Ex-chancellor Philip Hammond says he would not have accepted job if taxes were under investigation
The former chancellor Philip Hammond said he would not have accepted the job if he was being investigated by the tax office.
Asked by Sky News if it was “acceptable” that Nadhim Zahawi paid a penalty to HM Revenue & Customs to settle a tax dispute while in charge of the Treasury, Mr Hammond said: “My own personal view is that I would not want to accept the office of chancellor if I was at that time involved in a live negotiation of an outstanding tax case with HMRC.”
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Mr Zahawi was chancellor in the closing days of the Boris Johnson administration and Mr Hammond said the former prime minister “has questions to answer” about his appointment to the cabinet.
“If he was aware of these issues, then I think the question falls at his door,” he said.
“Why did he appoint somebody to this role who clearly was not in a position to carry out that function?”
Mr Sunak has asked his ethics adviser to investigate whether Mr Zahawi, now the Tory party chairman, breached the ministerial code with the estimated £4.8m HMRC settlement he made while he was chancellor, but it could extend to his previous tax arrangement and whether he lied to the media.
Mr Hammond was chancellor under Theresa May and has previously said Mr Johnson was “not a good prime minister”.
Philip Hammond was chancellor during the Theresa May administration
Asked if Simon Case, the cabinet secretary who advises the PM, should take some blame, Lord Hammond said: “Well, ultimately it’s the prime minister who makes the decision who to appoint, who not to appoint to his cabinet, and what offices they should hold.
“It would have been a very different question if Nadhim Zahawi was being appointed to a different office of state.
“But the chancellor does have responsibility for HMRC, and I think that makes it very difficult for any individual being in a position of effectively negotiating with yourself a tax settlement.”
On Saturday, Mr Zahawi released a statement saying he had paid what HMRC said “was due” after it “disagreed about the exact allocation” of shares in YouGov, the polling company he founded.
The senior Tory MP said this was a “careless and not a deliberate error” and did not confirm if any penalty was also levied. But Sky News understands that as part of the settlement with HMRC – thought to be around £4.8m – the chairman paid a penalty.
‘No penalties for innocent errors’
HMRC chief executive Jim Harra said carelessness “is a concept in tax law” and people aren’t penalised if they make an “innocent error” with their tax affairs.
Appearing before MPs at the Public Accounts Committee, he stressed he was not talking about a specific case but said: “There are no penalties for innocent errors in your tax affairs so if you take reasonable care but nevertheless make a mistake, whilst you would be liable for the tax and for interest if it’s paid late, you would not be liable for a penalty.
“But if your error was as a result of carelessness then legislation says a penalty could apply in those circumstances.”
Mr Sunak has faced calls to sack Mr Zahawi, with Labour leader Sir Keir Starmer branding him “hopelessly weak” for failing to do so.
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Keir Starmer asks Rishi Sunak about Nadhim Zahawi’s tax affairs
The prime minister told PMQs that while it would have been “politically expedient” to fire the cabinet minister, “due process” meant that the investigation into his tax affairs should be allowed to reach its conclusion.
No time scale has been set for the investigation, but Mel Stride, the work and pensions secretary, told ITV’s Peston programme it could be done within 10 days.
Trade minister Andrew Bowie has said Mr Sunak will “of course” sack Mr Zahawi if he has been found to have breached the ministerial code – but on Thursday Downing Street declined to get into hypotheticals and insisted the PM still had confidence in the embattled MP.
Mr Sunak is expected to be joined by Mr Zahawi when the cabinet meets for an away day at the prime minister’s grace-and-favour country house today.
The meeting at Chequers in Buckinghamshire is expected to focus on the government’s priorities for the country, but it has branded a “hideaway day” by the Lib Dems, who have accused the PM of “dodging scrutiny”.
Donald Trump’s Middle East envoy has met Israel’s prime minister in an effort to secure a ceasefire deal in Gaza before the president-elect takes office on 20 January.
Benjamin Netanyahu’s office confirmed details of the meeting with Steve Witkoff on Saturday, adding that the head of the Israeli Mossad intelligence agency has been deployed to Qatar in order to “advance” talks.
It was not immediately clear when David Barnea would travel to Doha for the latest round of indirect discussions between Israel and Hamas.
Earlier on Saturday, an Israeli official said some progress had been made, mediated by Egypt, Qatar and the United States, to reach a deal in Gaza.
Ronen Bar (left), director of Israel’s security agency, and David Barnea (right), head of Mossad, at a ceremony marking the 7 October Hamas attack. File pic: Reuters
The mediators are making renewed efforts to halt fighting in Gaza and free the remaining Israeli hostages held there before Mr Trump takes office.
