Nadhim Zahawi sacked as Tory chairman over tax affairs row
Nadhim Zahawi has been sacked as Tory party chairman after an ethics inquiry into the handling of his tax affairs found a “serious breach” of the ministerial code.
Prime Minister Rishi Sunak had resisted earlier calls from opposition parties to sack Mr Zahawi as Tory party chairman following reports that he had paid a penalty as part of an estimated £4.8m settlement dispute with HMRC.
He had instead asked his new ethics adviser – Sir Laurie Magnus – to assess whether the settlement amounted to a breach of the ministerial code.
In a letter written by Sir Laurie to the PM this morning following the conclusion of the investigation, the ethics adviser said Mr Zahawi had “shown insufficient regard for the general principles of the ministerial code” and had not fulfilled the requirements of being an “honest, open and an exemplary leader”.
In a second letter written by the PM to Mr Zahawi following Sir Laurie’s findings, Mr Sunak said it is “clear that there has been a serious breach of the ministerial code” and announced the removal of the Tory chairman from his ministerial position.
Zahawi fired as Tory party chairman – politics latest
Mr Zahawi had faced pressure in recent days to quit as questions swirled about his finances even after he released a statement to “clear up some of the confusion”.
He admitted he paid what HMRC said “was due” after it “disagreed about the exact allocation” of shares in the YouGov polling company he co-founded – an error he said was “careless, not deliberate“.
But he did not disclose the size of the settlement or whether he paid a fine.
In the correspondence to Mr Sunak released by Downing Street, Sir Laurie said his overall judgement was that the “omissions” by Mr Zahawi regarding his tax affairs “constitute a serious failure to meet the standards set out in the ministerial code”.
In the four-page report to Mr Sunak, dated 29 January, Sir Laurie says:
• Mr Zahawi had a “delay in correcting an untrue public statement” made in July 2022 – in which he told Sky News reports of an investigation were “inaccurate, unfair and clearly smears”
• Mr Zahawi’s contact with HMRC began in April 2021 but he did not declare it
• He failed to declare the ongoing HMRC investigation when appointed as education secretary in October 2021
• He still did not mention the probe when appointed as chancellor in July 2022
• Mr Zahawi reached an in-principle settlement with HMRC in August 2022 – with a settlement in September 2022 along with a penalty – which was not disclosed until January 2023
• He again did not disclose the investigation when appointed Chancellor of the Duchy of Lancaster by former PM Liz Truss in September – or when made Tory party chairman by Mr Sunak in October
• Mr Zahawi “should have understood” that HMRC was investigating “a serious matter”
• The cabinet office “was not in a position to inform the appointing prime minister” about Mr Zahawi’s tax affairs as he failed to disclose the relevant information to the department
• Mr Zahawi’s conduct “has fallen below the high standards” that a PM should expect from ministers
• The Tory chairman showed “insufficient regard” for the ministerial code
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What’s going on with Zahawi’s taxes?
Informing Mr Zahawi of his decision to remove him from government, Mr Sunak wrote: “When I became prime minister last year, I pledged that the government I lead would have integrity, professionalism and accountability at every level.
“That is why, following new information which came to light in recent days regarding your personal financial arrangements and declarations, I asked Sir Laurie Magnus, the Independent Adviser on Ministers’ Interests, to fully investigate this matter.
“You agreed and undertook to cooperate fully with the inquiry.
“Following the completion of the independent adviser’s investigation – the findings of which he has shared with us both – it is clear that there has been a serious breach of the Ministerial Code.
“As a result, I have informed you of my decision to remove you from your position in His Majesty’s Government.”
The PM added that Mr Zahawi should be “extremely proud” of his “wide-ranging achievements in government over the last five years”, particularly crediting his “successful oversight of the COVID-19 vaccine procurement and deployment programme”.
Read more:
Who is Nadhim Zahawi? The politician sacked over his tax affairs?
Rishi Sunak: From Zahawi and Raab to seatbelt gaffe – the U-turns and scandals of his first months as PM
The row surrounding Mr Zahawi had centered on a tax bill over the sale of shares in YouGov – the polling firm he founded worth an estimated £27m – which were held by Balshore Investments, a company registered offshore in Gibraltar and linked to Mr Zahawi’s family.
Mr Zahawi had insisted he was “confident” he had “acted properly throughout”.
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Zahawi sacking ‘is brutal’
Labour, the Lib Dems and former Tory minister Caroline Nokes had publicly called for him to go.
In a statement on Sunday morning, the Lib Dems said Mr Zahawi should also step down from his role as an MP as he is “unfit to serve the people of Stratford-on-Avon”.
Read more:
What did Nadhim Zahawi do?
