When it was reported last week that Nadhim Zahawi had settled a tax dispute with HMRC to the tune of £5 million, the political pressure over his future amped up significantly. Rumours surrounding the Conservative party chairman’s finances had been rumbling on in the background for some months, but they suddenly burst into centre stage. And the party chair is not the only former chancellor feeling the political consequences.
“Clearly there’s questions that need answering”, Rishi Sunak said on Monday as he pointed to a new investigation into Zahawi’s tax affairs. But this may be too little too late if Sunak wants to prevent Zahawi’s financial foibles implicating his own judgment. Where once the question was merely “can Zahawi survive?”, speculation has since become more ominous. “How much damage will this do to Sunak?”, Westminster now asks in chorus.
Of course, this isn’t the first time the prime minister’s judgement on ministerial appointments has been questioned. The early days of Sunak’s premiership were dominated by tensions over contentious cabinet appointments.
First, there was the decision to re-appoint Suella Braverman as home secretary, just six days after she was forced to resign by Liz Truss for breaking the ministerial code. Next there was “Williamsongate”, which saw former chief whip Gavin Williamson resign as a minister without portfolio just 19 days into the job following bullying allegations which he “strenuously” denied. Then it was Dominic Raab’s turn to face the firing line, again, over allegations of bullying which, again, were denied. As an investigation rumbles on in the background, Sunak continues to stick by his deputy prime minister.
After a brief sabbatical from scandals, Sunak is now facing his fourth “sack or back” decision — and it is as tough and politically delicate as any before it. So will Zahawi go the way of Williamson and be ushered to the exit door — or might the prime minister firm out the political firestorm and retain Zahawi’s services as in the cases of Braverman and Raab?
In November, Sunak’s decision to retain the services of Suella Braverman, amid a political row over standards, told us much about how the former chancellor would operate as prime minister. It was widely believed that Braverman’s reappointment as home secretary came as the result of a deal done during the second Conservative leadership contest of 2022; it saw the right-winger swing behind Sunak instead of Penny Mordaunt or Boris Johnson, both of whom would have been equally keen for her support. Naturally, the endorsement was significant. Braverman’s backing allowed Sunak to present as a “unity” candidate who could bring together all wings of the party.
The much-commented-upon “deal”, combined with Braverman’s ideological positioning, made any attempt to sack her politically problematic. Already a darling of the grassroots, were she to leave government again, Sunak risked creating a standard bearer for his party right and a personal conduit for backbench discontent. In the end, the prime minister was able to ride out the criticism, albeit with much political capital expended and — according to critics — his plan for “professional and accountable” government jettisoned.
Unlike Braverman, Zahawi is not associated with any ideological faction in the Conservative party — nor is there any speculation as to a “deal” surrounding his appointment. In fact, Sunak was Zahawi’s fourth choice for prime minister, whom he chanced upon after first exhausting the options of himself, Liz Truss and then “Boris Johnson 2.0”. Even in November 2022, the one-time education secretary could hardly be described “ready for Rishi”. This means that were Sunak to pull the trap door on the politically-damaged Zahawi, he would not be creating a martyr nor reneging on any post-Truss political pact.
This is not to say Zahawi’s departure would come without consequence. While Braverman’s political utility to Sunak is based on her ideological appeal in the party, Zahawi’s political strengths come from his reputation as a competent minister and strong communicator. Arguably, Zahawi is still on a victory lap from his time as vaccines minister through the Covid pandemic — a role from which he won both plaudits and a cabinet promotion under Johnson. Notably, this was the characterisation of Zahawi provided by foreign secretary James Cleverly on the Sunday morning media round. Cleverly, who otherwise struggled with questions over Zahawi’s tax affairs, told Sky News that Zahawi remains a “very effective” minister.
Ironically, it is Zahawi as party chair who should be doing the most difficult media rounds, touring the airwaves when no one else wants to. It is a role he has excelled in for consecutive PMs and it is this fact which landed him the role of party chair, a post usually apportioned to an unwavering loyalist (see Jake Berry and Liz Truss, for example). Before Sunak replaces Zahawi as party chair, he must first ask: is there anyone better in the Conservative party at batting away and dealing with media scrutiny than the role’s current occupant, even if subsequent rounds look set to be marred by questions on tax?
