The Labour leader told the Prime Minister his failure to sack Mr Zahawi shows “how hopelessly weak he is” and accused the PM of overseeing chaos and being “overwhelmed at every turn”.
Mr Sunak has suggested it would have been "politically expedient" to sack the Conservative party chair but insisted that "due process" means the investigation by his ethics advisor into his tax affairs should be allowed to reach its conclusion.
The Prime Minister acknowledged that he had not been given the full picture about the Tory chairman's financial matters when he told MPs last week that Mr Zahawi had given a "full" account over the estimated £4.8 million bill he settled with HMRC.
But he insisted that when he entered No 10 and gave Mr Zahawi, who was not in the Commons for PMQs, the job of Minister Without Portfolio "no issues were raised with me".
David Gauke, the former Justice Secretary, earlier became the latest senior Conservative figure to call for Mr Zahawi to resign.
He told BBC Radio 4’s Today Programme that if he was the Prime Minister he would be “very tempted” to encourage him to stand down.
On Tuesday night, the former Attorney general Dominic Grieve told Newsnight: “If I were Prime Minister I would call Nadhim Zahawi in and I would say to him please explain exactly what’s happened. Because it doesn’t need an investigation. You’ve got to tell me what it is.
“And unless Nadhim Zahawi can make out the case that in this matter there’s been some unfortunate mistake which leaves him entirely blameless, it seems to me that following proper practice he ought to be resigning.”
But a Tory source said of Mr Zahawi this morning: “He is not resigning.
PMQs live coverage ends
14:43 , Josh Salisbury
Thank you for joining our live coverage of PMQs.
You can read some of our coverage from the event here.
Labour: Carry out Zahawi probe as quickly as possible
14:09 , Josh Salisbury
Labour has called on the ethics investigation into Nadhim Zahawi to be carried out and completed as “quickly as possible”.
The party has already urged the Prime Minister to sack the Tory chairman, with Sir Keir Starmer grilling Rishi Sunak on the issue in the Commons on Wednesday.
A party spokesman said that now an investigation is under way, “like everyone, we just think it should conclude as quickly as possible”.
Rishi Sunak to publish tax return ‘in due course'
13:39 , Miriam Burrell
Downing Street has repeatedly declined to say whether Rishi Sunak has ever paid a tax penalty like Tory chairman Nadhim Zahawi did.
Instead, the Prime Minister’s press secretary said: “You wouldn’t expect me to get into the Prime Minister’s tax affairs, they are confidential.
“The tax affairs of an individual, irrespective of who they are, are confidential.”
Mr Sunak will, however, publish his tax return “in due course”.
The press secretary would not commit to the publishing of six years of the Prime Minister’s tax returns, as David Cameron did.
Shadow Chancellor says PM ‘too weak to deal with own ministers'
13:20 , Miriam Burrell
Shadow Chancellor Rachel Reeves has said the Prime Minister is “too weak to deal with his own ministers” following scrutiny over Nadhim Zahawi’s tax dispute during PMQs.
She claimed Rishi Sunak was “unable to govern”.
PM’s response to missing children ‘shameful'
13:17 , Miriam Burrell
The Prime Minister’s response to reportedly 200 unaccompanied children that have gone missing from Home Office hotels is “simply shameful”, Labour MP Tulip Siddiq said.
She said his response was “hollow”, adding that “we need action now”.
PM says report on missing children from Home Office hotels ‘concerning'
13:12 , Miriam Burrell
Prime Minister Rishi Sunak said reports of 200 unaccompanied children going missing from Home Office hotels are “concerning”.
Labour MP Tulip Siddiq said: “Ministers have admitted that they have no idea about the whereabouts of these children. So could I ask the Prime Minister: does he still think that the UK is a safe heaven for vulnerable children?”
Mr Sunak said the Government is trying to end the use of hotels, and said: “The United Kingdom has opened up its heart and homes to hundreds of thousands of people over the last few years... provided refuge and sanctuary to many children in that process.
“But the reports that we have read about are concerning, local authorities have a statutory duty to protect all children regardless of where they go mossing from, and in that situation they work closely with the local agencies including the police to establish their whereabouts.”
Zara Aleena: PM says tough sentencing will keep women safe
13:09 , Miriam Burrell
Sir Keir Starmer told the Commons he spoke to the family of Zara Aleena, murdered by Jordan McSweeney in June 2022, and said they have been through agony.
