Rishi Sunak will sack Nadhim Zahawi if rule breach found, say Tory MPs

PM will fire Tory chair if he ‘falls foul’ of ethics probe, says trade minister Andrew Bowie

Rishi Sunak will sack Conservative chair Nadhim Zahawi if he is judged to have “fallen foul” of the ministerial code, Tory trade minister Andrew Bowie has said.

Tory MPs told The Independent they believe that Mr Sunak was “increasingly irritated” with Mr Zahawi and was preparing to fire him if Sir Laurie Magnus’ probe into the tax saga found any wrongdoing.

Appearing to distance himself from his cabinet colleague at PMQs, Mr Sunak suggested it would have been “politically expedient” to have sacked the Tory chair – but that he wanted the ethics adviser’s probe to play out.

Mr Bowie – a close Sunak ally – told BBC Politics Live: “If [Mr Zahawi] is found to have fallen foul in this report, the prime minister will of course sack him.”

Asked about those comments, senior Tory MP David Davis told The Independent: “He will have been authorised to say that, I think. At the end of the process, either he’s safe or he goes – there won’t be any grey area. What’s the half-penalty?”

One Tory MP said they were “sure” that Mr Sunak would sack Mr Zahawi if he was found to have broken the ministerial code. “He will have to. Otherwise the speech outside No 10 [and vow to bring ‘integrity’] is a busted flush.”

A former minister told The Independent that Mr Sunak’s remarks at PMQs showed he was “clearly becoming increasingly irritated” with Mr Zahawi. The senior Tory added: “Nadhim would be very wise to step down, even if he announces it is only on a temporary basis.”

Despite Mr Bowie’s remarks, No 10 suggested Mr Sunak may not sack Mr Zahawi even if he breached the ministerial code. The PM’s spokesperson said: “Recently the code was updated so it’s no longer a binary decision.”

Changes to the ministerial code – which demands ministers are transparent and honest –allows ministers to apologise and temporarily lose their pay rather than having to resign for any breaches.

Mr Zahawi dismissed reports of an HMRC review into his taxes – first revealed by The Independent last year – as a “smear”, but on Saturday he admitted he had settled a tax dispute.

The former chancellor has not yet disclosed the precise details of the HMRC settlement, which is reportedly about £4.8m – including 30 per cent penalty of around £1m. His spokesperson has not denied the penalty or the overall sum.

Tory MP Nigel Mills said the investigation will not end the questions he is facing – calling on the party chair to explain why he was fined by HMRC.

“A 30 per cent penalty is serious,” Mr Mills told The Independent. “It’s not really a ministerial code problem, it’s a how can you be in cabinet if you paid a £1m tax penalty problem.”

The Amber Valley MP added: “I like Nadhim, he’s done so good work. But he has to come out and explain what happened. We have to have a public answer to those questions … if he can’t explain it, then clearly his position won’t be tenable.”

Sir Keir Starmer tried to draw a link at PMQs between Mr Sunak’s handling of the current mess and his billionaire wife Akshata Murty, after The Independent revealed she had held non-dom tax status that could have reduced her UK tax bill.

The Labour leader said: “We all know why the prime minister was reluctant to ask his party chair questions about family finances and tax avoidance.”

Sir Keir said Mr Sunak’s failure to sack the Tory chair after his admission shows he is “hopelessly weak”, adding: “Is he starting to wonder if this is this job is just too big for him?”

No 10 was unable to say whether Mr Sunak is confident no more damaging surprises will emerge about Mr Zahawi’s tax affairs. “I don’t think any of us can predict what may come up,” said his press secretary.

The spokesperson added: “The prime minister was given assurances that it had been dealt with prior to what he said in the House of Commons [last] Wednesday.”

Mr Sunak expects to receive his ethics adviser’s report into Mr Zahawi’s tax affairs in 10 days, according to ITV’s Robert Peston. Mr Davis told The Independent: “If I were Rishi, I would give him a week – do not let it run.”

Mr Zahawi will join Mr Sunak and the rest of his cabinet will decamp to Chequers for an away day on Thursday. The outing, which No 10 said would focus on the PM’s political priorities, was dubbed a “hideaway day” by opposition parties.

More senior Tory figures joined Caroline Nokes in calling on Mr Zahawi to resign on Wednesday. Tory peer Lord Hayward said he should step aside, at least until the inquiry concludes – warning that the saga could help “flatline” Tory popularity ahead of the local elections.

Despite the pressure, Mr Zahawi is said to be determined to remain in cabinet and stay on as Tory chair. Tory MP Bim Afolami told TalkTV that Mr Zahawi had told colleagues that “he hasn’t done anything wrong”.