Along these lines, it is telling that Sunak initially tried to firm out the political storm surrounding Gavin Williamson. The prime minister instead deferred to “an independent complaint process” and welcomed Williamson’s stated “regret” over comments made to former chief whip Wendy Morton. Sunak’s instinct to defend Williamson would have been motivated, in part, because the former defence secretary was viewed as a political weapon and party “fixer”. In this sense, Zahawi and Williamson were two sides of the same coin. As party chair, Zahawi would be tasked with making the case for Sunak in public while Williamson dealt with private parliamentary issues behind the scenes. Given Sunak’s instinct was to hold on to Williamson when the bullying scandal first broke, are we seeing history repeated with Zahawi?
One factor which may prevent Zahawi from succumbing to the same fate as Williamson is that the party chair, unlike the tarantula-owning master of the dark arts, is rather well-liked within the Conservative parliamentary party. Throughout “Williamsongate”, there appeared to be a campaign from Conservative MPs to oust the former chief whip. After a long tenure as a parliamentary fixer variously for David Cameron, Theresa May, Boris Johnson and Rishi Sunak, Williamson had simply acquired too many enemies.
But over Zahawi there has been little to no public uproar from Conservative MPs; Caroline Nokes is so far the only MP to put her head above the parapet and call for Zahawi’s head. Perhaps reflecting the mood of the party, former Conservative leader Ian Duncan-Smith was willing to give Zahawi the benefit of the doubt on Sunday, telling BBC News that he “genuinely” doesn’t believe his party chair is being “deceitful”.
Along these lines, the state of play right now might suggest that the scandal surrounding Zahawi’s tax affairs is most analogous to Dominic Raab’s bullying allegations. No Conservative MPs have stated their interest in having the experienced deputy PM leave government.
Furthermore, just as with the ongoing investigation into Raab’s behaviour around civil servants, Sunak has deferred any condemnation over his party chair’s tax conduct to an independent arbiter. Arguably, this is Sunak kicking the can down the road in the hope that the political furore will die down — just as it did with Braverman and appears to be doing with Raab. But it also offers Sunak a political out. The prime minister can point to the operation of the independent ethics adviser in lieu of making a difficult decision on Zahawi’s future himself. Depending on your viewpoint, it is a sign of weakness or smart politics.
But Sunak’s move is nonetheless a gamble, for the political stakes on Zahawi’s tax affairs also appear to be rather higher than those of the bullying allegations against Raab.
Having promised to lead government with “integrity, professionalism and accountability at every level”, Sunak is uber-exposed on matters of probity. The big risk now for Sunak is that Zahawi’s tax affairs will become another chapter in a narrative about Conservative “integrity” (or lack thereof) following a sleaze-heavy period in British politics. It plays directly into Labour’s favourite attack lines. Duly, deputy Labour leader Angela Rayner labelled the prime minister “weak” over the Zahawi issue in the commons on Monday. “You don’t need an ethics adviser to tell you that’s unacceptable”, she added.
Ultimately, Sunak’s decision on Zahawi boils down to a familiar trade-off over whether the political gain of keeping “effective” Zahawi is worth the political pain of the current media furore. And thanks to the cases of Braverman, Williamson and Raab, it is a quandary Sunak already has plenty of experience in.
On the one hand, Zahawi is not associated with any political faction (like Braverman), meaning few would object to a sacking. Equally, the continued presence of Zahawi in government will beg more questions of Sunak’s positioning on “integrity” (like Williamson) and lead directly into Labour’s attack lines on standards.
On the other hand, Zahawi is viewed as a competent operator and is well-liked (unlike Williamson). So there may yet be benefits to retaining his services or at least stalling by pointing to an independent probe (like Raab) in hope that the initial political firestorm blows over.
But the longer this story drags on, the more questions will be asked of Sunak’s positioning. According to the polls, the prime minister vastly outranks his Conservative party in popularity, with his personal ratings regularly shown to be above those of Sir Keir Starmer. But as the political focus moves steadily from Zahawi’s tax affairs to Sunak’s judgment, this could yet change.
Like Williamsongate, Sunak risks staking his own political reputation on someone else’s. It is a risky move and may, in the end, be further evidence of political naivety from our prime minister.
