Nadhim Zahawi should stand aside during probe, says Tory MP

Nadhim Zahawi should stand aside as Conservative chairman during an inquiry into his taxes, former Tory minister Caroline Nokes has said.

Rishi Sunak has asked his ethics adviser to investigate Mr Zahawi’s financial affairs, saying there are “questions that need answering”.

Mr Zahawi is facing opposition calls to resign after reaching a settlement with HMRC over previously unpaid tax.

But a fellow minister said he should be allowed to stay on during the probe.

Chris Philp, a minister at the Home Office, added it was “reasonable” for him to stay in post, and it wouldn’t be fair to “jump to any conclusions”.

He also defended the prime minister’s handling of the controversy, after he initially told MPs last week Mr Zahawi had “addressed this matter in full”.

Mr Philp added that Mr Sunak had launched the investigation after “extra facts came to light” over the weekend.

Mr Sunak had been told when appointing Mr Zahawi Conservative Party chairman in October that his taxes were “in order,” Mr Philp added.

Mr Zahawi confirmed on Saturday that he had made a payment to settle a dispute with HM Revenue & Customs (HMRC), adding that the tax authority accepted the error was “careless and not deliberate”.

The BBC understands the dispute was resolved between July and September last year, when Mr Zahawi was chancellor under Boris Johnson, and that the total amount paid is in the region of about £5m, including a penalty.

The tax was related to a shareholding in YouGov, the polling company he co-founded in 2000 before he became an MP.

Mr Zahawi has not confirmed how much his penalty amounted to, nor the total value of the final settlement with HMRC.

On Monday, a spokesperson for Mr Sunak suggested he was not aware last week that Mr Zahawi had paid a penalty as part of his settlement.

The prime minister has asked Sir Laurie Magnus, his newly-appointed ethics adviser, to examine whether Mr Zahawi broke the code of conduct on ministerial behaviour.

Mr Zahawi said that during the probe he would stay on as Conservative chairman, a role in which he is responsible for party administration and political campaigning.

He pledged to co-operate with the inquiry, adding he was confident he had “acted properly throughout”.

The investigation could prove problematic for the Tory party, given Mr Zahawi would be expected appear frequently in the media in the coming weeks ahead of local elections in May.

Speaking to BBC Breakfast on Tuesday, Ms Nokes, who chairs the Commons women and equalities committee, said Mr Zahawi should “temporarily” stand down during the investigation.

She added that “for his own sake” he should “allow some space” between the probe and his chairman role, as part of which he attends cabinet.

She also urged him to “come clean on all of the questions being posed” into his affairs by journalists and others.

Opposition parties have called on Mr Zahawi to resign immediately, with Labour leader Sir Keir Starmer calling his position “untenable”.

Shadow foreign secretary David Lammy said on Tuesday he was becoming a “huge distraction” for the government from the cost of living, strikes and the state of the NHS.