Tory MPs say Sunak risks looking ‘indecisive’ over Zahawi tax row

Rishi Sunak is facing a backlash from his own MPs over the decision to keep Nadhim Zahawi in the cabinet despite ordering an investigation into his tax affairs.

As pressure on the prime minister mounted, Downing Street also declined to say he was confident the former chancellor had always been honest about his finances.

One former minister warned it was “insanity” to have a potentially lengthy investigation into Mr Zahawi hanging over the government.

Another said most Tory MPs believed he should not stay as Conservative Party chair and the prime minister risked looking “indecisive” by keeping him in post.

Former Tory leader Lord Hague also called for the probe’s findings to be produced “very quickly” after No 10 said Sir Laurie Magnus, Mr Sunak’s new ethics adviser, had been given no deadline.

The inquiry was a “distraction” for the government, Lord Hague warned.

“If I was the prime minister I would say I want to resolve this very quickly because it does become a distraction, of course,” he told Times Radio.

Meanwhile, an exclusive poll for The Independent shows that almost two-thirds of the public, 64 per cent, including 61 per cent of Tory voters, say Mr Zahawi should reveal how much he paid to settle a tax dispute with HMRC. Just 18 per cent said he should not, the survey by Savanta found. Figures of nearly £5m have been reported, but Mr Zahawi has yet to set out the amount.

Senior Tory MPs have told The Independent that the under-fire minister’s position as Tory chair is “untenable” and he is “unlikely” to survive – saying it was impossible for him to represent the party in the media.

Former minister Caroline Nokes increased the pressure on the prime minister when she publicly warned the ongoing row was damaging for him.

Calling on Mr Zahawi to step aside, the MP said: “I genuinely think this is too much of a problem, for him, for the prime minister.”

“In order to clear this up, Nadhim should stand aside and let the investigation run its course.”

“Once you are the story you have to go,” she told Talk TV.

Tory peer Lord Hayward also called on Mr Zahawi to “stand aside” until the investigation is complete, saying he hoped the probe could be completed “very rapidly”.

A former minister told The Independent it was “insanity” that the row would now hang over Mr Sunak until the inquiry was complete.

Another senior Tory said: “There is now a danger the prime minister looks indecisive, because questions will be raised as the investigation drags on.”

The ex-minister said it was the “general view” of most Tory MPs in the Commons tea room that Mr Zahawi should stand aside to avoid further embarrassment for the government.

“It would be much better if he stepped aside now because he’s become such a distraction. He could still come back to government if the investigation clears him.”

Another ex-Tory minister said it was a matter of “when not if” Mr Zahawi was made to step down as party chair.

Lord Evans, former MI5 boss and chair of the committee on standards in public life, also said there were questions over Mr Zahawi’s use of threats – including against The Independent – when the story was first reported.

He told BBC Radio 4’s PM: “If you’re trying to close down a legitimate public debate, I don’t think that lives up to the standards Lord Nolan laid down and which the government has committed itself to – accountability, openness are things which the government says that it wants to be characterising its own behaviour, so that I think speaks for itself.

He added: “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.”

Mr Zahawi originally 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 dispute with the taxman.

No 10 indicated that Mr Sunak did not know the former chancellor paid a penalty to settle the case until “additional facts” were placed in the public domain by Mr Zahawi at the weekend.

Home Office minister Chris Philp said the prime minister was told there were “no outstanding issues” in relation to Mr Zahawi’s tax affairs when appointing him Tory chair and making him a cabinet minister in the autumn and said it was “reasonable” for Mr Zahawi to stay on as Tory chair because he is “innocent until proven guilty”.

But shadow foreign secretary David Lammy said that a former chancellor of “any previous government” in the same situation would have “stepped down or resigned or would have been sacked”.

The SNP’s Westminster leader Stephen Flynn accused Mr Sunak of being “scared to make a decision” on whether to sack his cabinet minister.

A No 10 source said: “Integrity and accountability are of the highest importance to the PM. Clearly there are questions that need answering – that’s why he has asked the independent adviser to investigate the matter fully before deciding the next steps.”

Mr Zahawi has been approached for comment.