Former Tory minister calls on Nadhim Zahawi to step down

A former Conservative cabinet minister has called on Nadhim Zahawi to step down as party chairman pending an ethics investigation into his tax affairs.

Former Immigration Minister Caroline Nokes said the story distracted the Tories and the Prime Minister and that Zahawi should “stand aside” for the greater good.

It comes as Sunak’s official spokesman declined to say whether he believed Zahawi had been consistently honest about his tax affairs, saying that should be determined in an inquiry led by the prime minister’s ethics adviser.

On Monday, Sunak instructed his ethics adviser, Sir Laurie Magnus, to investigate Zahawi’s tax affairs but faces mounting pressure over whether he knew about the HMRC investigation when he appointed Zahawi to his cabinet.

It emerged that Zahawi had settled a multimillion-dollar tax dispute with HMRC, paying the penalty during his short time as Boris Johnson’s chancellor.

Related: Unanswered questions put Nadhim Zahawi’s political fate in the balance

Nokes said she welcomed the investigation as there are “too many unanswered questions” about the affair, but said Zahawi could not survive the onslaught of negative headlines.

“When you become history, you distract from everything the government is trying to do,” she told TalkTV. “There are countless examples of good, competent cabinet colleagues who got themselves into a mess, who resigned, and in some cases came back just months later, and I think to clear this up Nadhim should step aside and let the investigation run its course.”

Asked on Tuesday whether Sunak was convinced Zahawi had always told him the truth about taxes, the prime minister’s spokesman said there had been no discussion between the pair “at that particular level of detail.”

Asked if Sunak thought Zahawi was more sincere, the spokesman said: “I don’t have much to add other than what the Prime Minister presented yesterday. Currently, an independent adviser is conducting fact-finding work. And I think it’s right that he can do the job and not me cut it.”

No 10 sources claim that when ministers are vetted prior to appointment, HMRC officials only say if anyone has an outstanding tax case and nothing else, meaning Sunak would not be warned.

However, a government source told The Guardian No 10 that he knew about the penalty as part of a settlement with HMRC when Sunak appointed Zahawi, who is also a cabinet minister, to the role. Downing Street formally rejected the claim.

This system would also clearly indicate that Johnson had been warned about Zahawi’s tax matters, but nevertheless appointed him chancellor, and therefore ultimately responsible for the UK’s tax system, as previously reported.

Police Minister Chris Philp, sent to speak on behalf of the government on Tuesday, said he did not consider it appropriate for Zahawi to back down. He told BBC Breakfast: “I think it’s prudent that if there is an investigation, the person can continue to serve while the investigation is ongoing.

“We have a principle of innocence in this country until proven guilty. This applies to a whole range of different circumstances. But I don’t think it’s fair to jump to conclusions before the investigation is over.”

Philp reiterated claim #10 that Sunak had been told there were “no outstanding issues” with Zahawi’s tax affairs when he nominated him as Conservative Party chairman in the fall.

“As far as I know, at the time Nadhim Zahawi was appointed to his current post by the current prime minister, the prime minister was unaware of the previous summer back and forth,” he told Times Radio.

“And he was told there were no outstanding issues – tax issues – applicable at the time. Of course, after that, especially over the weekend that just passed, there were a lot of questions that came out publicly. And it was in response to that that the Prime Minister quite rightly announced this independent inquiry.”

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