Nadhim Zahawi tax row: Rishi Sunak’s integrity is taking a hit as he prolongs the pain over Tory party chairman
There is plenty of bemusement, irritation and anger in some quarters of the Conservative Party as to why Nadhim Zahawi is still in post.
Revelations that the party chairman reportedly paid nearly £5m to HM Revenue and Customs (HMRC) to settle a tax dispute, and pay a penalty over around £27m of wealth on which he did not initially pay tax is, for some MPs, a closed case rather than something that needs further investigation.
As one minister pointed out to me on Wednesday, what really mattered here was not the conflict of interest of Mr Zahawi being the chancellor while he was in dispute with the HMRC or what the PM knew when.
What matters here is the naked optics of a cabinet minister receiving around £27m that he didn’t initially pay tax on when people were struggling to make ends meet.
So while the prime minister on Wednesday spoke of following “due process” in determining whether the cabinet minister had broken the ministerial code, the public is more likely to have decided Mr Zahawi had not followed due process of paying his taxes – as they have to do every year – and drawn their own conclusions.
For his part, Mr Zahawi is clear that it was a “careless” error, the tax he owed was paid and the matter settled.
But the sight of Sir Keir Starmer taking easy shots at the prime minister for not asking Mr Zahawi to stand aside over the whole affair was hard for some to stomach.
Many MPs have concluded the party chairman is going to have to stand down over this affair anyway, and the investigation into the matter by the PM’s independent ethics advisor is only drawing out the pain.
“Many people in the party think that the situation is unsustainable and will only end one way,” is how one senior party figure put it to me on Wednesday.
“The point here is that the public sees a minister with £27m who didn’t pay his tax.”
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Rishi Sunak answers Zahawi question at PMQs
There are myriad explanations as to why Mr Sunak hasn’t sacked Mr Zahawi.
His team argues that the prime minister promised to do things properly and “there is a process to follow”.
He is also in a bit of a bind given that he neither sacked nor suspended Deputy Prime Minister Dominic Raab over the eight bullying allegations he is now under investigation over, so it would have been hard to treat Mr Zahawi differently.
There is also chatter that he doesn’t have the authority just to sack the party chairman without a fight or backlash, and instead has to do it following a procedure.
But the situation is causing problems.
Read more:
No 10 confirms Rishi Sunak has never paid tax penalty
What did Nadhim Zahawi do?
Nadhim Zahawi arrives at the Conservative Party head office
‘Job too big’ for Sunak
Sir Keir used it to reiterate his “weak prime minister” attack line on Wednesday and then went further to suggest that the combination of internal scandals and the problems in the NHS is evidence that the “job is too big” for Mr Sunak.
For a prime minister who has styled himself as a competent technocrat getting on with delivering, this is a very uncomfortable jibe that he will not want to stick.
It also calls into question the prime minister himself, both over his promise to lead a government of integrity and his own tax affairs.
Sir Keir was at it again on Wednesday, goading the prime minister over last year’s revelations that his wife Akshata Murty had in the past avoided tax in the UK by claiming non-dom status.
“We all know why [the PM’s] reluctant to ask his chairman about family affairs and tax avoidance,” remarked Sir Keir to the clear discomfort of the man sitting opposite him in the chamber.
Sir Keir Starmer has used the Zahawi row to say Mr Sunak is incompetent
Conflict over tax affairs
One former senior minister told me they think it’s difficult for the PM to sack someone over tax affairs when his family had its own tax scandal last year and thinks Number 10 is keeping Mr Zahawi in place as a “human shield” to avoid the attention shifting to the PM’s tax affairs.
But the questions are now being directed to Mr Sunak’s door after he was forced to confirm publicly that he had never paid a penalty to the taxman over his own tax affairs.
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For the PM’s part, he might well believe the inquiry by his independent ethics advisor is the right way to handle the situation. But his approach means he is also having to field the political blows and burn through his own political capital over a scandal that many in his party think will end with Mr Zahawi having to resign anyway.
“When this sort of thing happens, there’s only one outcome and it’s just a matter of when,” one former cabinet minister told me this week.
A PM then prolonging the pain for him, his chairman and his party, as his reputation for integrity and competence takes another hit.
The US secretary of state has hailed a “tremendous amount of progress” on peace talks after the US and Ukraine delegations met in Geneva – but said that negotiators would “need more time”.
Marco Rubio said the meetings in Switzerland on Sunday have been “the most productive and meaningful” of the peace process so far.
He said the US was making “some changes” to the peace plan, seemingly based on Ukrainian suggestions, “in the hopes of further narrowing the differences and getting closer to something that both Ukraine and obviously the United States are very comfortable with”.
Mr Rubio struck an optimistic tone talking to the media after discussions but was light on the details, saying there was still work to be done.
