Sunak takes the axe to Zahawi – is he finally getting tough?

The hard truth about Nadhim Zahawi is that he should have gone last summer. It was perfectly apparent that he had serious questions to answer in July last year, when The Independent broke the story that the then chancellor of the Exchequer was being investigated for his tax affairs. It is not something that has sprung into the open in the last few days or weeks, as the prime minister seems to suggest.

Something like the apparently expedited inquiry by the independent adviser on ministerial standards, Sir Laurie Magnus, could have been commissioned and reported last summer (allowing for the fact that neither Boris Johnson nor Liz Truss had an independent adviser at the time). That losing yet another chancellor would have been extremely embarrassing during the chaotic dying days of Johnson’s administration is obvious, but Zahawi was as unfit for office then as he is now.

How obvious was it that Zahawi was unsuitable to be a cabinet minister, let alone chancellor and thus in charge of HMRC? It was all too apparent from the Independent story, quoted here at appropriate length:

“Inland Revenue experts are investigating the tax affairs of new chancellor and Tory leadership hopeful Nadhim Zahawi, The Independent can reveal.

HMRC became involved after a secret inquiry was initially launched into Mr Zahawi’s finances by the National Crime Agency (NCA) in 2020. The Independent has also established that officers from the Serious Fraud Office (SFO) investigated the chancellor’s financial affairs.

The probe was then passed to HMRC, which falls under the control of the Treasury – the department that Mr Zahawi now runs. A senior Whitehall source confirmed that the tax investigation is currently “unresolved”. It can also be revealed that Boris Johnson, home secretary Priti Patel and the Cabinet Office were all informed of the investigations.”

It seems nothing came of the NCA investigation, but quite a lot came of the HMRC one, as has been grudgingly admitted by Zahawi. The allegations were in any case extremely serious. Did no one at the top of government at the time, or subsequently, raise these issues and ask that they be looked into?

It seems our last three prime ministers were curiously incurious about their senior colleague. Sure, Zahawi might have protested his innocence, and called the stories “smears”, as he did publicly. But No 10, unlike newspapers, has the authority to find out swiftly what is going on.

The question, now that Zahawi has exited, is why Johnson, Truss and Sunak saw fit to appoint him to their governments. Did they know about the investigations? What did they know? At what stage, if at all, were they respectively made aware of these irregularities? What did the cabinet secretary Simon Case, or other officials, tell them, formally or informally?

The Zahawi tax scandal, therefore, will linger on until these questions are answered. Even if Zahawi leaves the Commons, the public have a right to know about a matter that casts doubt on the judgement of Johnson, Truss and Sunak in relation to cabinet appointments. Perhaps the Magnus report sheds light on this – if so, the evidence should be published.

Sunak does at least deserve some modicum of credit for acting now – better late than never. Zahawi was a problem he inherited, and his two immediate predecessors should have taken appropriate action, as should he. He dithered for far too long. Perhaps Sunak is too fair-minded, putting a generous interpretation on things. Perhaps he believed that the principle of “innocent until proven guilty” applies in politics as well as the courtroom. Process matters, they say.

Even so, Zahawi should have stood aside from his roles until the independent adviser had completed his quasi-judicial probe. But politics is a rough old game, and those who play it should be well aware of the untidy rules by which it is played. The contrast is with the way in which, say, Tony Blair and Alastair Campbell dealt with cabinet ministers who got into trouble – swift, rough justice, ruthlessly applied.

Now that Sunak has rid himself of this troublesome minister, he should learn the lesson that his party, along with the country, looks to him for clear, decisive leadership. He seems to have truncated the usual bureaucratic processes and shown that he isn’t just some technocratic managerialist bogged down in procedure.

He’s done the right thing and learned lessons about leadership and political perceptions. He looks a little less nice, but also a little less weak without Zahawi kicking around the place.