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Rishi Sunak has ordered an investigation into Nadhim Zahawi as he resisted calls to sack the Tory party chairman over his tax dispute.

The prime minister asked new ethics adviser Sir Laurie Magnus on Monday to assess whether the cabinet minister breached the ministerial code with the HMRC settlement he made while he was chancellor.

Mr Sunak said he was launching an investigation because “clearly in this case there are questions that need answering”.

But Labour leader Sir Keir Starmer said: “He promised us, 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.”

Politics live: Zahawi told to quit – amid ‘clear evidence’ TV interview defence was ‘not true’

Scotland’s first minister, Nicola Sturgeon, has also said Mr Zahawi’s position is “untenable”.

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Earlier, a source close to the embattled Tory MP said he is “absolutely not going to resign” in the face of growing pressure over his settlement, estimated to be around £5m.

The government’s paymaster general, Jeremy Quin, told the Commons on Monday the process for the management of conflicts of interest, or potential conflicts is “clear and robust” as he admitted the PM has the ultimate say on appointments.

But he added: “It is a responsibility of all ministers to ensure that no conflict arises or could be reasonably perceived to arise between their role and their interests, financial or otherwise.”

The tax expert who investigated Mr Zahawi has joined calls for him to go, telling Sky News there is “clear evidence” he has not been truthful about his affairs.

Dan Neidle, the Founder of Tax Policy Associates and a Labour member, pointed to comments made by Mr Zahawi to Kay Burley last summer, while the then-chancellor was running to be leader of his party.

Mr Zahawi said he was “clearly being smeared” over questions about his affairs – and that he did not “benefit” from an “offshore trust”.

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Rishi Sunak has asked his independent ethics adviser to investigate Nadhim Zahawi

Speaking to Kay Burley on Monday, Mr Neidle said that a filing disclosure from YouGov – the polling company Mr Zahawi co-founded – showed he “received £99,000 from Balshore Investments”, a company based in Gibraltar.

Mr Neidle said: “That’s not my supposition or a guess – it’s absolute fact.

“And yet he denied that to you.”

Mr Neidle said there could be “an innocent explanation” for Mr Zahawi’s tax error, which the Tory MP called “careless not deliberate”.

But he added: “I lack the imagination to see it and if there isn’t one, I think he should resign.”

What we still don’t know about Zahawi’s tax dispute

Former chancellor Nadhim Zahawi arrives at the Conservative Party head office in Westminster, central London. The embattled Tory party chairman has been under pressure since it was reported that he paid HMRC a seven-figure sum to end a dispute, with Labour calling for him to be sacked. Picture date: Monday January 23, 2023.
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Nadhim Zahawi did not answer questions when he arrived at Conservative Party headquarters on Monday

Questions about Mr Zahawi’s tax affairs have continued, even after he released a statement to “address some of the confusion about my finances”.

On Saturday he admitted he paid what HMRC said “was due” after it “disagreed about the exact allocation” of shares in YouGov.

But he did not disclose the size of the settlement – reported to be an estimated £4.8m including a 30% penalty – or whether he paid a fine.

Sky News understands he did pay a fine, and Mr Neidle said the use of the word “careless” confirms this.

He said “careless means something specific” in tax terms – “that you didn’t behave in a reasonable way”.

“A reasonable way is you instruct decent tax advisers. You tell them the truth, you follow their advice, you check your final tax returns as best you can.”

It is also not clear how much money Mr Zahawi made before settling the dispute.

Mr Neidle said: “I think he would have received about £27m and not paid tax on it until eventually he was forced to because it was being reported. He didn’t admit it, denied it, threatened to sue people and went to HMRC to quietly settle it.”

Mr Zahawi did not answer questions from reporters as he headed into the Conservative Party headquarters in Westminster earlier on Monday.

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Israel had ‘no choice’ but to attack Iran because it was ‘rushing’ to nuclear bomb, president Isaac Herzog claims

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Israel had 'no choice' but to attack Iran because it was 'rushing' to nuclear bomb, president Isaac Herzog claims

Israel had “no other choice” but to attack Iran because it was proceeding “dramatically” towards a nuclear bomb, Israeli President Isaac Herzog has claimed.

