James Cleverly Says Ministers' Tax Returns Should Be Confidential As Questions Pile Up Over Nadhim Zahawi
Nadhim Zahawi is facing calls to quit after admitting a tax "error" (Alamy)
It is "right and proper" that the tax affairs of ministers are private, Foreign Secretary James Cleverly has said.
The senior Tory cabinet minister said he was unaware whether Nadhim Zahawi discussed his tax affairs with then-Prime Minister Boris Johnson when he was appointed Chancellor last year as he rejected suggestions that ministers should be forced to publicise their tax returns.
It comes after Zahawi, the chairman of the Conservative party, admitted in a statement that he had reached a settlement with HMRC after making a "careless but not deliberate error" related to his previous directorship of polling firm, YouGov.
"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."
Speaking to the BBC's Laura Kuenssberg on Sunday, Cleverly claimed he was unaware of any further details about the Zahawi case, saying: "In the UK system, people's tax affairs are personal and private. I recognise as politicians there is quite rightly, and enhanced duty for openness."
But pressed on whether there should be a requirement for ministers to release their tax returns when taking up senior positions, Cleverly said he did not believe that would be the "best thing".
"It's right and proper that people's tax affairs are personal and private," he said.
"We keep hearing we want politicians to be more like the rest of us and less of a strange and unique beast, so I think it's legitimate that the rules that we apply to others, should also apply to politicians.
"We don't demand it of others. If politicians choose to do so, that's great, but having a unique requirement that is different to rest of society, I don't think would necessarily be the best thing."
Anneliese Dodds, Labour Party Chair, said Sunak had “serious questions” to answer following Cleverly’s remarks.
"Instead of making excuses, the Foreign Secretary should have been explaining why his Cabinet colleague appears to have failed to declare £27m in taxes at a time when he was in charge of the tax system," she said.
"The Conservatives know they’re defending the indefensible. But serious questions remain for Rishi Sunak. What did he know about these scandals? Why did he appoint Zahawi to Cabinet? And why has he been too weak to sack him?"
In a statement on Saturday, Zahawi also claimed his tax affairs were "up to date" when appointed as Chancellor of the Duchy of Lancaster and party chair by Prime Minister Rishi Sunak in October.
But pressure is growing on Sunak to sack the party chairman, with 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."
Meanwhile, shadow chancellor Rachel Reeves accused Sunak of being "too weak" to deal with the issue, saying it was time for a Labour government to "drain the swamp" in Westminster.
"We've got a situation now in the Conservative Party where you've got the chairman, who used to be the chancellor who it looks like has been fined a million pounds or more for not paying his taxes," she said.
"We've got a Prime Minister who is too weak to do anything about it. It is going to take an incoming Labour government to clean up this mess, drain this swamp, because frankly it stinks."
Reeves said she would be happy to publish her own tax returns, but did not go as far as saying a Labour government would require all ministers to make their own information public.
"I would be happy to do that, if that was the feeling that it was necessary," she said.
"The problem with Nadhim Zahawi, the former chancellor who was in charge of the taxman when he potentially came to this arrangement. The problem is if he was to have published his taxes there would have been very little to be seen because he was not paying them, so that is the problem here."
She added: "I wouldn't have a problem with publishing my tax return, it is a pretty straightforward document, unlike it seems some people who are running the government at the moment."
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