Nadhim Zahawi sacked as Tory chairman for 'serious breach' of ministerial code

Downing Street has denied reports that Rishi Sunak received informal advice in October that there could be a reputational risk to the Government from Zahawi and his tax affairs - Stefan Rousseau/PA
Downing Street has denied reports that Rishi Sunak received informal advice in October that there could be a reputational risk to the Government from Zahawi and his tax affairs - Stefan Rousseau/PA

Rishi Sunak has sacked Nadhim Zahawi after his ethics adviser found the Tory chairman committed a "serious breach of the Ministerial Code" over his taxes.

Mr Zahawi, who was dismissed as Tory Party chairman on Sunday morning, had come under fire after it emerged he settled an estimated £4.8 million bill with HMRC during his time as chancellor last summer.

His tax affairs were the subject of an investigation by Sir Laurie Magnus, the Government's new ethics adviser, which was ordered by the Prime Minister earlier this week.

Sir Laurie concluded Mr Zahawi had "failed" to meet requirements around declaring "any interests which might be thought to give rise to a conflict".

He added that Mr Zahawi should have "previously declared" the HMRC inquiry into the sale of shares in YouGov, the polling firm he founded.

"The subsequent fact that the investigation concluded with a penalty in relation to the tax affairs of a Minister also requires declaration and discussion. It is a relevant interest which could give rise to a conflict, and particularly so in the case of HM Treasury Ministers and the Chancellor of the Exchequer, who has responsibility for the UK tax system," Sir Laurie wrote.

"I also conclude that, in the appointments process for the governments formed in September 2022 and October 2022, Mr Zahawi failed to disclose relevant information - in this case the nature of the investigation and its outcome in a penalty - at the time of his appointment, including to Cabinet Office officials who support that process.

"Without knowledge of that information, the Cabinet Office was not in a position to inform the appointing Prime Minister."

Sir Laurie praised Mr Zahawi for fully cooperating with the inquiry, but was dismissive of his claims in July 2022 that news stories about the investigation by the HMRC amounted to "smears", insisting he should have "understood that [he was] under investigation by HMRC and that this was a serious matter".

'Insufficient regard' for ministerial code

His findings concluded: "I consider that Mr Zahawi, in holding the high privilege of being a Minister of the Crown, has shown insufficient regard for the General Principles of the Ministerial Code and the requirements in particular, under the seven Principles of Public Life, to be honest, open and an exemplary leader through his own behaviour."

In a letter to Mr Zahawi, Mr Sunak recalled his promise on the steps of Downing Street three months ago that his Government would have "integrity, professionalism and accountability at every level" following months of high-profile sleaze scandals involving Tory MPs.

"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," Mr Sunak wrote.

"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 His Majesty’s Government."

Mr Sunak went on to commend his work during his time as vaccines minister and his brief stint as Conservative chairman.

"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," he wrote. "Thank you for your service to this and previous governments."