Will the curse of the cabinet awayday spark doom for Sunak?
But in a letter to Mr Sunak following his sacking – in which he made no apology for his actions – Mr Zahawi told the PM he can be “assured of my support from the backbenches in the coming years”.
He added that he is concerned “about the conduct from some of the fourth estate in recent weeks”, in a reference to the media.
Mr Zahawi said: “It has been, after being blessed with my loving family, the privilege of my life to serve in successive governments and make what I believe to have been a tangible difference to the country I love.”
He added: “I am sorry to my family for the toll this has taken on them.
“Your five priorities are the right priorities, and I will do whatever I can to help you deliver them.”
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PM took ‘decisive action’ following Zahawi report
Speaking shortly after Mr Zahawi’s sacking, Levelling Up Secretary Michael Gove told reporters Mr Sunak had taken “decisive action” following the publication of Sir Laurie’s report.
He added: “I don’t think Nadhim should resign as an MP, absolutely not.”
But Labour’s shadow education secretary Bridget Phillipson told Sky News the PM should have sacked Mr Zahawi before now.
“Despite the writing on the wall, the prime minister showed himself to be too weak to act.
“Rishi Sunak should have sacked Nadhim Zahawi a long time ago, just as he should have acted over Dominic Raab and Suella Braverman, but in his weakness he promoted them.”
It is understood that the PM is unlikely to appoint a new Conservative chairman by the end of Sunday.
They rose to their feet in ecstatic surprise, shouting “heydar, heydar” – a Shia victory chant.
This was the first public appearance of their supreme leader since Israel began attacking their country.
He emerged during evening prayers in his private compound. He said nothing but looked stern and resolute as he waved to the crowd.
He has spent the last weeks sequestered in a bunker, it is assumed, for his safety following numerous death threats from Israel and the US.
His re-emergence suggests a return to normality and a sense of defiance that we have witnessed here on the streets of Tehran too.
Earlier, we had filmed as men in black marched through the streets of the capital to the sound of mournful chants and the slow beat of drums, whipping their backs with metal flails.
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Defiance on streets of Tehran
This weekend they mark the Shia festival of Ashura as they have for 14 centuries. But this year has poignant significance for Iranians far more than most.
The devout remember the betrayal and death of Imam Hussein as if it happened yesterday. We filmed men and women weeping as they worshipped at the Imamzadeh Saleh Shrine in northern Tehran.
The armies of the Caliph Yazid killed the grandson of the Prophet Muhammad in the seventh-century Battle of Karbala.
Shiite Muslims mark the anniversary every year and reflect on the virtue it celebrates, of resistance against oppression and injustice.
But more so than ever in the wake of Israel and America’s attacks on their country.
The story is one of prevailing over adversity and deception. A sense of betrayal is keenly felt here among people and officials.
Listen to The World with Richard Engel and Yalda Hakim every Wednesday
Many Iranians believe they were lured into pursuing diplomacy as part of a ruse by the US.
Iran believed it was making diplomatic progress in talks with America it hoped could lead to a deal. Then Israel launched its attacks and, instead of condemning them, the US joined in.
Death to Israel chants resounded outside the mosque in skies which were filled for 12 days with the sounds of Israeli jets. There is a renewed sense of defiance here.
One man told us: “The lesson to be learned from Hussein is not to give in to oppression even if it is the most powerful force in the world.”
A woman was dismissive about the US president. “I don’t think about Trump, nobody likes him. He always wants to attack too many countries.”
Pictures on billboards nearby draw a line between Imam Hussein’s story and current events. The seventh-century imam on horseback alongside images of modern missiles and drones from the present day.
Other huge signs remember the dead. Iran says almost 1,000 people were killed in the strikes, many of them women and children.
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Officially Iran is projecting defiance but not closing the door to diplomacy.
Government spokeswoman Dr Fatemeh Mohajerani told Sky News that Israel should not even think about attacking again.
“We are very strong in defence and as state officials have announced, this time Israel will receive an even stronger response compared to previous times,” she said.
“We hope that Israel will not make such a mistake.”
But there is also a hint of conciliation: Senior Iranian officials have told Sky News that back-channel efforts are under way to explore new talks with the US.
Israel had hoped its attacks could topple the Iranian leadership. That proved unfounded, the government is in control here.
For many Iranians, it seems quite the opposite happened – the 12-day war has brought them closer together.
To the sound of mournful chants and the slow beat of drums, they march, whipping their backs with metal flails.
It is an ancient ceremony going back almost 14 centuries – the Shia commemoration of Ashura.
But this year in particular has poignant significance for Iranians.
