Nadhim Zahawi sacked: What Sir Laurie Magnus found in his tax row probe
Nadhim Zahawi’s failure to disclose that he was in discussions with HMRC over his taxes was a “serious failure to meet” ministerial standards, a damning report into the affair has found.
Sir Laurie Magnus, who carried out the investigation as the prime minister’s new ethics adviser, said the former chancellor “should have understood” from the outset that he was under investigation by HMRC and that it was a “serious matter”.
He also criticised the MP for Stratford-on-Avon for failing to correct the record for more than six months, after he dismissed reports that HMRC was “looking into” his tax affairs as “smears” during a July 2022 interview with Sky News’s Kay Burley.
Mr Zahawi was sacked as Tory party chairman on Sunday by Prime Minister Rishi Sunak following the publication of Sir Laurie’s report, which looked into whether the former minister had fallen foul of the ministerial code.
Here Sky News looks at the key points in Sir Laurie’s report:
‘Mr Zahawi should have understood this was a serious matter’
“Mr Zahawi has told me that he had formed the impression that he and his advisers were merely being asked certain queries by HMRC concerning his tax affairs, and that this impression persisted until he received a letter from HMRC on 15 July 2022.
Sir Laurie Magnus
“On the basis of the confidential information to which I have had access, including correspondence between HMRC and Mr Zahawi personally, I consider that an individual subject to the HMRC process faced by Mr Zahawi should have understood at the outset that they were under investigation by HMRC and that this was a serious matter.”
‘Investigation was a relevant matter for a minister to declare’
“I consider that an HMRC investigation of the nature faced by Mr Zahawi would be a relevant matter for a Minister to discuss and declare as part of their declaration of interests.
“I would expect a Minister to inform their Permanent Secretary and to seek their advice on any implications for the management of their responsibilities.
Politics news – latest: Zahawi attacks media after sacking
“I would likewise expect a Minister proactively to update their declaration of interests form to include details of such an HMRC process.”
‘Mr Zahawi’s failure to declare investigation did not meet ministerial standards’
“After his appointment as Chancellor on 5 July 2022, Mr Zahawi completed a declaration of interests form which contained no reference to the HMRC investigation.
“A later form acknowledged (by way of an attachment) that Mr Zahawi was in discussion with HMRC to clarify a number of queries.
“Only following receipt of HMRC’s letter received on 15 July 2022, did Mr Zahawi update his declaration of interests form to acknowledge that his tax affairs were under investigation, but he provided no further details other than the statement made previously that he was clarifying queries.
“Given the nature of the investigation by HMRC, which started prior to his appointment as Secretary of State for Education on 15 September 2021, I consider that by failing to declare HMRC’s ongoing investigation before July 2022 – despite the ministerial declaration of interests form including specific prompts on tax affairs and HMRC investigations and disputes – Mr Zahawi failed to meet the requirement to declare any interests which might be thought to give rise to a conflict.”
‘Mr Zahawi failed to declare HMRC investigation ended in penalty’
“The subsequent fact that the investigation concluded with a penalty in relation to the tax affairs of a Minister also requires declaration and discussion.
“It is a relevant interest which could give rise to a conflict, and particularly so in the case of HM Treasury Ministers and the Chancellor of the Exchequer, who has responsibility for the UK tax system.
Read more:
Nadhim Zahawi sacked as Tory chairman over tax affairs row
In full: Prime Minister Rishi Sunak’s letter sacking Nadhim Zahawi
“As a result of my inquiries, I conclude that Mr Zahawi failed to update his declaration of interest form appropriately after this settlement was agreed in principle in August 2022.
“It was not until mid-January 2023 that details of the earlier HMRC investigation and its outcome were declared.”
‘Omissions constitute a serious failure to meet ministerial standards’
“I also conclude that, in the appointments process for the governments formed in September 2022 and October 2022, Mr Zahawi failed to disclose relevant information – in this case the nature of the investigation and its outcome in a penalty – at the time of his appointment, including to Cabinet Office officials who support that process.
“Without knowledge of that information, the Cabinet Office was not in a position to inform the appointing Prime Minister.
“Taken together, I consider that these omissions constitute a serious failure to meet the standards set out in the Ministerial Code.”
