Nadhim Zahawi sacked as Tory chairman over tax affairs row

Nadhim Zahawi (Victoria Jones/PA) (PA Wire)
Nadhim Zahawi (Victoria Jones/PA) (PA Wire)

Nadhim Zahawi has been sacked as Conservative Party chairman after a row over his tax affairs.

An ethics inquiry found the former Tory chairman was “in serious breach of the ministerial code” on Sunday.

It follows a difficult week for embattled Mr Zahawi who was revealed to have paid a penalty as part of an estimated £4.8 million settlement dispute with HMRC.

Prime Minister Rishi Sunak asked Sir Laurie Magnus, his independent adviser on minister interests, to investigate whether Mr Zahawi had acted properly.

In his report Sir Laurie said Mr Zahawi had shown “insufficient regard for the principles of 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 said that, following the investigation, which completed its work after only a few days, “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 and his Government had faced questions for several days about the row, with growing pressure on Mr Zahawi to stand aside.

HMRC boss Jim Harra told MPs there are “no penalties for innocent errors in your tax affairs”.

In the letter, Mr Sunak told the Tory MP: “When I became Prime Minister last year, I pledged that the Government I lead would have integrity, professionalism and accountability at every level.”

He paid tribute to Mr Zahawi’s contribution to the Government, including his role as vaccines minister during the pandemic.

“As you leave, you should be extremely proud of your wide-ranging achievements in Government over the last five years,” he said.

“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.”

In a letter to the Prime Minister following his sacking, Mr Zahawi did not explicitly mention the findings of the ethics inquiry into his tax affairs.

But he told Mr Sunak that he is concerned “about the conduct from some of the fourth estate in recent weeks”, in a reference to the media.

He said: “It has been, after being blessed with my loving family, the privilege of my life to serve in successive governments and make what I believe to have been a tangible difference to the country I love.”

In comments that appear to indicate that the former chancellor holds out little prospect of returning to office in the years to come, 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.”

Sir Laurie’s four-page report, dated January 29, set out in detail the circumstances of Mr Zahawi’s tax affairs and communications with HMRC.

The row surrounding Mr Zahawi had centred on a tax bill over the sale of shares in YouGov – the polling firm he founded – worth an estimated £27 million and which were held by Balshore Investments, a company registered offshore in Gibraltar and linked to Mr Zahawi’s family.

Mr Zahawi had said that HMRC concluded there had been a “careless and not deliberate” error in the way the founders’ shares, which he had allocated to his father, had been treated.

He also insisted he was “confident” he had “acted properly throughout”.

The sacking came as Levelling Up Secretary Michael Gove toured broadcast studios on behalf of the Government.

“Because someone commits a lapse or a sin, that shouldn’t be automatically taken as an opportunity to damn an entire organisation or a way of working,” he told the BBC’s Sunday With Laura Kuenssberg programme as news of Mr Zahawi’s dismissal broke.

“There are always people who will fall short, whether it’s in politics or other parts of public life, or professional life, or in any area.”

Both Labour and the Liberal Democrats said it is vital that the public gets answers now about what and when Mr Sunak knew about the controversy.

Shadow education secretary Bridget Phillipson said the Prime Minister should have sacked the Tory MP a “long time ago”.

“It’s vital that we now get answers to what Rishi Sunak knew and when did he know it. We need to see all the papers, not just have the Prime Minister’s role in this brushed under the carpet.”

The Liberal Democrats also called on Mr Zahawi to go a step further and leave parliament.

But Mr Gove rejected calls for Mr Zahawi’s departure from politics, telling Times Radio that he should “absolutely not” quit as an MP.