“He’s accepted the findings of the report, does he also accept what Zara’s family say?” he asked the prime minister.
Rishi Sunak said his “heart of course goes out to Zara’s family”, adding that the Government had made moves to address staff shortages and other issues in the probation service.
The Prime Minister added: “If we do want to increase the safety of women and girls out on our streets then we need tough sentencing, and that is why this Government passed the Police, Crime, Sentencing and Courts Act, which he opposite and his party opposed.”
Heavier sanctions on Iran urged after execution of British national
12:49 , Josh Salisbury
Hammersmith MP Andy Slaughter raises the case of Alireza Akbari, a British-Iranian who was last week executed in Iran.
The ex-deputy Iranian defence minister was arrested in 2019 and convicted of spying for the UK, which he denied.
Mr Slaughter accused the Government of making “little effort” to protect him in the years before his execution.
“In the years preceding and days following his murder, the UK government made little effort to protect the life or protect the death of a national,” he said.
He said the family wanted to hear from the Government what sanctions they will impose on Iran “beyond the trifling steps taken so far” in the wake of the case.
Mr Sunak replied: “The regime is prolonging of the suffering of the family and it is sadly typical of the disregard for basic human dignity. Iran must now provide about the circumstances of his death and burial.”
He says the UK government will continue to pressure the regime until the family gets answers.
SNP: Zahawi tax affair ‘matter of PM’s integrity and accountability'
12:31 , Josh Salisbury
SNP Westminster leader Stephen Flynn said the issue of Nadhim Zahawi's tax affairs "is now a matter of the Prime Minister's own integrity and accountability".
He said: "May I ask the Prime Minister what advice would he have for individuals seeking to protect their personal finances? Should they seek out a future chair of the BBC to help secure an £800,000 loan?
"Should they set up a trust in Gibraltar and hope that HMRC simply don't notice? Or should they do as others have done and simply apply for non-dom status?"
Rishi Sunak replied: "I'm proud of the record of this Government in supporting the most vulnerable in our society. Just this winter helping all families: £900 with their energy bills, raising the National Living Wage to record levels and ensuring that our pensioners get the support they need. That's what this Government is doing to ensure financial security in this country."
Starmer: Sunak ‘hopelessly weak’ in not sacking Zahawi
12:27 , Josh Salisbury
Sir Keir accuses Rishi Sunak of being too weak to sack Nadhim Zahawi.
Sir Keir says: “His failure to sack him when the whole country can see what’s going on shows how hopelessly weak he is. A prime minister overseeing chaos, overwhelmed at every turn.
“He can’t say when ambulances will get to heart attack victims again. He can’t say when the prison system will keep streets safe again. He can’t even deal with tax avoiders in his own Cabinet. Is he starting to wonder if this job is just too big for him?”
Sunak responds: “The difference between him and me is that I stand by my values and principles even when it is difficult.
“When I disagreed fundamentally with the previous prime minister I resigned from the government.
“But for four long years he sat next to the member for Islington North (Jeremy Corbyn) - when antisemitism ran rife, when his predecessor sided with our opponents.
“That’s what’s weak, Mr Speaker. He has no principles and just petty politics.”
Sunak: Labour playing ‘political opportunism’ with Zahawi tax investigation
12:23 , Josh Salisbury
Sir Keir accuses the PM of dodging the question.
He says last week, the PM told MPs that Zahawi had addressed his tax affairs in full, but now says there are questions to be answered.
He asks: “What changed?”
Mr Sunak replies that more information had entered the public domain since last week, and that he believes in “proper due process”, which is why he appointed the ethics advisor to investigate.
He accuses the opposition of “simple political opportunism” and says: “Everyone can see through it”.
Sunak: I can’t ‘prejudge’ investigation into Zahawi controversy
12:19 , Josh Salisbury
In apparent reference to the Nadhim Zahawi row, Sir Keir asks Mr Sunak: “Does the prime minister agree that any politican who seeks to avoid the taxes they owe in this country is not fit to be in charge of taxpayer money?”
Mr Zahawi is notable absent from PMQs.
The Prime Minister replies: “The issues in question occured before I was prime minister. With regards to the appointment of [Zahawi], the usual appointments process was followed. No issues were raised with me when he was appointed to his current role.
“And since I commented on this matter last week, more information has come forward. And that’s why I have asked the independent advisor to look into the matter.
“I obviously can’t prejudge the outcome of that.”
