Rishi Sunak Has Ordered An Investigation Into Nadhim Zahawi's Tax Affairs
Nadhim Zahawi is facing an ethics probe over his tax affairs (Alamy)
Prime Minister Rishi Sunak has requested that the government's independent ethics adviser launches an investigation into Nadhim Zahawi's tax affairs, noting there are "clearly questions that need answering".
"Integrity and accountability is really important to me and clearly in this case there are questions that need answering," Sunak told reporters during a a visit to a hospital in Northamptonshire on Monday.
"That's why I've asked our independent adviser to get to the bottom of everything, to investigate the matter fully and establish all the facts and provide advice to me on Nadhim Zahawi's compliance with the ministerial code.
He added: "I'm pleased that Nadhim Zahawi has agreed with that approach and has agreed to fully co-operate with that investigation."
The probe will be led by Sir Laurie Magnus, who was appointed as the Prime Minister's Independent Adviser on Ministers' Interests in December.
Responding to the announcement, Zahawi said: "I welcome the Prime Minister’s referral of this matter to the Independent Adviser on Ministerial Standards. I look forward to explaining the facts of this issue to Sir Laurie Magnus and his team.
"I am confident I acted properly throughout and look forward to answering any and all specific questions in a formal setting to Sir Laurie."
He added: "In order to ensure the independence of this process, you will understand that it would be inappropriate to discuss this issue any further, as I continue my duties as Chairman of the Conservative and Unionist Party."
But speaking after news of the probe, Labour leader Keir Starmer said it was "obvious" that Zahawi couldn't remain in his post.
"The very idea that he can be discussing and negotiating his own tax affairs with the body he is supposed to be running – everyone knows it wrong. Clearly he isn't going to resign, so the Prime Minister needs to show some leadership. This is a test of the Prime Minister."
He added: "He promised us in his first words; integrity and accountability. Well if those words mean anything the Prime Minister should sack him and sack him today and show some leadership.
"If he doesn't it is just going to be further evidence to the British public as to just how weak this Prime Minister is."
And Liberal Democrat deputy leader Daisy Cooper said the probe had put Sunak's judgement in the "spotlight".
She added: "If Sunak won’t do the decent thing and sack Zahawi, the least he can do is suspend him for the duration of the investigation."
On Saturday Zahawi, the Conservative Party chair, admitted he had reached a settlement with HMRC after making a "careless and not deliberate error" related to his previous directorship of polling firm, YouGov.
Setting out his position on Saturday, Zahawi said in a statement: "Twenty-two years ago, I co-founded a company called YouGov. When we set it up, I didn’t have the money or the expertise to go it alone, so I asked my father to help. In the process, he took founder shares in the business in exchange for some capital and his invaluable guidance," he said.
"Following discussions with HMRC, they agreed that my father was entitled to founder shares in YouGov, though they disagreed about the exact allocation. They concluded that this was a ‘careless and not deliberate’ error."
While Zahawi did not address the size of the settlement, the Guardian has reported the total to be more than £4.5m.
Sources have now suggested to Sky News and the BBC that the settlement was resolved while Zahawi served as Chancellor last summer.
Labour have already called for Zahawi to step down over his tax affairs, with party chair Anneliese Dodds saying the "carefully worded statement blows a hole in Nadhim Zahawi's previous accounts of this murky affair".
"He must now publish all correspondence with HMRC so we can get the full picture. In the middle of the biggest cost of living crisis in a generation, the public will rightly be astonished that anyone could claim that failing to pay millions of pounds worth of tax is a simple matter of ‘carelessness’," she said.
"Nadhim Zahawi still needs to explain when he became aware of the investigation, and if he was chancellor and in charge of our tax system at the time."
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