What is it with Chancellors (and former Chancellors) and scandals over their taxes?
Perhaps we should ask Nadhim Zahawi. Yesterday, minutes after a damning report confirmed he had breached the ministerial code seven times, Zahawi was promptly sacked from his position as Conservative party chairman by prime minister Rishi Sunak. According to the briefing by Sunak’s ethics adviser Sir Laurie Magnus, the Stratford-upon-Avon MP repeatedly failed to act with openness and honesty, including making a public statement which was inaccurate.
“I consider that an individual subject to the HMRC process faced by Mr Zahawi should have understood at the outset that they were under investigation by HMRC and that this was a serious matter,” Magnus said in his briefing into Zahawi’s finances after he is alleged to have breached the ministerial code by making an HMRC settlement when he was briefly Chancellor last summer.
Zahawi, 55, was catapulted into the role of finance minister for a two-month period in July and is believed to have paid a penalty to the tax collector as part of the settlement he made during that time.
Since then, ministers — including those in his own party — had been asking why there are still so many “unanswered questions” over Zahawi’s so-called multi-million pound tax “error” — the latest in a series of questions concerning his tax affairs since he ran to be party leader last summer. As an experienced businessman and the man in charge of the country’s tax affairs at the time, many argued Zahawi should have known better.
Not only that, but his predecessor Rishi Sunak — now PM and the very man tasked with sealing his fate — experienced similar criticism surrounding a scandal over his wife’s taxes. Should that not have made him extra careful?
So what else do we know about Zahawi, what will he do now — and will this week’s firing dash his chances of becoming what many had tipped as a future PM? From his upbringing in Iraq and self-starter reputation to his (surprising) hobbies outside Parliament, here’s everything you need to know about the man at the centre of this week’s sleaze scandal.
The cabinet minister who fled Saddam Hussein
Unlike his Chancellor predecessor Sunak, Zahawi wasn’t raised in Britain. He was born in the Iraqi capital of Baghdad to well-connected Iraqi-Kurd parents and grandparents — his grandfather was the governor of the Central Bank of Iraq.
The family moved to the UK when Zahawi was 11, after fleeing the regime of late dictator Saddam Hussein, with whom Zahawi’s businessman father reportedly had a small feud. “I would have been drafted into the Iraqi army, had to go to the front line, and probably die,” the father-of-three once said of how different his life could have been.
Zahawi didn’t speak a word of English when he arrived and was bullied when he first started school in Sussex. His teachers reportedly warned his parents that he might suffer learning difficulties and he recently spoke of the debt he owed poet Philip Larkin as he improved his English as a teenager.
“Some of my first school experiences involved being called a ‘p*ki’ and even having my head dunked in a pond by bigger kids as entertainment,” he told his Twitter followers last month in a thread about the prejudice he faced arriving in the UK, and how that’s shaped the leader he is today. “It’s time to talk about bullying. Coming to this country was hard, and yes, some kids could be cruel. Being a child from Iraq, I was seen as ‘different’. It’s hard to describe how I felt - anger, confusion, unfairness. Looking back, I didn’t know how to handle these feelings and emotions.”
But he said sharing the problem made his life easier and urged other people to speak out against bullying in order to make a change. “One of the greatest things about our country is the people!” he continued. “I often say to others, if you share your problem, regardless of what it is, people are always there to help. And this applies to bullying too. In fact, it’s by sharing problems that I managed to move forward and settle. I’m here to tell you that it does get better. I have to pinch myself each morning when I look at what this country has given me.
“It’s never easy to open up about these experiences, and it still isn’t. But as Secretary of State for Education, it’s something I hope to raise awareness about and make a change.”
In 2021 he said the government has provided more than £2million to anti-bullying organisations, including the Diana Award. He is also a “strong supporter” of respect being taught in Relationship, Sex and Health Education classes.
From YouGov to the vaccine roll-out
Something Zahawi did share with his Chancellor predecessor Sunak is a background in business. He is believed to be one of the UK’s richest MPs after making considerable sums of money in the oil industry, having studied chemical engineering at University College London.
His business career also involved stints distributing t-shirts and Teletubbies merchandise to retailers including Marks and Spencer, and founding the polling company YouGov with fellow Conservative Stephan Shakespeare in 2000. It was floated on the stock market five years later.
By this point he already had the beginnings of a promising career in politics. In 1991 he became an adviser to novelist and former Tory MP Jeffrey Archer, and in 1994 Archer helped to campaign for Zahawi for a seat on Wandsworth council. In return, Zahawi ran Archer’s (unsuccessful) campaign for Mayor of London in 1998.
He became a Conservative councillor in Putney in 1994, serving three terms until 2006, and was selected as Conservative MP for Stratford-upon-Avon in 2010, being re-elected in 2015, 2017 and 2019. Since then the keen Brexit-backer has become a member of the Number 10 Policy Unit under David Cameron, served as vice-chair of the All Party Parliamentary Group (APPG) on Kurdistan Region in Iraq, and served as junior minister in the Department for Education under Theresa May.