Speaking to Sky News’ Yalda Hakim, he said Iran was “rushing” to the bomb “under disguise”.

He also suggested the Israeli war cabinet was discussing Iran’s Supreme Leader, Ayatollah Ali Khamenei, amid reports that President Donald Trump vetoed a plan to kill him.

It comes as Israel and Iran continue to fire missiles at each other after Israel launched an unprecedented strike on Iran’s nuclear and military capabilities.

Tehran has long denied that its nuclear program has been attempting to obtain a nuclear weapon.

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Sky’s Yalda Hakim interrupted by air raid sirens

Mr Herzog was asked why Israel attacked Iran when it did.

“When you take such decisions of historic magnitude and proportions, you have to analyse all facets and all facts,” he replied.

“The truth of the matter is there was no other choice.”

Isaac Herzog speaks to Yalda Hakim
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Isaac Herzog speaks to Yalda Hakim

He claimed Iran was proceeding “dramatically” towards the bomb, both in terms of the enrichment of uranium and, “clandestinely”, the armament part of the process.

“I’ve always been very crystal clear with regards to a nuclear capability of our enemies – it has to be removed at once.”

Mr Herzog added: “We have to remove the Iranian nuclear program because we see the negotiating process as being futile because they are lying whilst talking to us.

“They are lying whilst talking to the United States and other allies.”

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Iran ambassador: ‘This is about self-defence’

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Iran’s ambassador to UK speaks to Sky News
UK advises against all travel to Israel

He was questioned whether the strikes on Iran’s nuclear infrastructure could provoke a response that causes a mass casualty event in Israel.

“(We are) very much aware of the risks of this war,” he replied. “Every night there are missile attacks, heavy missile attacks on Israel.

“We have our air defence systems, which are excellent.

“Unfortunately, we have casualties. Brothers and sisters of ours from toddlers all the way up to the age of 94.”

He continued: “No, we don’t accept it at all… That’s why we are fighting also, to eliminate their capability of firing at us.”

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He also suggested the Israeli war cabinet was discussing Iran’s Supreme Leader Ayatollah Ali Khamenei, after reports Mr Trump vetoed an Israeli plan to kill him.

“Let’s just remember that the Supreme Leader of Iran has for years called for the annihilation of Israel.”

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Iran’s response to Israeli strikes a ‘matter of principle’, ambassador to UK says

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Iran's response to Israeli strikes a 'matter of principle', ambassador to UK says

Iran’s response to Israeli attacks on its nuclear facilities is “self-defence” and a “matter of principle”, the Iranian ambassador to the UK has told Sky News.

Speaking exclusively to The World With Yalda Hakim, Seyed Ali Mousavi said the “barbaric Israeli regime” is “violating international law” – describing Israel’s actions in recent days as “an act of aggression against the Iranian people”.

The conflict between Israel and Iran – once played out in a series of proxy wars – has escalated in the past three days.

Follow Israel-Iran conflict live

Sky's Yalda Hakim spoke to Iran's ambassador to the UK, Seyed Ali Mousavi.
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Sky’s Yalda Hakim spoke to Iran’s ambassador to the UK, Seyed Ali Mousavi

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Israel-Iran: How the conflict escalated

On Friday morning, explosions hit Tehran as Israel carried out a major attack on its top army leaders, nuclear sites, and nuclear scientists.

Iran threatened “severe punishment” and quickly retaliated with a wave of missiles.

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Missile aftermath in Israel

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Israeli missile hits warehouse in Iranian city

When questioned about whether Iran could continue fighting Israel, the Iranian ambassador told Yalda Hakim that “it is a matter of principle”.

He said: “This is about self-defence, there is no doubt about it.

“We are a responsible member state of the UN and we do all activities according to our international obligations.

“Any activities are only in the framework of self-defence.”

