Although he was booted out of the government, he remains the Conservative MP for Stratford-in-Avon.
Lib Dem deputy leader Daisy Cooper has written to the prime minister urging him to remove the Tory whip from Zahawi if he refuses to quit the Commons.
She said: “Nadhim Zahawi failed to pay the taxes he owed, refused to come clean, and then threatened campaigners and journalists with legal action simply for trying to uncover the truth.
“It shows that Zahawi is simply not fit to represent his constituents in Parliament. If he refuses to stand down as an MP, Rishi Sunak surely has no choice but to withdraw the Conservative whip.
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“Sunak dragged his feet for weeks over this scandal. He must now act swiftly if he’s serious about restoring integrity to this sleaze-ridden Conservative government.”
But a source in the Tory whips office pointed to the final paragraph of Sunak’s letter to Zahawi yesterday as proof that the PM plans to stand by his party colleague.
In it, the prime minister said: “I know I will be able to count on your support from the backbenches as you continue to passionately and determinedly serve your constituents of Stratford-on-Avon and represent the many issues and campaigns you are dedicated to.
“Thank you for your service to this and previous governments.”
In his reply, Zahawi also pledged his support to the government.
He said: “You can be assured of my support from the backbenches in the coming years. Your five priorities are the right priorities, and I will do whatever I can to help you deliver them.”
Nadhim Zahawi has been sacked as Tory Party chairman and cabinet minister without portfolio by Rishi Sunak.
The prime minister said there had been “a serious breach of the ministerial code” over Zahawi’s tax affairs.
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“As a result, I have informed you of my decision to remove you from your position in HM government,” Sunak said in a letter to his Tory colleague.
The PM has been under pressure to sack Zahawi ever since it emerged that he had paid a £5 million settlement to HMRC over unpaid tax when he was chancellor last year.
Sunak announced that he was asking his ethics adviser, Sir Laurie Magnus, to investigate the affair.
In his letter to Zahawi, the prime minister said: “When I became prime minister last year, I pledged that the government I lead would have integrity, professionalism and accountability at every level.
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“That is why, following new information which came to light in recent days regarding your personal financial arrangements and declarations, I asked Sir Laurie Magnus, the independent adviser on ministers’ interests, to fully investigate this matter.
“You agreed and undertook to co-operate fully with the inquiry.
“Following the completion of the independent adviser’s investigation – the findings of which he has shared with us both – it is clear that there has been a serious breach of the ministerial code.
“As a result, I have informed you of my decision to remove you from your position in HM government.
″“As you leave, you should be extremely proud of your wide-ranging achievements in government over the last five years.
“In particular, your successful oversight of the Covid-19 vaccine procurement and deployment programme which ensured the United Kingdom was at the forefront of the global response to the coronavirus pandemic.”
Shadow education secretary Bridget Philipson said: “Despite the writing on the wall, the Prime Minister showed himself to be too weak to act.
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“Rishi Sunak should have sacked Nadhim Zahawi a long time ago, just as he should have acted over Dominic Raab and Suella Braverman, but in his weakness he promoted them.
“The reason this keeps happening is we have a government whose only principle is party first, country second.
“The Tories are governing in their own interests, with a prime minister who is trying to manage his MPs, rather than govern in the national interest.”
Liberal Democrat deputy leader Daisy Cooper called on Zahawi to stand down as MP for Stratford-on-Avon.
She said: “Rishi Sunak has finally acted after spending days defending the indefensible on Nadhim Zahawi.
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“It should never have taken him this long to act. Sunak’s first 100 days in office have been tarnished by endless Conservative sleaze and scandals.
“Serious questions remain about what Sunak knew about Zahawi’s tax affairs when he appointed him. We need a proper independent inquiry to establish the facts and hold the Prime Minister to account.
“Given this was a serious breach of the ministerial code, Nadhim Zahawi must also do the right thing and resign as an MP.”
A journalist summarised the exact problem with the recent string of Tory scandals on BBC Question Time on Thursday.
