Fraser Nelson Fraser Nelson

Do we really have the full story about the Zahawi affair?

(Credit: Getty images)

Why was Nadhim Zahawi fired? Today’s report by Laurie Magnus, the PM’s adviser on ministerial interests, says it’s a question of honesty and disclosure. HMRC started talking to Zahawi about his tax affairs in April 2021 but this became a formal investigation shortly after he became Chancellor on 5 July last year. By this time, he had been knocked out of the Tory leadership race. He had agreed to pay a penalty and the matter was closed. But he’s accused of keeping this hidden and has, it seems, been fired for the secrecy.

The Magnus report goes into detail about the offense. A minister facing an HMRC investigation would have been expected ‘to inform their permanent secretary and seek advice’, it says (paragraph 9) and then ‘update their declaration of interests form’. We’re left to believe that Zahawi did neither, thereby committing a career-ending breach of the ministerial code.

But is it really so? Allies of Zahawi say he did tell Tom Scholar, the then Treasury Permanent Secretary, about both the HMRC investigation and the penalty paid. And that his ministerial register of interests was up to date in September, when Liz Truss appointed him Chancellor of the Duchy of Lancaster. So it’s a puzzle. Zahawi believes the Cabinet office authorities were fully in the picture when Zahawi was made Tory Chairman a month afterwards.

Why condemn Zahawi – fire him – without properly hearing him out?

Zahawi, I understand, had hoped to go through all of this in a second meeting with Magnus next week. But he was told last night that their brief 30-minute meeting last week would be the end of it – and the final report would come out today. If so, this would also be odd: why such a short meeting? Why condemn him – fire him – without properly hearing him out? And if it was just a 30-minute meeting with the later session abandoned, why not say so?

Zahawi has said little in public, save for stressing that Sunak has his support.

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