But it was his stint from 2020 to 2021 as undersecretary of state in the health department – or “minister for vaccines” - that really cemented his name in Parliament, as he helped to lead the Government’s successful vaccine rollout.
Since then he’s widely been considered a self-made leader and a “safe pair of hands” - which is perhaps what got him his next gig as education secretary, replacing Gavin Williamson in September 2021 in a cabinet reshuffle.
His time in the role wasn’t without its challenges. Early months involved cleaning up the “mess” left by Williamson over the exams fiasco and his final weeks weeks have seen him attempting to close down potential strike action by teachers, which he called “unforgivable” just months after two years of Covid disruption. Just before becoming Chancellor he wrote to his predecessor Sunak asking for a nine per cent pay rise for teachers.
A property power couple with shared equine passion
Zahawi is reportedly a keen horserider and showjumper, as is his wife Lana Saib — now Lana Zahawi — who he married in 2004 and regularly appears alongside him in Instagram photos.
The couple have three children — two sons and a daughter — and reportedly own a riding school together, but it’s their property empire, Zahawi Warren Limited, that’s made them the majority of their wealth.
The portfolio is reportedly controlled by Lana and is worth more than £100 million, including a £6.3 million plot featuring a giant Co-op and car park in St Neot’s, Cambridgeshire, which she bought in September 2021.
Another company looked after by Lana reportedly owns land in the West Midlands worth £18 million, featuring an Asda megastore, and last year it emerged that one of her firms bought a £3.5 million industrial estate near to the Eurotunnel station in Ashford, Kent - mortgage-free and just days ahead of the Government’s EU trade deal in December 2020.
The property power couple are also understood to own five residences worth £17 million: three in London, one in Warwickshire and one in Dubai, “so just like Rishi Sunak, we again have a super-rich Chancellor who will be on the side of the super-rich,” Labour MP Zarah Sultana complained when he got the job after a series of bombshell resignations saw Rishi Sunak and Sajid Javid both walk out in a protest against then-PM Boris Johnson.
The two-month Chancellor
Presumably happily for Sultana, Zahawi didn’t last long in number 11. It all seemed promising, when he was elected on July 5. “I pinch myself every morning when I think about the opportunity this country delivers for an immigrant boy born in Bagdad,” he said on being appointed. “To think the 11-year-old who arrived on these shores who couldn’t speak a word of English is now the Chancellor of the Exchequer in Her Majesty’s Government. This is the greatest country on earth.”
Just 24 hours into the job, the former oil exec plunged the knife in and urged then-PM and his longstanding friend Boris Johnson to resign, with commentators suggesting Johnson had hired his own executioner, and that Zahawi was in “pole position” to become PM himself.
But Zahawi’s glory days as Government’s number two were short lived, as Sultana had predicted. He clocked up just two months in the hot-seat, launching his own (failed) prime ministerial leadership bid and tackling the worst cost-of-living crisis in a generation during that time. Just two months later, on September 6, new PM Liz Truss replaced him with Kwasi Kwarteng, instead appointing Zahawi as Chancellor of the Duchy of Lancaster, minister for Equalities and Minister for Intergovernmental Relations.
He originally backed Boris to replace Truss when she stepped down as PM, but swiftly switched his allegiance to Sunak when Boris announced he would not be running.
The three-month chairman — and future PM?
Zahawi’s personal finances have made headlines before and insiders quickly began suggesting they could be his “Achilles heel” when he started as Chancellor. In 2013 it was revealed he’d used a company in an offshore tax haven to buy his Warwickshire home (an estate and riding stables worth £1 million at the time) and in 2021 reports showed that his family investment firm had ordered court action against small business owners for unpaid rent, despite the Tories saying they should be given time to pay.
Criticisms have also been made over the fact that he once claimed £5,800 in MP expenses to heat his horse stables, and has recieved more than £1 million in wages, investments and donations from fossil fuel companies since becoming an MP.
But it was this latest finance scandal since being chairman that many had long suggested could he Zahawi’s final downfall. “He’s toast,” a former Tory minister said privately last week as it was announced that Sunak would not be sacking Zahawi, but would be ordering a now-damning inquiry into his tax affairs.
The investigation was led by new ethics adviser Sir Laurie Magnus — commentators have called him the new Sue Gray — and despite Zahawi calling his tax situation a “careless, not deliberate” error, Magnus’ four-page report found that he had shown “insufficient regard for the general principles of the ministerial code and the requirements in particular, under the seven Principles of Public Life, to be honest, open and an exemplary leader through his own behaviour”. He also said an individual subject to the HMRC process faced by Zahawi should have understood at the outset that they were under investigation.
Even since being sacked, Zahawi’s allies say he still believes he’s done nothing wrong, simply saying in a statement that he is “sorry to [his] family for the toll this has taken on them”. Critics are currently calling on himto resign from his position as an MP, but others believe it won’t be long before it makes a comeback attempt.
If his fellow Tory ministers are anything to go by, the question isn’t whether he will, but how soon. And more concerningly, will he be able to last longer than three months?