Starmer asks if Government has blood on its hands over parole failings
12:14 , Josh Salisbury
Labour’s Sir Keir says there are “systemic issues” in parole services, which are a ministerial responsibility.
Mr Sunak replies that steps are being taken to implement new processes to recall offenders. He says this is already making a difference.
Sir Keir says across the country, parole services are failing. “It is yet another vital public service that is on its knees after thirteen years of a Tory government.”
He says he has spoken to Ms Aleenah’s family, who say the Government has “blood on their hands”.
Mr Sunak replies: “We do want to increase the safety of women and girls, we need tough sentencing. And that’s why this government passed the Police Crime and Sentencing Act which [Keir Starmer and Labour] opposed.”
Keir Starmer presses PM over Zara Aleena case
12:09 , Josh Salisbury
Labour’s first question concerns the case of Zara Aleena, who was savagely attacked and murdered in east London. Her killer was allowed to roam the streets after probation failings, a shocking report found.
He asks: “Does the prime minister accept those findings?”
Mr Sunak replies: “This is a truly terrible crime … the failings were serious and unacceptable.”
He says serious steps are being taken to address those concerns.
Pictured: Rishi Sunak leaves No10 for PMQs
11:40 , Josh Salisbury
Sunak welcomes Germany’s decision to send tanks to Ukraine
11:13 , Josh Salisbury
Away from domestic politics, Rishi Sunak has welcomed Germany’s decision to send its coveted Leopard-2 tanks to Ukraine.
German Chancellor Olaf Scholz has finally given the “green light” to supplying Ukraine with the tanks after weeks of hesitaion that saw growing impatience among the country’s allies.
Ukraine’s president, Volodymr Zelensky, had urged Germany to provide the tanks to unleash a “real punching fist of democracy” to force Russian troops out of Ukraine.
Mr Sunak said it was “the right decision by Nato Allies and friends to send main battle tanks to Ukraine. Alongside Challenger 2s, they will strengthen Ukraine’s defensive firepower.
“Together, we are accelerating our efforts to ensure Ukraine wins this war and secures a lasting peace.”
Lib Dems call on Zahawi to stand down
10:19 , Josh Salisbury
The Liberal Democrats have issued a call for Zahawi to be sacked or suspended while the investigation into his tax affairs is ongoing.
Lib Dem deputy leader Daisy Cooper said: “The Conservative party is stuck in an endless cycle of sleaze and chaos, while the country suffers from a cost of living and NHS crisis.
“What more will it take for Sunak to finally do the right thing and sack Zahawi, or at least suspend him for the duration of this investigation?”
Pictured: Nadhim Zahawi at Tory party HQ
09:48 , Josh Salisbury
Tory Party chairman Nadhim Zahawi has been pictured at the Conservative Party headquarters in Westminster.
Press have been gathered outside his house from dawn as he faces mounting calls to quit.
PMQs comes ahead of day of strikes on February 1
09:11 , Josh Salisbury
Rishi Sunak is also likely to face questions on what his Government is doing to avert strikes.
Next Wednesday, February 1 is set to be one of the biggest days of industrial action in recent years, with teachers, train drivers, civil servants and university lecturers staging walkouts.
The Trade Union Congress is also organising nationwide events on February 1 to protest against the Government’s controversial planned law on making unions agree to provide minimum levels of service during industrial action.
Unions believe the planned legislation would lead to workers being sacked even if they had lawfully voted to strike.
Industrial unrest has been growing for months across the country involving rail workers, nurses, other NHS staff, teachers, civil servants, council workers and others.
Sunak to face pressure over Zahawi tax controversy
08:24 , Josh Salisbury
Good morning and welcome to our live coverage of PMQs.
Rishi Sunak will likely face a grilling at noon from MPs about what he knew and when of Tory party chairman Nadhim Zahawi’s tax affairs.
Mr Zahawi had previously dismissed reports of a HMRC investigation into his taxes as “smears”.
But last week it was revealed that Mr Zahawi paid a penalty to HMRC over an estimated £5m tax dispute while chancellor.
Mr Zahawi is also facing criticism for alleged legal threats sent to those raising concerns about his tax affairs.
Lord Evans, Chairman of the Committee on Standards in Public Life, told BBC Radio 4’s PM programme on Tuesday: “Accountability, openness are things which the Government says that it wants to be characterising its own behaviour, so that I think speaks for itself.
"The sort of attempts, apparent legal attempts to suppress this story, I don’t think that does live up to the sort of standards that the public would rightly expect.”