Alison Phillips, the editor of the Daily Mirror, was discussing Tory Party chair Nadhim Zahawi’s taxes, which have been in the spotlight over the last week.
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Zahawi was reported to have paid a multi-million pound penalty to HMRC over his taxes last year, around the time he became chancellor under Boris Johnson.
The Tory Party chair has not disclosed the size of the settlement – believed to be an estimated £4.8 million including a 30% penalty – or confirmed whether he paid a fine.
Since the issue came to light, prime minister Rishi Sunak has ordered his independent ethics adviser to investigate it – as there are “questions” which need “answering” – but has not yet asked Zahawi to step down from his role.
Phillips began: “Surely, Rishi Sunak must have called him [Zahawi] in and said, ’Hang on a minute, how come I’ve just found out that what you said to me last week was not the whole truth?
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″‘And you’ve made me look an absolute clown, you’ve caused distrust in the country’ – and this is continuing.”
She also said the idea which really “cuts” through for her, was that last July Zahawi was using “his very expensive lawyers to send out letters to get journalists and investigators to stop looking at this”.
This is a reference to when reports first started to suggest that Zahawi was the subject of an investigation by the National Crime Agency and HMRC.
Phillips said these threats of being sued is seen all over the country right now, as ″very rich people are using the law to evade proper scrutiny.”
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“The idea that we’ve got someone in our government doing that, it’s just appalling, it stinks,” she added.
She mentioned that Sunak promised to introduce “integrity, professionalism and accountability” into the heart of government when he was elected as Tory leader back in October, as that’s what we as a country “deserve” and “want”.
“He’s let himself down, he’s allowed one of his closest advisers to let him down, and I think it’s a real shame for all of them,” the journalist concluded.
“Last July Nadhim Zahawi was using his very expensive lawyers to send out letters to get journalists and investigators to stop looking at this”
Speaking to Sky News, Lord Hayward said: “I think he should be considering whether he stands aside for the period of the inquiry.”
He added: ”I think there’s a difficulty where you are party chairman because you’re meant to be out there motivating the campaigners in preparation for key local elections in a few months’ time, which are the main next hurdle for the party.
“In those circumstances, it is somewhat difficult.
“If you were another cabinet minister, it may be somewhat easier to continue, but I think that is the problem for him and he may have to review his position, depending on the timescales.”
The peer also called for the investigation into the scandal by Rishi Sunak’s ethics adviser needs to be wrapped up soon.
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“It needs to be quick for everybody’s sake,” he said. “If it takes too long it just drags on and on and that just leaves everything up in the air and you have to take a different set of decisions, but I and other people in the party – and the public at large – would want it to be a very quick inquiry.”
Sunak faces a grilling from Labour leader Keir Starmer over the affair at prime minister’s questions today.
Many Tory MPs privately believe Zahawi will inevitably have to leave his position, with some speculating that it could even happen before PMQs.
One told HuffPost UK: “Why would Rishi want to go through a PMQs dominated by that?”
Liberal Democrat deputy leader Daisy Cooper said: “Every day that Nadhim Zahawi clings on does more damage to Rishi Sunak’s credibility.
“The Conservative Party is stuck in an endless cycle of sleaze and chaos, while the country suffers from a cost of living and NHS crisis.
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“What more will it take for Sunak to finally do the right thing and sack Zahawi, or at least suspend him for the duration of this investigation?
“He promised his government would have integrity and accountability, but instead once again it’s one rule for them and another for everyone else.”
Nadhim Zahawi owed the tax man £5 million while he was chancellor, according to a government minister.
Chris Philp’s comments, in a radio interview, are the first time any government official has confirmed the size of the settlement the Tory party chairman reached with HMRC.
It is unclear how much of the total payment was the penalty Zahawi was given for failing to pay his taxes on time.
But appearing on Radio Four’s Today programme this morning, Philp took issue with the presenter, Mishal Husain, when asked about the scandal.
In a statement at the weekend, Zahawi said HMRC had agreed that his error had been “careless and not deliberate”.
Philp said: “I don’t know precisely what form that carelessness took – neither do you.”
