Nadhim Zahawi: Child refugee who built business fortune before political career

Nadhim Zahawi: Child refugee who built business fortune before political career

Nadhim Zahawi had been charged with preparing the Tories for the next general election, but his sacking as party chairman will only prompt further questions about the Conservatives’ electoral fortunes.

Prime Minister Rishi Sunak took on the top job pledging “integrity, professionalism and accountability at every level”, and with the Tories struggling in the polls, he appointed Mr Zahawi to the role of party chairman.

Mr Sunak was no doubt relying on Mr Zahawi’s reputation as a clear and effective communicator – he also had a compelling story, having become a multi-millionaire businessman after moving to the UK as a child refugee who could not speak English.

Mr Zahawi had been praised for helping to roll out the coronavirus vaccine programme which ended punishing lockdown restrictions and his political stock was rising fast.

It was for these qualities – and a touch of desperation on scandal-plagued Boris Johnson’s part – that he was appointed chancellor in the dying days of that administration.

But it was while serving in the Treasury that he cut a multimillion-pound deal to settle a tax dispute with HMRC.

The estimated £4.8 million bill included a penalty when he was ultimately the minister in charge of the tax office.

Soon after becoming the Conservative Party chairman, Mr Zahawi’s tax affairs were dragged into the limelight, with the 55-year-old, who was also in Cabinet as minister without portfolio, beginning a battle to save his political career.

Nadhim Zahawi
Nadhim Zahawi was causing Rishi Sunak a political headache (House of Commons/PA)

Mr Sunak appointed his ethics advisory, Sir Laurie Magnus, to look into the matter but that did not stop the pressure building, with some Tory MPs calling for Mr Zahawi to stand aside from Cabinet while the investigation took place.

The result arrived swiftly, with the ethics inquiry into the handling of his tax affairs finding a “serious breach” of the ministerial code on Sunday morning.

The pace at which Mr Zahawi’s fortunes changed will have come as a surprise to many, not least his publisher, with his memoirs A Boy From Baghdad: My Journey From Waziriyah To Westminster due to be released in September.

Mr Zahawi’s rise did not follow the usual trajectory. Born in 1967 in Baghdad to an influential Kurdish family, his family fled Iraq having fallen foul of Saddam Hussein’s regime.

He grew up in Sussex and went on to study chemical engineering at University College London, before following in his father’s footsteps as an entrepreneur.

Lord Jeffrey Archer
Mr Zahawi worked with Lord Jeffrey Archer (PA)

Mr Zahawi meet the then-prominent and later disgraced Tory politician Jeffrey Archer while campaigning for Iraqi exiles who wanted the overthrow of Hussain.

Lord Archer hailed the young man as a “born organiser”, once telling the BBC: “If you said ‘I need six taxis, three aeroplanes and a double-decker bus, all in 30 minutes, he went and did it.”

He put Mr Zahawi’s talents to use during his bid to become London mayor in 1999. Lord Archer, however, was forced to abort that campaign in scandal.

Two years later, Lord Archer was jailed for four years having been convicted of perjury and perverting the course of justice.

In 2000, Mr Zahawi founded YouGov with another alumni of the Archer campaign, Stephan Shakespeare.

They would grow the polling company into a hugely successful one, and would float it on the stock exchange after five years.

Shares held by Balshore, the Gibraltar-registered Zahawi family trust, were sold off for an estimated £27 million. The mixing of family and business led to the HMRC dispute.

He is linked to a property empire valued at more than £58 million, according to records at Companies House, including a townhouse in London’s lavish Belgravia.

Following on from his successful time in business, Mr Zahawi stood down from YouGov to run for Parliament, winning the safe Conservative seat of Stratford-on-Avon.

Mr Zahawi is known as being one of the richest MPs but he was forced to apologise in 2013 for claiming parliamentary expenses for electricity for his stables and a mobile home.

He said he had “made a mistake” which he was “mortified” about, and he pledged to pay back any money that was wrongly claimed.

