Zahawi says ‘I’m confident I acted properly throughout’ as he welcomes inquiry into tax settlement

Nadhim Zahawi, the Conservative party chair, has welcomed the decision by Rishi Sunak to ask the No 10 ethics adviser to investigate his case. “I am confident I acted properly throughout,” Zahawi said.

Zahawi seems to be using a narrow definition of “properly”. In the statement he issued yesterday, he accepted that his original decision not to pay the tax that HM Revenue and Customs subsequently concluded he should have paid was down to a careless error. He said:

Following discussions with HMRC, they agreed that my father was entitled to founder shares in YouGov, though they disagreed about the exact allocation. They concluded that this was a ‘careless and not deliberate’ error.

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BBC chairman Richard Sharp offers detailed account of his involvement in loan guarantee offer to Boris Johnson

PA Media has released the full text of the message that Richard Sharp, the BBC chairman, has sent to BBC staff this morning announcing an internal inquiry into claims there was a conflict of interest when he was appointed. (See 10.34am.) Since it does not seem to be available online, I will post extensive extracts here.

This matter, although it took place before I joined the BBC, is a distraction for the organisation, which I regret. I’m really sorry about it all.

Prior to my appointment [as BBC chairman], I introduced an old friend of mine – and distant cousin of the then prime minister – Sam Blythe [sic], to the cabinet secretary, as Sam wanted to support Boris Johnson.

I was not involved in making a loan, or arranging a guarantee, and I did not arrange any financing. What I did do was to seek an introduction of Sam Blythe to the relevant official in government.

Sam Blythe, who I have known for more than 40 years, lives in London and having become aware of the financial pressures on the then prime minister, and being a successful entrepreneur, he told me he wanted to explore whether he could assist.

He spoke to me because he trusts me and wanted to check with me what the right way to go about this could be.

I told him that this was a sensitive area in any event, particularly so as Sam is a Canadian, and that he should seek to have the Cabinet Office involved and have the cabinet secretary advise on appropriateness and indeed whether any financial support Sam might wish to provide was possible. Accordingly Sam asked me whether I would connect him with the cabinet secretary.

At the time I was working in Downing Street as a special economic adviser to the Treasury during the pandemic, and I had submitted my application to be chairman of the BBC.

I went to see the cabinet secretary and explained who Sam was, and that as a cousin of the then prime minister he wanted to help him if possible.

I also reminded the cabinet secretary that I had submitted my application for the position of BBC chairman.

We both agreed that to avoid any conflict that I should have nothing further to do with the matter. At that point there was no detail on the proposed arrangements and I had no knowledge of whether any assistance was possible, or could be agreed.

Since that meeting I have had no involvement whatsoever with any process. Even now, I don’t know any more than is reported in the media about a loan or reported guarantee.

I am now aware that the Cabinet Office have a note of this meeting, and that this included advice to the Prime Minister that I should not be involved, to avoid any conflict or appearance of conflict with my BBC application.

The Cabinet Office have confirmed that the recruitment process was followed appropriately and that I was appointed on merit, in a process which was independently monitored.

Richard Sharp (left) and Boris Johnson. Photograph: House of Commons/PA

The Liberal Democrats says that if Rishi Sunak is not prepared to sack Nadhim Zahawi, at least he should suspend him pending the inquiry by the ethics adviser. In a statement Daisy Cooper, the party’s deputy leader, said:

The gear-change from ‘nothing to see here’ to ordering a major ethics investigation in just a few days, puts Sunak’s own judgment in the spotlight once again.

If Sunak won’t do the decent thing and sack Zahawi, the least he can do is suspend him for the duration of the investigation.

Sunak says ‘of course’ people can still trust him to obey the law despite seatbelt fine, which was ‘mistake’

Rishi Sunak has also said that the fact that he was fined last week for not wearing a seatbelt should not mean that people cannot trust him to obey the law.

In his first public comment on the fine, which was issued on Friday, Sunak said:

Yes, I regret not wearing a seatbelt. It was a mistake and that is why I apologised straight away.

Asked whether the public could trust him as PM to follow the “laws of the land” following his fine, Sunak replied:

Of course I do.

In this instance, I made a mistake which I regret deeply and that’s why I apologised straight away.

