OPINION - Zahawi’s job hangs by a thread as Sunak orders an inquiry

 (Ben Turner)
(Ben Turner)

There held at one time a truism in British politics, that scandals involving Labour MPs related to money while those linked to Conservatives were more often about sex. This weekend went some way to dispelling that belief.

The prime minister has ordered a probe into the tax affairs of Tory party chairman Nadhim Zahawi, stating that “clearly in this case there are questions that need answering”. For a fuller examination of the allegations against Zahawi, it’s worth reading the post by the lawyer Dan Neidle of Tax Policy Associates, who uncovered much of the detail on this story.

But in short, Zahawi has agreed a settlement with HM Revenue & Customs, reported to be an estimated £4.8m. Critically, this is believed to include a significant fine. In his statement, Zahawi points out that HMRC concluded his error was “careless” and not “deliberate”. However, a 30 per cent fine, in this case around £1m, is substantial. The HMRC compliance guidebook states that ‘careless’ means a “failure to take reasonable care in relation to your tax affairs” and that ‘carelessness’ can be “likened to the longstanding concept in general law of ‘negligence’”.

Strip it all back and what we know is that Zahawi did not pay tax that HMRC concluded was owed, sent threatening letters to dismiss suggestions he did so, and perhaps most extraordinarily of all, was chancellor at the time when he was attempting to settle his personal tax affairs.

And yet this was only one of the weekend’s sleaze stories. The process of hiring the BBC chairman is set to be reviewed by the Commissioner of Public Appointments, following claims that Richard Sharp helped to secure an £800,000 loan for Boris Johnson – weeks before the then-prime minister recommended him for the role.

Both stories would be a problem for Rishi Sunak even if he hadn’t stood outside Number 10 for the first time as prime minister and promised that his government would have “integrity, professionalism and accountability at every level.” It now means another week of discussing a story Labour is only too happy to keep in the headlines.

Meanwhile for Zahawi, it is unclear how he can easily continue in his role as top organiser, communicator and attack dog if the first question he will repeatedly be asked is ‘but what about your tax returns?’

And that’s the problem for the Tories as a whole. Last week, the BBC’s Ione Wells reported that Sunak’s chief of staff has told special advisors to produce at least one “attack” line per week on their Labour counterparts. Now, putting aside the fact this is a figure plucked from thin air to attack figures who, from the public’s perspective, have also been plucked from thin air. (Reminder: most normal people have not heard of a Labour frontbencher not called Starmer or Miliband.)

It is not one random story a week that wins elections, it is about locating your opponents‘ weak spot and relentlessly attacking it until they beg for mercy. The Zahawi and Johnson stories do exactly that, and Labour barely had to lift a finger.

The comparison with the Tory sleaze of the 1990s is tempting but it is not wholly analogous. First, and with apologies to Jonathan Aitken, these allegations are being made against senior cabinet ministers. Secondly, the economy was growing in the mid-1990s. People were getting wealthier. That is not the case this time around.

Keir Starmer’s message is growing sharper by the week: change without risk. What is Rishi Sunak’s?

In the comment pages, Rob Rinder calls the cachet of elite degrees absurd, because genius is found on every street. While Vicky Jessop has joined the ranks of the virtuous sober, but is learning how hard it is to socialise in London when you’re not drinking.

And finally, I saw ‘M3gan’ in the cinema at the weekend and thought it was beyond dreadful, but Charlotte O’Sullivan is actually paid for her considered thoughts on film and she enjoyed it. ‘Babylon’, on the other hand? Less so.

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