Tax row ex-minister Nadhim Zahawi is threatening to kick-start a damaging protracted public row with Rishi Sunak over the manner of his sacking as Conservative Party chairman.
The multi-millionaire MP was fired early yesterday morning over a seven-figure payment to HMRC he made while chancellor last year.
The Prime Minister dismissed the former vaccines minister for a ‘serious breach of the ministerial code’ less than two hours after receiving a report by ethics chief Sir Laurie Magnus.
Mr Zahawi, who is reported to have paid a £1million fine as part of a £5million settlement with tax authorities, had previously threatened legal action against journalists trying to look into the tax probe.
He is believed to still insist he has done nothing wrong, and was not given enough of a chance to put his case.
Allies have suggested he may publish his own rebuttal to the conclusions reached by Sir Laurie, who identified seven separate breaches of the ministerial code of conduct.
Mr Sunak today defended the handling of Mr Zahawi’s case. On a visit to a hospital in Darlington he said that due process had been followed.
‘Integrity is really important to me. All of you want to see that government is run properly, that it is run with integrity and there is accountability when people don’t behave in a way that they should or something doesn’t go right, and that is what we have done,’ he added.
Mr Sunak is now hunting for a ‘squeaky clean’ candidate for Tory party chairman, and was last night struggling to find an immediate replacement for the post, which is critical in the run-up to a general election expected next year.
Former party leader and foreign secretary Lord Hague this morning ruled out taking the role, while Jacob Rees-Mogg has suggested it be handed to Boris Johnson.
Rishi Sunak fired the multi-millionaire MP early yesterday morning over a seven-figure payment to HMRC he made while chancellor last year
Mr Zahawi, who is reported to have paid a £1million fine as part of a £5million settlement with tax authorities, had previously threatened legal action against journalists trying to look into the tax probe. He is pictured with his wife Lana
In an unrepentant letter to Rishi Sunak who fired him yesterday morning, former Tory chairman Nadhim Zahawi made no reference to the tax row that led to his sacking, and offered no apology for his conduct
Rishi Sunak (pictured) is now hunting for a ‘squeaky clean’ candidate for Tory party chairman
A Tory grassroots organisation controlled by supporters of the former PM is demanding the party membership has a role in choosing the new chairman.
The Conservative Democratic Organisation, led by Lord Cruddas, said the chairman – who gets a ministerial position – had become ‘too much a representative of the Government to the membership rather than representing members to the Government’.
It has launched a petition calling for the post to be elected annually.
Downing Street has defended the integrity of the investigation into Mr Zahawi’s tax affairs, insisting it is ‘confident’ that Sir Laurie had time to establish the facts.
‘We did not set any time limit for the adviser and he was free to carry out the investigation to establish the facts, and conclude his work when he thought he had done so,’ the Prime Minister’s official spokesman said.
The Prime Minister ‘expects any appointed ministers to declare relevant interests and abide by the ministerial code’, the spokesman said, adding that Mr Zahawi’s tax penalty was not disclosed to Rishi Sunak upon his appointment.
Downing Street said there are no plans to make further changes to the appointments protocol as they had been updated recently.
Mr Zahawi yesterday launched an extraordinary attack on the Press over media reports that ended his career in frontline politics.
In an unrepentant letter to Rishi Sunak who fired him yesterday morning, the former Tory chairman made no reference to the tax row that led to his sacking, and offered no apology for his conduct.
Mr Zahawi was criticised in the report for his lack of candour in statements to the Press about his tax affairs.
On July 10 last year, when he had been under investigation by HMRC for more than 12 months, he dismissed reports of the probe, saying: ‘It’s very sad that such smears should be circulated and sadder still that they have been published.’
Sir Laurie said Mr Zahawi ‘should have understood’ he was under investigation by HMRC, which had held face-to-face talks with him the previous year, and that this was ‘a serious matter’.
Two ministers told the Mail that former Tory leader William Hague (pictured) was among the possible candidates for the job of Tory Party chair
Allies of Mr Sunak dismissed a suggestion from Jacob Rees-Mogg that Boris Johnson (pictured) could take the job
He added that the then chancellor’s dismissal of the reports failed to meet the duty of ministers to be ‘as open as possible with Parliament and the public’.
