Rishi Sunak will sack Conservative chairman Nadhim Zahawi if he is judged to have “fallen foul” of the ministerial code by No 10’s ethics adviser, Tory trade minister Andrew Bowie has said.
Tory MPs told The Independent they believe that Mr Sunak was “increasingly irritated” with Mr Zahawi and was preparing to fire him if Sir Laurie Magnus’ probe into the tax saga found any wrongdoing.
Appearing to distance himself from his cabinet minister at PMQs, Mr Sunak suggested it would have been “politically expedient” to have sacked the Tory chair – but still wanted the ethics adviser’s probe to play out.
Mr Bowie – a close Sunak ally – told BBC Politics Live: “If [Mr Zahawi] is found to have fallen foul in this report, the prime minister will of course sack him.”
Asked about Mr Bowie’s comments, senior Tory MP David Davis told The Independent: “He will have been authorised to say that, I think. At the end of the process, either he’s safe or he goes – there won’t be any grey area. What’s the half-penalty?”
One Tory MP told The Independent said they were “sure” that Mr Sunak would sack Mr Zahawi if he was found to have broken the ministerial code. “He will have to. Otherwise the speech outside No 10 [and vow to bring “integrity”] is a busted flush.”
A former minister told The Independent that Mr Sunak’s remarks at PMQs showed he was “clearly becoming increasingly irritated” with Mr Zahawi. The senior Tory added: “Nadhim would be very wise to step down, even if he announces it is only on a temporary basis.”
Despite Mr Bowie’s remarks, No 10 suggested Mr Sunak may not sack Mr Zahawi even if he breached the ministerial code. The PM’s official spokesman said: “Recently the code was updated so it’s no longer a binary decision.”
Changes to the ministerial code – which demands ministers are transparent and honest –allows ministers to apologise and temporarily lose their pay rather than having to resign for any breaches.
Mr Zahawi dismissed reports of an HMRC review into his taxes – first revealed by The Independent last year – as a “smear”, but on Saturday he admitted he had settled a tax dispute understood to be almost £5m.
The former chancellor has not yet disclosed the precise details of the HMRC settlement, which reportedly amounted to £4.8m – including 30 per cent penalty of around £1m. His spokesman has not denied the penalty, or the overall sum.
Tory MP Nigel Mills said the investigation into whether Mr Zahawi ministerial code will not end the questions he is facing – calling on the party chairman to explain why he was fined by HMRC.
“A 30 per cent penalty is serious,” Mr Mills told The Independent. “It’s not really a ministerial code problem, it’s a how can you be in cabinet if you paid a £1m tax penalty problem.”
The Amber Valley MP added: “I like Nadhim, he’s done so good work. But he has to come out and explain what happened. We have to have a public answer to those question … If he can’t explain it, then clearly his position won’t be tenable.”
Failure to sack Zahawi shows PM is ‘hopelessly weak’, Starmer says
No 10 was unable to say whether Mr Sunak is confident no more damaging surprises will emerge about Mr Zahawi’s tax affairs. “I don’t think any of us can predict what may come up,” said his press secretary.
The No 10 press secretary also indicated that Mr Sunak received assurances about Mr Zahawi’s tax affairs before defending him last week. “The prime minister was given assurances that it had been dealt with prior to what he said in the House on Wednesday.”
But pressed further she would not say whether the assurances were different to the ones he received at the time he appointed Mr Zahawi as a minister. No 10 also repeatedly declined to say whether Mr Sunak has ever paid a tax penalty like Mr Zahawi did.
Sir Keir Starmer tried to draw a link at PMQs between Mr Sunak’s handling of the current mess and his billionaire wife Akshata Murty, after The Independent revealed she had held non-dom tax status that could have reduced her UK tax bill.
The Labour leader said: “We all know why the prime minister was reluctant to ask his party chair questions about family finances and tax avoidance.”
Sir Keir said Mr Sunak’s failure to sack Tory chairman after his admission of a tax settlement shows he is “hopelessly weak”, adding: “Is he starting to wonder is this job is just too big for him?”
Mr Sunak expects to receive his ethics adviser’s report into Mr Zahawi’s tax affairs in 10 days, according to ITV host Robert Peston. Mr Davis said: “If I were Rishi, I would give him a week – do not let it run.”
More senior Tory figures joined Caroline Nokes in calling on Mr Zahawi to resign on Wednesday. Tory peer Lord Hayward said he should step aside, at least until the inquiry concludes – warning that the saga could help “flatline” Tory popularity ahead of the local elections.
Despite the pressure, Mr Zahawi is said to be determined to remain in cabinet stay on as Tory chairman. Tory MP Bim Afolami told TalkTV that Mr Zahawi had told colleagues that “he hasn’t done anything wrong” and his tax arrangement were “typical when people sell a business that”.