Then, as children and families minister in 2018, it emerged he attended a men-only Presidents Club charity dinner that went on to be at the centre of allegations of sexual harassment.

He was reprimanded by No 10 but said he left early and “did not see any of the horrific events”, which he said he was “shocked” by.

The following year he was a junior minister at the business department, which is where he was when the coronavirus pandemic began in late 2019.

It is another period that is under scrutiny. David Cameron contacted him as he was seeking Government loans for the since-collapsed Greensill Capital.

Then-prime minister David Cameron at a Conservative Party annual conference with Mr Zahawi
Then-prime minister David Cameron at a Conservative Party annual conference with Mr Zahawi (PA)

Mr Zahawi told officials, according to the Times, that he had not exchanged WhatsApps with the Conservative former prime minister. It later emerged messages had been deleted from Mr Zahawi’s phone.

Covid-19 was straining the nation and Mr Johnson looked to his old ally to roll out the vaccine programme in 2020.

Mr Zahawi described the role of vaccines minister as “the most important job I’ll ever do”, and his handling was widely seen as a massive success.

Mr Johnson also looked to him to replace Sir Gavin Williamson, who was this time sacked as education secretary over the exams fiasco.

In need of a chancellor after Mr Sunak’s resignation helped trigger Mr Johnson’s own downfall, he appointed Mr Zahawi to lead the Treasury.

Mr Zahawi made a failed attempt to win the party leadership during his two months as chancellor – a period in which he settled his tax dispute with HMRC.

Mr Zahawi sits next to Boris Johnson during a Cabinet meeting while he was chancellor (PA)
Mr Zahawi sits next to Boris Johnson during a Cabinet meeting while he was chancellor (PA)

Under scrutiny while trying to succeed Mr Johnson in No 10 in July last year, Mr Zahawi told Sky News he was “clearly being smeared” about his tax and insisted: “I’ve always declared my taxes, I’ve paid my taxes in the UK.”

A political survivor, he became chancellor of the Duchy of Lancaster during Liz Truss’s fleeting leadership, playing a key role in the preparations for the Queen’s funeral in September, before Mr Sunak made him party chairman in his new administration.

The trickle of stories about Mr Zahawi’s tax affairs became a torrent when The Sun On Sunday revealed he paid a seven-figure sum to HMRC.

Mr Sunak first defended his minister, saying he had given a “full” account. But then the Guardian revealed his settlement included a 30% penalty, taking the estimated total close to £5 million.

Under intense pressure, Mr Zahawi said it was a “careless and not deliberate” error linked to YouGov founder shares given to his father.

This changed the Prime Minister’s mind. Saying that he believes there were then “questions that need answering”, Mr Sunak ordered his ministerial standards adviser Sir Laurie Magnus to investigate.

Mr Zahawi said he welcomed a chance to give his account to Sir Laurie, insisting he was “confident” and had “acted properly throughout”.

The news came on Sunday morning, with Levelling Up Secretary Michael Gove having just completed one television interview explaining that he did not know when the investigation’s findings would come and about to face another, when Mr Sunak made public his decision to sack Mr Zahawi.

Sir Laurie’s four-page report, dated January 29 and setting out in detail the circumstances of Mr Zahawi’s tax affairs and communications with HMRC and the Prime Minister, found that the Tory chairman 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”.

In a letter to Mr Zahawi, the Prime Minister said that, following the investigation “it is clear that there has been a serious breach of the ministerial code”.

But Mr Sunak also said Mr Zahawi “should be extremely proud” of his “wide-ranging achievements in Government over the last five years”.

In a letter to the Prime Minister following his sacking, Mr Zahawi did not explicitly mention the findings of the ethics inquiry into his tax affairs.

He said: “It has been, after being blessed with my loving family, the privilege of my life to serve in successive governments and make what I believe to have been a tangible difference to the country I love.”

In comments that appear to indicate that the former chancellor holds out little prospect of returning to office in the years to come, but that he also plans to remain as an MP.

He said: “You can be assured of my support from the backbenches in the coming years. Your five priorities are the right priorities, and I will do whatever I can to help you deliver them.”