US secretary of state Marco Rubio in Geneva after peace talks with Ukraine. Pic: Reuters
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Analysis: Rubio strikes an optimistic tone – but is light on detail
“I don’t want to declare victory or finality here. There’s still some work to be done, but we are much further ahead today at this time than we were when we began this morning and where we were a week ago for certain,” Mr Rubio said.
He also stressed: “We just need more time than what we have today. I honestly believe we’ll get there.”
Sky News’ defence analyst Michael Clarke said on the initial US-Russian 28-point peace plan that it was Donald Trump against the world, with maybe only Moscow on his side.
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Is Trump’s plan a ‘capitulation document’?
Mr Rubio praised the Ukrainian attitude towards the talks and said Mr Trump was “quite pleased” after he previously said in a social media post that Ukraine’s leaders had expressed “ZERO GRATITUDE” for US efforts.
Ukrainian President Volodymyr Zelenskyy said in his nightly address on Sunday that there are signs that “President Trump’s team hears us”.
In a news release on Sunday evening, the White House said the day “marked a significant step forward”.
“Ukrainian representatives stated that, based on the revisions and clarifications presented today, they believe the current draft reflects their national interests and provides credible and enforceable mechanisms to safeguard Ukraine’s security in both the near and long term,” it claimed.
Despite diplomatic progress in Geneva the finish line remains a long way off
We’ve witnessed a day of determined and decidedly frantic diplomacy in this well-heeled city.
Camera crews were perched on street corners and long convoys of black vehicles swept down Geneva’s throughfares as the Ukrainians worked hard to keep the Americans on side.
Secretary of state Marco Rubio did not want to go into details at a press “gaggle” held at the US Mission this evening, but he seemed to think they had made more progress in the last 96 hours than the previous 10 months combined.
The Ukrainian leader Volodymyr Zelenskyy also seemed satisfied enough, posting on Telegram that there were “signals President Trump’s team is hearing us” after a day of “numerous meetings and negotiations”.
That said, we are a long way from the finish line here – something Rubio acknowledged when he said that any proposal agreed here would have to be handed over to the Russians.
At that point, negotiations to stop the war would surely get tougher.
President Putin has shown little or no inclination to stop the conflict thus far.
This, then, is the most important reason the Ukrainians seem determined to keep the Americans on side.
European leaders have presented a counter proposal to the widely criticised US-Russian peace plan, with suggestions including a cap on Ukraine’s peacetime army and readmitting Moscow into the G8.
This will only take place if the plan is agreed to by the US, Russia and Ukraine, and the G7 signs off on the move. Russia was expelled after annexing Crimea in 2014.
The counter proposal also includes US guarantees to Ukraine that mirror NATO’s Article 5 – the idea that “an armed attack against one NATO member shall be considered an attack against them all”.
The initial peace plan was worked up by the White House and Kremlin without Ukraine’s involvement, and it acquiesces to many of Russia’s previous demands.
Read more:
Who actually wrote US-Russian peace plan for Ukraine?
In full: Europe’s 28-point counter proposal to US-Russia plan
It covers a range of issues – from territorial concessions to reconstruction programmes, the future Ukrainian relationship with NATO and the EU, and educational reforms in both Ukraine and Russia.
Footage geolocated by Sky News showed Russian soldiers walking through the Shakhtarskyi neighbourhood on the outskirts of Pokrovsk on Thursday.
The video sheds light on the situation in this key frontline area, as Russian forces slowly encroach on Myrnohrad, the satellite town to Pokrovsk, and one of its last remaining outposts.
Videos geolocated by Sky News show fighting intensifying in recent weeks, as Russian forces attempt to gain control of the towns and their network of road and rail intersections.
Gaining control here would give Russia a base from which to access key cities further north that form part of Ukraine’s “fortress belt”.
Russian forces are advancing from all directions, according to the Institute for the Study of War (ISW), with only one small opening to the northwest of Myrnohrad remaining.
Estimated to be only 3km wide by military experts, this withdrawal corridor is patrolled by Russian drone units which monitor the area for moving vehicles and those who may attempt to leave on foot.
Russian forces have been advancing on Myrnohrad since late October.
Video from a Ukrainian unit in Myrnohad, posted on 29 October, shows a Russian vehicle attempting to enter the town from the northeast. The tank is attacked and soldiers attempting to enter on foot are targeted.
Video posted on 3 November shows Russian forces on the ground in the south of the town.
By 8 November, Russian strikes begin to pummel the northeast of Myrnohrad, the location of many of the town’s high-rise buildings, at that time, held by Ukrainian forces.
George Barros, Russia Team & Geospatial Intelligence Team Lead at ISW, told Sky News that Russian strategy in Pokrovsk has been to erode Ukrainian logistical capacity using drones and artillery over the course of several months.
“After denying supply lines and degrading the frontline forces by essentially cutting them off from behind and starving them out in their positions, then the Russians move forward with their infantry and frontal assaults,” Barros explained.