Presenter Mishal Husain replied: “He paid a penalty for it, the settlement was in the region of £5 million.”
Philp then replied: “I think that was the amount of tax owed, wasn’t it?”
Nokes, chairwoman of the Commons women and equalities committee, told TalkTV she welcomed the investigation.
“I think there are too many unanswered questions,” Nokes said.
“The challenge for Nadhim is – look at the front pages, he’s leading too many of them.
“When you become the story it’s a distraction from anything else that the government is trying to do.
“There are countless examples of good, competent Cabinet colleagues who’ve got themselves in a mess, who have resigned quickly and come back, really in some instances just a few months later.
“In order to get this cleared up Nadhim should stand aside and let the investigation run its course.”
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However, home office minister Chris Philp hit back, saying he did not think Zahawi should have to step aside while the investigation takes place.
Philp told BBC Breakfast: “I think it is reasonable that where there is an investigation, the person concerned is allowed to continue serving while that investigation continues.
“We do have a principle, don’t we in this country, innocent until proven guilty. That applies to a whole range of different circumstances.
“The investigation has been launched by the prime minister, that is the right thing to do. It will get to the bottom of this and then the prime minister will make his decision.
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“But I don’t think it is fair to jump to any conclusions before the investigation has concluded.”
Pushed on Nokes’ call for Zahawi to stand aside, the minister added: “I don’t take that view, I think we should let the investigation play out.”
Zahawi is facing calls to quit after it emerged he resolved a multimillion-pound tax dispute with HMRC by paying a penalty while serving as chancellor.
Claims started emerging when Zahawi was made chancellor, with reports suggesting Cabinet Office officials alerted the then-prime minister Boris Johnson to a HMRC dispute.
Zahawi has admitted he paid what HMRC said “was due” after it “disagreed about the exact allocation” of shares in YouGov, an error he said was “careless” not deliberate.
Nadhim Zahawi’s Taxes Explained
The allegations surround Zahawi’s links to a Gibraltar-based trust called Balshore Investments Limited – of which his father Hareth is a director.
When YouGov was co-founded by Zahawi, the trust was allocated shares equalling the number given to his co-founder Stephan Shakespeare.
Asked about this last year, the then chancellor said neither he nor his wife benefitted from the trust and denied it was used to avoid tax, saying it was because his father “lived abroad”.
The stake in the company owned by Balshore was eventually sold by 2018 for about £27 million.
Experts said that if Zahawi benefitted from that transaction he should owe tax on it.
They point to a document from 2005 that suggests he benefitted from the trust when Balshore at least partially covered a loan.
Zahawi has not disclosed the size of the settlement – reported to be an estimated £4.8 million including a 30% penalty – or confirm whether he paid a fine.
Zahawi released a statement to “address some of the confusion about my finances”.
He said: “Following discussions with HMRC, they agreed that my father was entitled to founder shares in YouGov, though they disagreed about the exact allocation. They 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, which was the right thing to do.”
James Cleverly has insisted that tax affairs are “private matters” during a grilling over the finances of the Tory party chairman.
The foreign secretary stressed that Nadhim Zahawi made a “careless error” after it was revealed he paid a settlement to HM Revenue & Customs in relation to a shareholding in YouGov.
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Zahawi is under pressure over allegations that he tried to avoid tax and has now had to pay it back as part of a multi-million pound settlement.
Cleverly said he did not know the size of the tax settlement with HMRC or whether Zahawi paid a penalty.
“I don’t know more than is in his statement,” Cleverly said.
Pressed on whether Zahawi should reveal more information, Cleverly said: “People’s taxes are private matters. I know that as politicians we, quite rightly, are expected to have a higher level of disclosure than perhaps other people might do.
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“Nadhim has issued a statement where he has admitted that he made a careless error, that this is now resolved.”
Cleverly also swerved questions over whether Zahawi negotiated his tax settlement while he was chancellor, or what Rishi Sunak knew when he appointed him party chairman.
“I’m not an investigator,” he added when it was put to him that he was there to speak on behalf of the government.