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Zahawi in July 2022: ‘I’ve always declared my taxes’
Nadhim Zahawi’s interview with Sky News in July 2022
What Mr Zahawi said:
“There have been news stories over the last few days which are inaccurate, unfair and are clearly smears. It’s very sad that such smears should be circulated and sadder still that they have been published.
“These smears have falsely claimed that the Serious Fraud Office, the National Crime Agency, and HMRC are looking into me. Let me be absolutely clear. I am not aware of this. I have not been told that this is the case.
“I’ve always declared my financial interests and paid my taxes in the UK. If there are questions, of course, I will answer any questions HMRC has of me.”
What Sir Laurie said about the statement:
“Mr Zahawi has told me that at the time of this statement, he was under the impression that he was answering HMRC’s queries, but that he was not under investigation.
“I consider that an individual subject to the HMRC process faced by Mr Zahawi should have understood that they were under investigation by HMRC and that this was a serious matter.
“Under the Ministerial Code, Ministers have a duty to ‘be as open as possible with Parliament and the public’.
“Whilst this duty clearly does not extend to disclosing personal tax information, it does include a general duty to be accurate in statements to ensure a false impression is not given or maintained.
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PM took ‘decisive action’ on Zahawi, says Gove
“Mr Zahawi did not correct the record until 21 January 2023, when Mr Zahawi’s public statement indicated that he had reached a settlement with HMRC following an investigation.
“I consider that this delay in correcting an untrue public statement is inconsistent with the requirement for openness.”
‘Insufficient regard for Ministerial Code’
“I consider that Mr Zahawi, in holding the high privilege of being a Minister of the Crown, has shown insufficient regard for the General Principles of the Ministerial Code and the requirements in particular, under the seven Principles of Public Life, to be honest, open and an exemplary leader through his own behaviour.
“I want to commend Mr Zahawi for his willingness to assist with my inquiry. I also fully appreciate the pressures faced by Ministers as they address the complex issues of government and the difficulties they encounter in balancing the demands of their personal lives and their ministerial responsibilities.
“These factors, however, cannot mitigate my overall judgement that Mr Zahawi’s conduct as a Minister has fallen below the high standards that, as Prime Minister, you rightly expect from those who serve in your government.”
World
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The COP29 climate talks have reached a last ditch deal on cash for developing countries, pulling the summit back from the brink of collapse after a group of countries stormed out of a negotiating room earlier.
The slew of deals finally signed off in the small hours of Sunday morning in Azerbaijan includes one that proved hardest of all – one about money.
Eventually the more than 190 countries in Baku agreed a target for richer polluting countries such as the UK, EU and Japan to drum up $300bn a year by 2035 to help poorer nations both curb and adapt to climate change.
It is a far cry from the $1.3trn experts say is needed, and from the $500bn that vulnerable countries like Uganda had said they would be willing to accept.
But in the end they were forced to, knowing they could not afford to live without it, nor wait until next year to try again, when a Donald Trump presidency would make things even harder.
Bolivia’s lead negotiator Diego Pacheco called it an “insult”, while the Marshall Islands’ Tina Stege said it was “not nearly enough, but it’s a start”.
UN climate chief Simon Stiell said: “This new finance goal is an insurance policy for humanity, amid worsening climate impacts hitting every country.
“No country got everything they wanted, and we leave Baku with a mountain of work still to do. So this is no time for victory laps.”
The funding deal was clinched more than 24 hours into overtime, and against what felt like all the odds.
The talks were rocked from the start by the incoming presidency of climate denier Mr Trump, the moment Argentina’s team were recalled back to Buenos Aires by their right-wing president and a controversial letter that sent shockwaves through the United Nations.
Pic: AP
The fraught two weeks of negotiations pitted the anger of developing countries who are footing the bill for more dangerous weather that they did little to cause, against the tight public finances of rich countries.
A relieved Juan Carlos Monterrey Gomez, climate envoy for Panama, said there is “light at the end of the tunnel”.
Just hours ago, the talks almost fell apart as furious vulnerable nations stormed out of negotiations in frustration over that elusive funding goal.
They were also angry with oil and gas producing countries, who stood accused of trying to dilute aspects of the deal on cutting fossil fuels.
