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Rishi Sunak Says He Has "Full Confidence" In Nadhim Zahawi As Tax Probe Launched

Rishi Sunak says he has full confidence in Nadhim Zahawi. (Alamy)

4 min read

The Prime Minister has insisted he has "full confidence" in Conservative Party chairman Nadhim Zahawi after he ordered the government's ethics adviser to launch an investigation into Zahawi's tax affairs.

Sunak stated his support for the senior minister but said that there are "clearly questions that need answering".

The Prime Minister's spokesperson insisted on Monday that Sunak still had confidence in Zahawi.

"He retains the Prime Minister’s confidence, and that’s why he continues in the role as per standard practice," they said.

They added the Prime Minister had ordered the investigation because of "additional facts" that had been reported over the weekend.

"Subsequently and over the weekend additional facts have been placed into the public domain by the party chairman and as you heard from the PM this morning, he thinks it’s right because of this to ask his independent adviser to establish the facts and present him with his findings," they said.

The Downing Street spokesperson also claimed Sunak was not aware that Zahawi had been forced to pay a penalty as part of the deal with HMRC when he defended the minister at PMQs last week.

The spokesperson said it was their "understanding" that Sunak had only become aware of the penalty over the weekend, and that there were believed to be "no outstanding issues" when Zahawi was appointed to Sunak's cabinet. 

Zahawi is facing calls to quit after he 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.

The investigation will be led by Sir Laurie Magnus, who was appointed as the Prime Minister's Independent Adviser on Ministers' Interests in December.

Sunak said he had ordered the ethics probe because he said "integrity and accountability is really important to me".

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.

The decision to launch an investigation has prompted further calls from opposition parties for Sunak to sack the former-chancellor, with Labour leader Keir Starmer saying his position was "untenable".

"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," he said. "Clearly he isn't going to resign, so the Prime Minister needs to show some leadership. This is a test of the Prime Minister."

Speaking in the Commons on Monday, Labour's deputy leader Angela Rayner said the Prime Minister should "come clean" about his knowledge of the case, saying it would remove the need for another investigation.

"We may have a carousel of ministers, but it's the same old excuses every single time," she said.

"If this isn't a breach of the ministerial code, then surely the code is wrong and it is the Prime Minister's responsibility to fix it."

She added: "If the Prime Minister came clean about what he knew and when and took responsibility for the conduct of his own cabinet then would be need yet another investigation into yet another member of his top team."

Responding to Rayner, Paymaster General Jeremy Quin said the decision to order the probe was the right approach, adding: "Integrity and accountability are critical as is professionalism and this government will wait to hear the facts before taking decisions based on those facts."

In a statement on Monday, Zahawi suggested he would not step down as Conservative Party chair, saying he "looked forward to explaining the facts".

"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 said.

"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."

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