Asked whether Zahawi will survive in his role until Wednesday, Cleverly said: “What else am I going to say other than yes, because he’s a very, very effective minister.”
Foreign Secretary James Cleverly faced a grilling
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Zahawi, who attends Sunak’s Cabinet, released a statement to “address some of the confusion about my finances”.
However, the statement raised further questions, including whether Zahawi negotiated the settlement when he was chancellor and in charge of the country’s taxation.
Claims started emerging when Zahawi was made chancellor by Boris Johnson last summer, with reports suggesting Cabinet Office officials had alerted the then-prime minister to the HMRC dispute.
Zahawi did not disclose the size of the settlement – reported to be an estimated £4.8 million including a 30% penalty – or confirm whether he paid a fine.
Tax lawyer Dan Neidle, who has been working to expose the minister’s tax affairs, estimated that he owed £3.7 million.
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In an unusual move, Zahawi did not take founder shares when he set up YouGov, saying in his statement that his father took shares “in exchange for some capital and his invaluable guidance”.
He continued: “Twenty one years later, when I was being appointed chancellor of the Exchequer, questions were being raised about my tax affairs. I discussed this with the Cabinet Office at the time.
“Following discussions with HMRC, they agreed that my father was entitled to founder shares in YouGov, though they disagreed about the exact allocation. They 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, which was the right thing to do.”
He added that the matter was resolved and that all his tax affairs were “up to date” when he was appointed Tory party chairman by Sunak in October.
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But the prime minister is facing questions over what he knew about the matter and when, as well as calls to sack Zahawi.
Sunak’s promise of a premiership of “integrity” was already thrown into disarray this week after he was fined by police for not wearing a seatbelt and criticised for the allocation of levelling-up funding.
Downing Street said it had nothing to add to Zahawi’s statement and confirmed that the prime minister had confidence in him as Tory chairman.
Opposition parties have demanded an independent probe as well as the publication of all of Zahawi’s correspondence with HMRC.
Labour party chairwoman Anneliese Dodds said Sunak needs to remove Zahawi as party chair, adding: “Zahawi still needs to explain when he became aware of the investigation, and if he was chancellor and in charge of our tax system at the time.
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“He needs to explain why his legal representatives said his affairs were up to date in December last year only for him to settle a million-pound fine this month.”
Lib Dem deputy leader Daisy Cooper said: “Zahawi and his Conservative Cabinet colleagues are arrogantly trying to brush this under the carpet.
“There are facts that still need to be established so there must be an independent investigation to get to the bottom of this.”
A Tory minister has been mocked for publicly declaring his support for Boris Johnson’s Tory leadership bid and then switching to his arch-rival Rishi Sunak less than half an hour later.
Nadhim Zahawi, the Chancellor of the Duchy of Lancaster, said the UK should “get ready for Boris 2.0” in an article published by the Daily Telegraph at 9pm.
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But just two minutes earlier, Johnson had issued a statement saying he had decided to pull out of the race.
Nadhim Zahawi’s article backing Boris Johnson was published at 9pm
Daily Telegraph
In a remarkable about-turn, Zahawi – who urged Johnson to resign as prime minister in July – then posted a tweet at 9.29pm announcing that he had switched his support to Sunak.
A day is a long time in politics…
Given today’s news, it’s clear that we should turn to @RishiSunak to become our next Prime Minister. Rishi is immensely talented, will command a strong majority in the parliamentary Conservative Party, and will have my full support & loyalty.
Unsurprisingly, Zahawi was slammed on Twitter for his latest embarrassing U-turn.
The Tory leadership contest is now a two-horse race between Sunak and Penny Mordaunt.
However, Sunak is the red hot favourite, having already secured more than 120 nominations, compared to Mordaunt’s 24.
The deadline for reaching the 100 MP threshold is 2pm tomorrow.
But a source close to Sunak said: “We are not taking anything for granted. Rishi will be continuing to talk to colleagues tomorrow morning before nomination papers go in, and discussing how best to unite the party and take the country forward.”