A deal would also involve the release of some Palestinian prisoners held in Israeli jails.
Families of Israeli hostages welcomed Mr Netanyahu’s decision to dispatch the officials, with the Hostages and Missing Families Forum Headquarters describing it as a “historic opportunity”.
Mr Witkoff arrived in Doha on Friday and met the Qatari Prime Minister Sheikh Mohammed bin Abdulrahman Al Thani, Qatar’s foreign ministry said.
Egyptian and Qatari mediators received reassurances from Mr Witkoff that the US would continue to work towards a fair deal to end the war soon, Egyptian security sources said, though no further details were released.
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Israel launched its assault on Gaza after Hamas fighters stormed across its borders in October 2023, killing 1,200 people and taking more than 250 hostages, according to Israeli figures.
Families of the roughly 100 hostages still held in Gaza are pressing Mr Netanyahu to reach a deal to bring their loved ones home.
Since then, more than 46,000 people have been killed in Gaza, according to Palestinian health officials, with much of the area destroyed and gripped by a humanitarian crisis, with most of its population displaced.
Pope Francis has been honoured with America’s highest civilian award by President Joe Biden, who has described the pontiff as “a light of faith, hope, and love that shines brightly across the world”.
It is the first time Mr Biden, 82, has given the Presidential Medal of Freedom with Distinction during his four years in office.
In a statement, the White House said the award is “presented to individuals who have made exemplary contributions to the prosperity, values, or security of the United States, world peace, or other significant societal, public or private endeavours”.
Mr Biden had been scheduled to present the medal to Pope Francis, 88, in person on Saturday in Rome on what was to be the final overseas trip of his presidency. But the president cancelled his visit to monitor the California wildfires.
The White House said Mr Biden bestowed the award during a phone call in which they also discussed efforts to promote peace and alleviate suffering around the world.
President Joe Biden presented Bono with the Presidential Medal of Freedom. Pic: AP
Denzel Washington was also recognised. Pic: AP
Michael J Fox was bestowed with the honour. Pic: AP
The award can be presented with or without distinction.
Mr Biden presented the medal of freedom – without distinction – on 5 January to several people including fellow Democrat Hillary Clinton, humanitarian and U2 singer Bono, fashion designer Ralph Lauren and actors Michael J Fox and Denzel Washington.
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Mr Biden himself is a recipient of the award with distinction, recognised when he was vice president by then president Barack Obama in a surprise ceremony eight years ago.
Barack Obama presented Joe Biden with the Presidential Medal of Freedom with Distinction in 2017. File pic: AP
The citation for the pope’s honour said his “mission of serving the poor has never ceased”.
“A loving pastor, he joyfully answers children’s questions about God. A challenging teacher, he commands us to fight for peace and protect the planet. A welcoming leader, he reaches out to different faiths,” it added.
Ukraine has captured two North Korean soldiers fighting in Russia’s Kursk region, President Volodymyr Zelenskyy has said.
The injured pair are now in Kyiv and communicating with the Security Service of Ukraine, the country’s domestic intelligence agency, he said.
Ukrainian special forces and paratroopers captured the North Koreans, Mr Zelenskyy said in a post on X.
“As with all prisoners of war, these two North Korean soldiers are receiving the necessary medical assistance,” he said.
“I have instructed the Security Service of Ukraine to grant journalists access to these prisoners.
“The world needs to know the truth about what is happening.”
Mr Zelenskyy said capturing the soldiers alive was “not easy”. He also claimed Russian and North Korean forces fighting in Kursk have tried to conceal the presence of North Korean soldiers, including by killing wounded comrades on the battlefield to avoid their capture and interrogation by Ukraine.
The post included images of the two men – one with a bandage around his jaw and the other around both hands and wrists – and what appeared to be a Russian military document.
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Ukraine’s security service SBU on Saturday provided further details.
It said one of those detained had no documents at all, while the other had been carrying a Russian military ID card in the name of a man from Tuva, a Russian region bordering Mongolia.
“The prisoners do not speak Ukrainian, English or Russian, so communication with them takes place through Korean translators in cooperation with South Korean intelligence,” a statement said.
One of the soldiers claimed he had been told he was going to Russia for training, rather than to fight against Ukraine, according to the SBU.
The agency added both men are being provided with medical care in line with the Geneva Conventions, and investigated “in cooperation with South Korean intelligence”.
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North Korean regular troops entered the war on Russia’s side in October, according to Ukraine and its Western allies.
US, South Korean and Ukrainian intelligence assessments suggest up to 12,000 North Korean combat troops have been sent by Pyongyang under a pact with Moscow.
They believe North Korea has also been supplying Russia with vast quantities of artillery shells.
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