Why Rishi Sunak must sack Nadhim Zahawi

Rishi Sunak will have to sack Nadhim Zahawi, the Conservative Party chair. The only route to Sunak being a successful prime minister is for him to be “not Boris Johnson”, and lift the shadow still being cast over the government by Johnson – who, after leaving office, has clearly not lost his love of being the centre of attention.

Johnson tried to bend the rules to protect friends such as Priti Patel, Owen Paterson, and Chris Pincher when they ran into trouble of their own making. It usually ended in tears, and certainly did when Johnson’s inaction over Pincher – the former deputy chief whip who resigned after groping allegations – hastened his own downfall.

Sunak has drawn level in the opinion polls on the economy and in his head-to-head with Keir Starmer on who is seen as “best prime minister”. But the damage to the Tory brand inflicted by Johnson and Liz Truss leaves the party 20 points behind Labour. To have a chance at the next general election, Sunak will to level up his party’s ratings to match that of his own. However, if he is tarnished by the controversy over Zahawi’s tax payments, both man and party will be dragged downwards.

The inquiry into Zahawi’s actions by Laurie Magnus, the adviser on ministerial interests, is an old trick often used by prime ministers to buy time. But on this occasion, it has not put a lid on the affair as Sunak would have hoped; the questions for Zahawi – and what the PM knew when he appointed him Tory chair – keep on coming.

There’s a lesson in this saga for all politicians: Zahawi should have come clean much earlier – starting when The Independent revealed he was the subject of an HMRC investigation last summer.

Instead, he seems to have reached for the Johnson playbook – rule one: try to get away with it. Threatening The Independent and the tax expert Dan Neidle with libel actions hardly seems compatible with the ministerial code, which says ministers should stick to the seven principles of public life – “selflessness, integrity, objectivity, accountability, openness, honesty and leadership”. They should withhold information from the public and parliament “only when disclosure would not be in the public interest”.

The code also says: “Ministers must scrupulously avoid any danger of an actual or perceived conflict of interest between their ministerial position and their private financial interests.” Zahawi was chancellor when he agreed to pay almost £5m – including a penalty – in a settlement with HMRC (a department which is under the Treasury’s umbrella).

Zahawi insists he is confident he acted properly throughout. But Jonathan Evans, who chairs the committee on standards in public life, told the BBC that “trying to close down a legitimate public debate” would not live up to the seven principles. He added that “apparent legal attempts to suppress this story, I don’t think that does live up to the sort of standards that the public would rightly expect”.

So there will be plenty of sections of the ministerial code for Magnus to consider, and his inquiry will likely give Sunak enough evidence to justify Zahawi’s departure. The PM will be mindful that Zahawi is popular among Tory backbenchers, though an increasing number now accept he cannot remain in his current job, which includes batting on sticky media wickets and attacking Labour (including its tax plans).

Zahawi is a member of Johnson’s fan club, but sooner or later Sunak will have to upset some of the Tory factions whose interests he tries to juggle every day. Sunak doesn’t owe Zahawi anything: he is less close to him than to Dominic Raab, the deputy prime minister (who is still under investigation for alleged bullying).

Zahawi backed Truss for the leadership – and a Johnson comeback when she fell – before switching to Sunak only when it became clear he would become PM. In contrast, Raab worked his socks off during Sunak’s summer contest against Truss even when others gave up the fight and went off on holiday.

But Sunak will also need to distance himself from Johnson by diluting the controversial resignation honours list with about 100 names he has proposed, reportedly with peerages for four MPs delayed until after the next election.

Memo to the PM: being “not Corbyn” has got Starmer a long way. When Sunak promised “integrity, professionalism and accountability at every level”, it was code for being “not Boris”. Now is the moment to live up to it. He must tackle the dangerous perception the government still follows Johnson’s “one rule for us, another for everyone else” mantra.

Sunak must enforce the rules for ministers rigorously. If he doesn’t, his administration will look increasingly like John Major’s in the mid-1990s. After a financial market meltdown, a weak leader is rudderless as his government sinks in a sea of sleaze allegations; looking out of touch, out of ideas and out of time as it heads for a crushing election defeat.