Standard Digital Edition

Tax boss: Zahawi wouldn’t have been fined for ‘innocent’ mistake

David Bond, Nicholas Cecil and Rachael Burford

NADHIM ZAHAWI’S future as Tory party chairman looked in increasing jeopardy today as Britain’s tax chief suggested the former chancellor would not have been given a penalty for making an “innocent” mistake in his declarations. Cabinet minister Mr Zahawi is insisting he has not done anything wrong, saying he made a “careless” not a “deliberate” mistake in his tax affairs.

The affair is now being investigated by Prime Minister Rishi Sunak’s ethics adviser Sir Laurie Magnus who is looking at whether the party chairman may have breached the ministerial code. The storm was threatening to overshadow Mr Sunak as he was holding his Cabinet at Chequers today in a bid to reboot his Government ahead of an expected general election next year.

Mr Zahawi has admitted he settled a dispute which is reported to have included a penalty payment of about £1 million. Mr Zahawi says he has acted properly throughout. Asked about the meaning of “carelessness” in tax terms when he appeared before the public accounts committee, Jim Harra, chief executive and First Permanent Secretary at HM Revenue and Customs, told MPs: “I’m not

commenting on anyone in particular’s personal affairs. But carelessness is a concept in tax law. It can be relevant to whether people are liable to a penalty and if so what penalty they would be liable for an error in their tax affairs.

“So if you take reasonable care but nevertheless make a mistake, whilst you will be liable for the tax and for interest if it’s paid on it, you would not be liable for a penalty. There are no penalties for innocent errors in your tax affairs.”

Deputy Prime Minister Dominic Raab is also facing a probe into eight formal complaints of alleged bullying at three departments where he was in charge.

With Mr Sunak under siege over the “sleaze” allegations, he yesterday rejected demands from Labour to sack Mr Zahawi now, insisting it was right that Sir Laurie should be allowed to complete his investigation.

Speaking on LBC this morning, Lord O’Donnell, former cabinet secretary to Tony Blair, Gordon Brown and David Cameron, backed Mr Sunak’s pledge to put integrity and accountability at the heart of his premiership.

But he added: “There are serious questions out there about the behaviour of ministers, and they need to be answered. And the public needs to see that action is taken.” Sir Laurie is investigating whether Mr Zahawi may have breached the ministerial code by failing to declare his tax dispute with HMRC when he was appointed to Mr Sunak’s Cabinet.

Mr Sunak had defended the former chancellor, insisting at PMQ’s last week that the matter had been dealt with in full. But the Prime Minister is now facing uncomfortable questions over what he knew at the time of his decision to appoint Mr Zahawi to his Cabinet and whether civil servants failed to brief him on the dispute with HMRC.

Last night, Work and Pensions Secretary Mel Stride suggested the investigation by Sir Laurie into Mr Zahawi could be wrapped up in 10 days.

He told ITV’s Peston programme: “We will in around, it sounds like 10 days’ time or thereabouts, hear from the ethics adviser, who will report to the Prime Minister, the Prime Minister will then have the facts and be able to make exactly those judgements.”

Mr Zahawi was set to attend the Cabinet meeting at Chequers today, during which Tory elections strategist Isaac Levido was expected to deliver a presentation on the Conservatives’ election chances. With Labour enjoying a 22-point lead in recent polls, Mr Levido is reported to believe there is a narrow path to victory but only if the Tory party can end its infighting and focus on voters’ needs. However, the probes into Mr Zahawi and Mr Raab could hang over the Prime Minister for weeks.

ARE you bored of Tory sleaze stories? Most Conservative MPs are. They’re fed up with the way their party keeps tripping over its own shoelaces, wearied of new revelations about senior figures and sums of money their constituents can’t even imagine.

But they also hope their voters are bored. “We aren’t being shouted at on the doorstep by our own supporters, like we were in the worst days of Boris,” says one MP, wanly. “I’m not sure many of them are paying attention or care about these latest rows,” says a senior backbencher, rather hopefully.

He has a point: the reason Partygate was so damaging to Boris Johnson was that it was directly comparable to the lockdown misery that millions were experiencing while Downing Street boozed. Tax arrangements and enormous loans are less tangible, more the sort of thing voters expect politicians to be messing about with anyway.

Johnson — caught up yet again in a row about his finances and jobs for cronies — has also left Westminster and the wider electorate a little less shocked by scandals. There have just been so many, and on such a regular basis. Often incredible stories of appalling behaviour don’t get the coverage or attention they merit purely because they’ve become a commonplace, part of the political fabric.

This is a pretty dismal situation for Conservatives to be in: hoping their voters are bored of their dysfunction or at least numbed to it. And it doesn’t mean Nadhim Zahawi, currently under investigation by the Prime Minister’s ethics adviser over his ‘careless’ tax arrangements, is safe in his job. The Tory party chairman would normally be leading the attack against Labour and taking all the awkward broadcast slots to defend difficult government policies. Instead, he is taking up questions in the Commons.

Zahawi is very popular with most Tory MPs, not least because he was the vaccines minister, and that’s one success they still like to hold up. He has also done a lot of good in Conservative campaign HQ, which is in a real state at present. The party machine lost a lot of staff when Johnson left government and the campaign apparatus is nowhere near ready for an election. Zahawi has been turning that around.

And yet there is now an awkwardness from many MPs towards him. “People aren’t meeting his eye in the voting lobbies, which is actually worse than anything I saw with Boris,” says one Tory. Generally the people defending the party chair are ministers forced to do broadcast rounds rather than a large phalanx of supporters.

MPs have been saying privately that they think Zahawi is doomed and they don’t want to be seen to be backing a ‘dead man walking’. They’ve grown bored over the past year of defending dud policies and people in their party, only for a screeching handbrake turn a day or so later. One MP defending a particularly egregious policy on the radio discovered the inevitable U-turn had taken place while he was in the studio, and vowed never to bother being loyal again.

Support for Zahawi is stronger among the more experienced MPs. He didn’t get to know the most recent intake of members very well: the 2019 bunch had a difficult social landing because lockdown came so soon after their election.

The problem for all intakes of MPs, though, is that voter boredom might not be because people don’t want politics in their lives to the extent it has been forced on them recently. It may instead be because they don’t want the Conservatives in their lives any more.

Labour’s lead in the polls is growing like the beanstalk, and that seems to be more a function of voters being fed up with the Tories than it is a particularly excited groundswell around Sir Keir Starmer.

Labourites know that lead is soft, and their leader likes to warn against complacency on an almost daily basis.

One name missing from this column is that of the Prime Minister. Rishi Sunak has appeared to be a commentator rather than a leader recently, discovering new developments in Tory rows from the papers like the rest of us. He and his top team aspired to bore the socks off everyone when they took over.

The psychodrama of the previous year made boring necessary. But Sunak needs to give his MPs a sense that they’re fighting for the right cause and that he’s got fire in his belly too.

Bored voters are one thing, but a party that’s bored of governing is quite another.

Conservative MPs have grown bored of defending dud policies and people in their party, only for a u-turn

Front Page

en-gb

2023-01-26T08:00:00.0000000Z

2023-01-26T08:00:00.0000000Z

https://eveningstandard.pressreader.com/article/281509345318082

Evening Standard Limited