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Climate-vulnerable nations storm out of talks
The UN talks work on consensus, meaning everyone has to agree for a deal to fly.
A row over how to follow up on last year’s pledge to “transition away from fossil fuels” was left unresolved and punted into next year, following objections from Chile and Switzerland for being too weak.
A draft deal simply “reaffirmed” the commitment but did not dial up the pressure in the way the UK, EU, island states and many others here wanted.
Saudi Arabia fought the hardest against any step forward on cutting fossil fuels, the primary cause of climate change that is intensifying floods, drought and fires around the world.
Governments did manage to strike a deal on carbon markets at COP29, which has been 10 years in the making and will allow countries to trade emissions cuts.
‘Not everything we wanted’
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The UK’s energy secretary, Ed Miliband, said the deal is “not everything we or others wanted”, but described it as a “step forward”.
“It’s a deal that will drive forward the clean energy transition, which is essential for jobs and growth in Britain and for protecting us all against the worsening climate crisis,” he added.
“Today’s agreement sends the signal that the clean energy transition is unstoppable.
“It is the biggest economic opportunity of the 21st century and through our championing of it we can help crowd in private investment.”
Protesters at the summit in Baku. Pic: AP
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The Azerbaijan team leading COP29 said: “Every hour of the day, we have pulled people together. Every inch of the way, we have pushed for the highest common denominator.
“We have faced geopolitical headwinds and made every effort to be an honest broker for all sides.”
At least 20 people have been killed and 66 injured in Israeli strikes on central Beirut, Lebanese authorities have said.
Lebanon‘s health ministry said the death toll could rise as emergency workers dig through the rubble looking for survivors. DNA tests are being used to identify the victims, the ministry added.
The attack destroyed an eight-storey residential building and badly damaged several others around it in the Basta neighbourhood at 4am (2am UK time) on Saturday.
The central Basta neighbourhood in Beirut
The Israeli military did not warn residents to evacuate before the attack and has not commented on the casualties.
At least four bombs were dropped in the attack – the fourth targeting the city centre this week.
A separate drone strike in the southern port city of Tyre this morning killed two people and injured three, according to the state-run National News Agency.
The victims were Palestinian refugees from the nearby al Rashidieh camp who were out fishing, according to Mohammed Bikai, spokesperson for the Fatah Palestinian faction in the Tyre area.
Israel’s military warned residents today in parts of Beirut’s southern suburbs that they were near Hezbollah facilities, which the army would target in the near future. The warning, posted on X, told people to evacuate at least 500 metres away.
The army said that over the past day it had conducted intelligence-based strikes on Hezbollah targets in Dahiyeh, in Beirut’s southern suburbs, where Hezbollah has a strong presence. It said it hit several command centres and weapons storage facilities.
Pic: AP
Israel has killed several Hezbollah leaders in air strikes on the capital’s southern suburbs.
Heavy fighting between Israel and Hezbollah is ongoing in southern Lebanon, as Israeli forces push deeper into the country since launching a major offensive in September.
According to the Lebanese health ministry, at least 3,670 people have been killed in Israeli attacks there, with more than 15,400 wounded.
It has displaced about 1.2 million people – a quarter of Lebanon’s population – while Israel says about 90 soldiers and nearly 50 civilians have been killed in northern Israel.
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‘Dozens’ of Palestinians killed in Israeli airstrike
Meanwhile, six people, including three children and two women, were killed in the southern Gazan city of Khan Younis.
Some 44,176 Palestinians have been killed since the start of Israel’s military campaign in Gaza, according to the Gaza health ministry.
The ministry does not distinguish between civilians and combatants in its count, but it has said that more than half of the fatalities are women and children.
The war began when Hamas-led militants stormed into southern Israel on 7 October 2023, killing some 1,200 people and taking another 250 hostage.
US envoy Amos Hochstein was in the region this week to try to end more than 13 months of fighting between Israel and Hezbollah, ignited last October by the war in Gaza.
Mr Hochstein indicated progress had been made after meetings in Beirut on Tuesday and Wednesday, before going to meet Israeli Prime Minister Benjamin Netanyahu and defence minister Israel Katz.
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