Damage from an Iranian missile attack to a building in Bat Yam, Israel. Pic: Reuters
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Damage from an Iranian missile attack to a building in Bat Yam, Israel. Pic: Reuters

Explosions over Jerusalem
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Explosions over Jerusalem on Sunday

He added that his country would “do our best to preserve our territorial integrity”, and that “with the help of God”, Iran will “materialise endeavours concretely against our enemy – the Israeli regime”.

Mr Mousavi also told Hakim that Iran’s nuclear activities are “monitored”, and that recent comments by the International Atomic Energy Agency (IAEA) were “politically motivated”.

Read more here:
How conflict between Israel and Iran unfolded
UK advises against all travel to Israel
Explosions over Jerusalem as missiles ‘detected’ by IDF

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Missiles have also been seen over Tel Aviv

The UN nuclear watchdog’s board of governors found Iran was not complying with its nuclear obligations for the first time in 20 years.

Iran said it has “always adhered” to the safeguarding obligations laid down by the watchdog.

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Iranian ambassador reacts to strikes – full interview

Announcing Operation Rising Lion on Friday, Israeli Prime Minister Benjamin Netanyahu claimed Iran had recently taken steps to weaponise enriched uranium, which could be used to make nuclear weapons.

But Mr Mousavi stressed that Iran’s “peaceful activities” at its “nuclear fields” were only for the “generation of electricity, and other peaceful” things.

Iran was due to continue its round of negotiations with the US in Muscat – however, this was cancelled, given recent tensions.

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UK government advises against all travel to Israel

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UK government advises against all travel to Israel

The government is warning people not to travel to Israel under any circumstances, as the country’s missile exchange with Iran shows no sign of abating.

On Friday, the Foreign Office warned against “all but essential travel” to most of Israel.

The areas around Gaza, the West Bank and the Golan Heights were already classed as red zones, with warnings to avoid travel to these areas.

But the government has now updated the warning for the remainder of the country to red.

Follow live: Tehran and Israel exchange strikes

This puts Israel on the same level as Iran, and the change of advice is also likely to impact travel insurance.

However, with Israel’s airspace closed, it is unlikely many people will be attempting the journey, and Israel’s national airline El Al has announced it is cancelling flights to and from many European cities, as well as Tokyo and Moscow, until 23 June.

The change in travel advice comes after a second night of ballistic missile barrages from Iran following Israel’s attack in the early hours of Friday morning.

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An eight-storey residential building in Tel Aviv was hit by a missile last night.

On Sunday morning, Israel’s health ministry said 12 people had been killed over the past day, taking the total since Friday to 15. It also said 385 people had arrived at hospital with injuries overnight.

Iran has not provided a total number of deaths or overall casualties, but has claimed dozens have been killed.

Iran’s health minister has said most of those injured and killed in Israeli strikes were civilians. According to comments carried by news agency IRNA, he said the majority were women and children.

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The chancellor said UK forces could “potentially” be used to help defend Israel.

Read more:
UK military could ‘potentially’ be used to defend Israel
Nuclear threat wasn’t the only reason Israel attacked Iran
What are Iran’s military capabilities

What is the UK doing?

The UK government is sending military assets, including fighter jets, to the Middle East.

While the prime minister would not confirm to reporters that UK forces could be used to defend Israel from future Iranian attacks, the chancellor told Sky News earlier that the government is “not ruling anything out”.

Speaking to Sky’s Sunday Morning With Trevor Phillips, Rachel Reeves said sending military assets to the Middle East “does not mean that we are at war”, and emphasised that “we have not been involved in these strikes or this conflict”.

“But we do have important assets in the region,” she continued. “And it is right that we send jets to protect them. And that’s what we’ve done. It’s a precautionary move, and at the same time, we are urging de-escalation.”

Pushed on the question of what the UK would do if Israel asked for support with its operations, the chancellor replied: “I’m not going to rule anything out at this stage. It’s a fast-moving situation, a very volatile situation. But we don’t want to see escalation.”

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