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A Mordaunt campaign source said: “Penny is still running to be the leader of the Conservative Party.
“Penny is the unifying candidate who is most likely to keep the wings of the Conservative Party together and polling shows that she is the most likely candidate to hold onto the seats the Conservative Party gained in 2019.”
In her keynote conference speech, the prime minister railed against those she accused of trying to hold back her pro-growth agenda, including Labour, “militant” unions, “Brexit deniers”, Extinction Rebellion and “some of the people we had in the hall earlier” – a reference to the protesters who disrupted her address.
It’s clearly an attack line her senior team are rallying around, as Cabinet minister Nadhim Zahawi was among those to tweet out the slogan.
It’s worth printing the diatribe in full to get a better idea of who she thinks they are and what they do:
“I will not allow the anti-growth coalition to hold us back.
“Labour, the Lib Dems, the SNP, the militant unions, the vested interests dressed up as think tanks, the talking heads, the Brexit deniers, Extinction Rebellion and some of the people we had in the hall earlier.
“The fact is they prefer protesting to doing. They prefer talking on Twitter to taking tough decisions.
“They taxi from north London townhouses to the BBC studio to dismiss anyone challenging the status quo.
“From broadcast to podcast, they peddle the same old answers.
“It’s always more taxes, more regulation and more meddling.
“Wrong, wrong, wrong.”
It seems to be a wide-ranging term that could anyone you would file under “the establishment” or anything vaguely “woke”.
Given the elasticity of the phrase, questions were asked about whether healthy food campaigner Jamie Oliver was also part of the rabble putting the brakes on Truss and her policies.
In her speech, the PM signalled the scrapping of the planned ban on junk food multi-buy deals as she declared she is “not interested in how many two-for-one offers you buy at the supermarket”.
Downing Street later did not rule out that the anti-growth coalition included the celebrity chef, who supports the ban.
The prime minister’s press secretary suggested there could be a scrapping of the planned ban of buy one, get one free offers, saying: “You’ll have to wait for announcements on that.”
When asked if Oliver is part of the anti-growth coalition, he responded: “I’m not going to name individuals.”
The speech has prompted people on Twitter to suggest a whole range of members of the coalition, including bats, David Attenborough and Conservative councils.
Nadhim Zahawi urging households to look at how they are using energy has left some people speechless – probably because he used taxpayers’ cash to heat his horse stables.
On Friday, the chancellor said everyone should “look at our energy consumption” as it was confirmed bills are set to soar by 80%.
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In 2013, the Sunday Mirror revealed he claimed for electricity at the stables, as part of a wider bill, other parts of which were allowed under the rules.
At the time, Zahawi promised to repay part of a £5,822.27 expenses claim for his energy bills after it emerged taxpayers were paying for the electricity supply to his stables.
He has said it was a “deeply embarrassing” but “genuine mistake” to claim the expenses for heating stables for his horses.
Given his history, some were taking his guidance with a pinch of salt after it was after it was announced the average energy price cap will soar to a devastating £3,549 in October.
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Chancellor Nadhim Zahawi on energy consumption: “The reality is that we should all look at our energy consumption. It is a difficult time.”
To clarify, it’s the same @nadhimzahawi who claimed of £5,822 to heat his stables (which he was forced to pay back after it was revealed)
I, for one, will be turning down the heating in my stables this winter. Even though I have in the past put that particular bill on my parliamentary expenses.”” https://t.co/ogdHp6UFXl
Nadhim Zahawi has rightly told people to look carefully at their energy consumption. Personally I’m going to turn the central heating in my stables down one or two degrees this winter.
One of the wealthiest members of parliament, Zahawi founded the polling firm YouGov.
In July, he told Sky News’ Kay Burley the claim was a “genuine mistake” as he did not realise his stable heating and personal heating was coming in on a single bill.
“It was a complete error, a mistake, and of course I apologised and repaid,” he said.
Asked if he was embarrassed, Zahawi said: “Of course. Deeply embarrassing. But it was a genuine mistake. It’s much better to admit and demonstrate than to do anything else.”