Capture the flag
For a brief period, it looked as though Russian forces had captured Myrnohrad.
Videos posted on 13 November appeared to show a Russian flag flying over the Myrnohrad mine.
However, video posted the following day showed a Ukrainian drone shooting it down.
Both Russian and Ukrainian forces continue to fight for control of Myrnohrad, with videos posted on the 19 and 20 November showing Russian airstrikes on Ukrainian positions in the town, and Ukrainian drone strikes targeting Russian forces on foot.
While the exact numbers of Russian and Ukrainian forces in the area remains unclear, reports indicate that three key Russian units are active in Pokrovsk and Myrnohrad, and are advancing on the towns from the north and south.
A number of Ukrainian units remain inside the towns, including the 145th Assault regiment and the 32nd, 35th, 38th and 155th Brigades. Reports indicate that more Ukrainian units have been moved into surrounding areas to hold the withdrawal corridor open.
Sky News reached out to the Ukrainian brigades still in Myrnohrad, but they declined to comment, citing military regulations.
Strategic significance
Natia Seskuria, associate international security fellow at the Royal United Services Institute (RUSI), explained that the area is important for the Ukrainians to keep and the Russians to take because of its strategic position.
“Situated at a major road and rail intersection in Donetsk Oblast, Pokrovsk has functioned as a central artery for moving troops, equipment, and supplies to Ukrainian units deployed along the surrounding front.”
Russia “would gain a platform to redirect its offensive efforts toward Ukraine’s principal defensive urban centres… including Kramatorsk and Slovyansk,” Seskuria said.
Read more:
Analysis – Ukraine and its allies are in a perilous moment
Analysis: Europe scrambles at G20 over Ukraine peace plane
G20 lands in South Africa: But who feels forgotten?
Ukrainian and Russian soldiers in Pokrovsk have fought intensely and at close quarters over the last month.
In late October US-made Black Hawk helicopters containing specialist troops directed by Ukrainian military intelligence entered Pokrovsk to try to keep the town.
But as Russian troops advance, Myrnohrad is becoming the last stronghold of Ukrainian forces in the area.
Uncertain future
At least up until 12 November, there were still civilians living in Pokrovsk and Myrnohrad, despite strikes on buildings in both cities.
Residents sit in an armoured vehicle as Ukrainian police officers evacuate them from Pokrovske on 11 November. Source: Reuters
A post made on that day by the Donetsk state regional administration estimated 1,200 people remain living in Pokrovsk and 900 in Myrnohrad.
Evacuation is only possible with the help of the military or police, and it is not clear how many have evacuated in the 11 days since.
Barros of ISW says gaining Pokrovsk would increase Russia’s leverage at the negotiating table.
“If the Russians can successfully convince enough international leaders that, okay, the Russians took Pokrovsk, they’re going to take the next thing, and they’re going take the thing, so now let’s negotiate, then that is a strategic victory for the Russians.”
Production by Michelle Inez Simon, Visual Investigations Producer.
The Data x Forensics team is a multi-skilled unit dedicated to providing transparent journalism from Sky News. We gather, analyse and visualise data to tell data-driven stories. We combine traditional reporting skills with advanced analysis of satellite images, social media and other open source information. Through multimedia storytelling we aim to better explain the world while also showing how our journalism is done.
Torrential rain, flooding and landslides has left more than 100 people dead or missing in Vietnam.
Rainfall has exceeded 74.8in (1.9 metres) in some parts of central Vietnam over the past week.
The region is a major coffee production belt and home to popular beaches, but it is also prone to storms and floods.
Fatalities have been reported in Dak Lak province and the neighbouring Khanh Hoa province.
Parts of Quy Nhon has been under several feet of water. Pic: picture-alliance/dpa/AP
Footage has been released by local police of a dramatic rescue, involving a drone which airlifted a stranded man to safety from an island in the middle of the Serepok River, Dak Lak province.
The government estimates the flooding has cost the economy around 8.98 trillion dong (£260m).
More than 235,000 houses were flooded and nearly 80,000 hectares of crops were damaged, Vietnam’s disaster agency said.
On Thursday, VietnamNet newspaper said that a suspension bridge on Da Nhim River in Lam Dong province had been swept away.
Video footage posted online showed the bridge being swallowed by the river in just a few seconds.
Naval forces have been deployed to help stranded citizens in Khanh Hoa, the Vietnam News Agency reported, adding that floodwaters had reached record highs in many areas.
Photos shared in state media reports showed residents, including children, sitting on the roofs of flooded houses in Khanh Hoa, Gia Lai and Dak Lak provinces.
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A seven-year-old girl was rescued late on Wednesday in Da Lat, the capital of Lam Dong province, after being buried by a landslide, the Nhan Dan newspaper reported.
The landslide, triggered by heavy rain, knocked down and buried part of the house where the girl was staying.
She was pulled out after an hour and a half and was taken to hospital with a broken leg, according to the report.
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