The devout remember the betrayal and death of the Imam Hussein as if it happened yesterday.
Iranians gather ahead of Ashura
We filmed men and women weep as they worshipped at the Imamzadeh Saleh Shrine in northern Tehran.
The grandson of the Prophet Muhammad was killed by the armies of the Caliph Yazid in the seventh century Battle of Karbala.
Shia Muslims mark the anniversary every year and reflect on the virtue it celebrates – of resistance against oppression and injustice. But more so than ever this year, in the wake of Israel and America’s attacks on their country.
The story is one of prevailing over adversity and deception. A sense of betrayal is keenly felt here by people and officials.
Men and women weeped as they worshipped at the Imamzadeh Saleh Shrine
Many Iranians believe they were lured into pursuing diplomacy as part of a ruse by the US.
Iran believed it was making diplomatic progress in talks with America, which it hoped could lead to a deal. Then Israel launched its attacks and, instead of condemning them, the US joined in.
“Death to Israel” chants resounded outside the mosque in skies that for 12 days were filled with the sounds of Israeli jets.
There is a renewed sense of defiance here.
One man told us: “The lesson to be learned from Hussein is not to give in to oppression, even if it is the most powerful force in the world.”
‘I don’t think about Trump. Nobody likes him,’ one woman tells Sky News
A woman was dismissive about the US president.
“I don’t think about Trump. Nobody likes him. He always wants to attack too many countries.”
Pictures on billboards nearby link Imam Hussein’s story and current events. They show the seventh century imam on horseback alongside images of modern missiles and drones from the present day.
Other huge signs remember the dead. Iran says almost 1,000 people were killed in the strikes, many of them women and children.
Officially Iran is projecting defiance, but not closing the door to diplomacy.
Government spokeswoman Dr Fatemeh Mohajerani told Sky News that Israel should not even think about attacking again.
“We are very strong in defence, and as state officials have announced, this time Israel will receive an even stronger response compared to previous times. We hope that Israel will not make such a mistake.”
Dr Fatemeh Mohajerani said it would be a mistake for Israel to attack again
But there is also a hint of conciliation. Senior Iranian officials have told Sky News back-channel efforts are under way to explore new talks with the US.
Israel had hoped its attacks could topple the Iranian leadership. Those hopes proved unfounded. The government is in control here.
For many Iranians it seems quite the opposite happened – the 12-day war has brought them closer together.
World
Two security workers injured after grenades thrown at aid site, Gaza Humanitarian Foundation says
Two American security workers in Gaza were injured after grenades were thrown during food distribution in Khan Younis, the Gaza Humanitarian Foundation (GHF) has said.
In a statement, the US and Israeli-backed aid group said a targeted terrorist attack was carried out at one of its sites in southern Gaza on Saturday morning.
The two Americans injured “are receiving medical treatment and are in stable condition,” it said, adding that the delivery of aid was “otherwise successful” and that “no local aid workers or civilians were harmed”.
GHF didn’t say exactly when the incident happened but claimed Hamas was behind the attack, adding: “GHF has repeatedly warned of credible threats from Hamas, including explicit plans to target American personnel, Palestinian aid workers, and the civilians who rely on our sites for food.
“Today’s attack tragically affirms those warnings.”
Later, the aid group posted a picture on social media, which it said showed “fragments of a grenade packed with ball bearings” that was used in the attack.
Asked by Sky’s US partner network, NBC News, whether the two injured individuals were responsible for handing out aid or were responsible for providing security, GHF said they were “American security workers” and “two American veterans.”
The aid group did not provide specific evidence that Hamas was behind the attack.
The US and Israeli-backed group has been primarily responsible for aid distribution since Israel lifted its 11-week blockade of the Gaza Strip in May.
Read more:
Hamas gives ‘positive’ response to ceasefire proposal
Outcry as Israeli strike hits school
94 killed in Israeli strikes in Gaza, health staff say
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It comes after Sky News analysis showed GHF aid distributions are associated with a significant increase in deaths in Gaza.
According to Gaza’s health ministry, 600 Palestinians have been killed while seeking aid from GHF sites as of 3 July, which charities and the UN have branded “death traps”.
Meanwhile, the Associated Press has reported that Israeli-backed American contractors guarding GHF aid centres in Gaza are using live ammunition and stun grenades.
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Contractors allege colleagues ‘fired on Palestinians’
GHF has vehemently denied the accusations, adding that it investigated AP’s allegations and found them to be “categorically false”.
Israel’s military added that it fires only warning shots and is investigating reports of civilian harm.
It denies deliberately shooting at any innocent civilians and says it’s examining how to reduce “friction with the population” in the areas surrounding the distribution centres.
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