But in his letter to Mr Sunak yesterday, Mr Zahawi wrote: ‘I am concerned about the conduct of some of the fourth estate.’
In an apparent reference to a recent alleged assault on former health secretary Matt Hancock on the London Underground, he added: ‘In a week when an MP was physically assaulted, I fail to see how one headline on this issue, ‘The Noose Tightens’, reflects legitimate scrutiny of public officials. I am sorry to my family for the toll this has taken on them.’
In a letter to Mr Zahawi , Rishi Sunak said the departing Tory chairman had committed ‘a serious breach of the ministerial code’
But Health Minister Helen Whately told Sky News today that Mr Zahawi had ‘opportunities when he could have been transparent and he wasn’t.’
Ms Whately, also told Times Radio: ‘What the Prime Minister put in place was his independent ethics adviser, Sir Laurie Magnus, to look into the facts of the case.
‘So he was under pressure to go straight to it and people were saying he should have moved faster but actually he followed a fair process.
‘Sir Laurie Magnus looked into it, he set out in his letter very clearly what did or didn’t happen and that was the basis on which the Prime Minister removed Nadhim Zahawi from office.’
Asked whether she thought Mr Zahawi ‘got a fair hearing’, Ms Whately said: ‘I would say so, yes.’
Last night two ministers told the Mail that former Tory leader William Hague was among the possible candidates for the job.
One said: ‘If the PM could persuade Hague to do it, it would be fantastic. He is hugely popular with the party in the country and he is someone who could clearly and forcefully articulate the Government’s message.’
No 10 hinted that the search could take some time and said the PM had not yet ‘sounded [anyone] out’, including Lord Hague, who is a close ally of the PM and was invited to attend last week’s Cabinet ‘away day’ at Chequers.
For the moment, Mr Zahawi’s duties will pass temporarily to Tory party chief executive Stephen Massey.
Allies of Mr Sunak dismissed a suggestion from Jacob Rees-Mogg that Boris Johnson could take the job.
Mr Rees-Mogg told GB News yesterday that Mr Johnson ‘has all the right attributes for a party chairman’. But Mr Rees-Mogg admitted the PM and his predecessor were ‘not the closest of political allies’.
Grant Shapps, Andrew Mitchell and Penny Mordaunt are reported to have ‘auditioned for the role’ during last week’s Chequers away day. But neither Mr Shapps nor Mr Mitchell are thought to be interested in the job, and Miss Mordaunt is not close politically to Mr Sunak.
Robert Jenrick and Therese Coffey were among the names being touted last night.
Mr Sunak received Sir Laurie’s report at 7am yesterday while at home in North Yorkshire. Two hours later, Mr Zahawi was sacked in a brief telephone conversation. Sir Laurie found Mr Zahawi had breached the ministerial code on seven occasions, saying he should have declared he was under investigation by the taxman and had been fined.
The seven breaches that sealed Nadhim Zahawi’s fate
Nadhim Zahawi has been sacked from Government by the Prime Minister after he was found to have committed a ‘serious breach’ of ministerial rules
- The ex-Tory chairman held face-to-face talks with HM Revenue and Customs in June 2021 – two months after the taxman launched an investigation into his affairs. Ethics chief Sir Laurie Magnus said Nadhim Zahawi ‘should have understood’ he was under investigation.
- Mr Zahawi did not declare he was subject to a tax investigation when he was promoted to education secretary in September 2021 despite ‘specific prompts on tax affairs and HMRC investigations and disputes’ on the relevant forms.
- The ex-vaccines minister was appointed chancellor on July 5 last year, putting him in charge of the UK’s tax system. But – again – he did not reveal he was subject to an ongoing tax probe.
- Five days later, Mr Zahawi claimed media reports of a probe into his tax affairs were ‘smears’. He did not correct the record until January 21 this year – a failure which Sir Laurie said was ‘inconsistent with the requirement for openness’.
- Mr Zahawi reached an ‘agreement in principle’ with HMRC in August and settled with the taxman in September. However the then-chancellor did not disclose the nature of the investigation nor the fact he was fined.
- In September, he was appointed Chancellor of the Duchy of Lancaster but did not declare the outcome of the investigation to officials.
- Mr Zahawi became party chairman in October. Once again, he failed to inform officials of the probe’s outcome.