Rishi Sunak speaking to the media during a visit to Berrywood hospital in Northampton this morning.
Rishi Sunak speaking to the media during a visit to Berrywood hospital in Northampton this morning. Photograph: Toby Melville/Reuters

Sunak says process for appointing BBC chairman ‘rigorous’, ‘independent’ and ‘transparent’

Rishi Sunak has defended the appointment of Richard Sharp as BBC chairman. Asked about the claims that Sharp did not disclose a potential conflict of interest when he was appointed by Boris Johnson, Sunak told reporters during a visit to a hospital in Northamptonshire:

This appointment was obviously made by one of my predecessors before I became prime minister.

The appointments process itself for appointing the BBC chairman is a rigorous process, it is independent, there are two stages to it, it is transparent and published online.

Mr Sharp’s appointment went through that full process.

Zahawi says he is carrying on as Tory chair and will not be discussing tax row in public while inquiry underway

Here is Nadhim Zahawi’s full statement in response to the announcement of the inquiry by No 10’s ethics adviser. He says that he will not be commenting further on the affair in public while the inquiry is underway and that he will be carrying on as Conservative chair in the meantime.

I welcome the prime minister’s referral of this matter to the independent adviser on ministerial standards. I look forward to explaining the facts of this issue to Sir Laurie Magnus and his team.

I am confident I acted properly throughout and look forward to answering any and all specific questions in a formal setting to Sir Laurie.

In order to ensure the independence of this process, you will understand that it would be inappropriate to discuss this issue any further, as I continue my duties as chairman of the Conservative and Unionist party.

Zahawi says ‘I’m confident I acted properly throughout’ as he welcomes inquiry into tax settlement

Nadhim Zahawi, the Conservative party chair, has welcomed the decision by Rishi Sunak to ask the No 10 ethics adviser to investigate his case. “I am confident I acted properly throughout,” Zahawi said.

Zahawi seems to be using a narrow definition of “properly”. In the statement he issued yesterday, he accepted that his original decision not to pay the tax that HM Revenue and Customs subsequently concluded he should have paid was down to a careless error. He said:

Following discussions with HMRC, they agreed that my father was entitled to founder shares in YouGov, though they disagreed about the exact allocation. They concluded that this was a ‘careless and not deliberate’ error.

Sunak says ‘clearly questions need answering’ about Zahawi’s tax affairs as he announces inquiry

This is what Rishi Sunak told reporters this morning about his decision to ask his new ethics adviser, Sir Laurie Magnus, to investigate Nadhim Zahawi’s tax settlement with HM Revenue and Customs. Sunak said:

Integrity and accountability is really important to me and clearly in this case there are questions that need answering …

That’s why the independent adviser has been asked to fully investigate this matter and provide advice to me on Nadhim Zahawi’s compliance with the ministerial code, and on the basis of that we’ll decide on the appropriate next steps.

Asked whether Zahawi should not stand down during the investigation, Sunak said: “As is longstanding practice, he will continue to play the role he does.”

On the subject of the questions that need answering, the Observer published a good list at the weekend.

Johnson accuses BBC of ‘disappearing up its own fundament’ as he dismisses chairman appointment controversy as ‘nonsense’

Boris Johnson has dismissed claims that there was anything improper in his appointment of Richard Sharp as BBC chairman as “absolute nonsense”.

Doorstepped by reporters this morning, and asked if he would welcome an inquiry into the claims that Sharp should have declared that he was helping Johnson obtain a loan guarantee shortly before he was appointed by Johnson to be chairman of the BBC, Johnson said:

This is a load of complete nonsense, absolute nonsense.

Let me just tell you – Richard Sharp is a good and a wise man. But he knows absolutely nothing about my personal finances, I can tell you that for 100% ding-dang sure.

This is just another example of the BBC disappearing up its own fundament.

Johnson did not answer any further questions.

His comment does not address the issue at the heart of the story. The question is not whether or not Sharp knew the details of Johnson’s personal finances; the claim is that his involvement in helping Johnson obtain a loan guarantee could be seen as creating a conflict of interest that was not declared at the time the appointment was approved.

Boris Johnson speaking to reporters this morning
Boris Johnson speaking to reporters this morning. Photograph: Sky News

Rishi Sunak asks No 10 ethics adviser to investigate Nadhim Zahawi tax settlement case

Rishi Sunak has asked his new ethics adviser to investigate Nadhim Zahawi’s tax settlement with HM Revenue and Customs, PA Media reports. It has just snapped this.

Rishi Sunak has asked his independent ethics adviser to look into the Nadhim Zahawi case, as “clearly in this case there are questions that need answering”.

BBC announces internal inquiry into claims of conflict of interest when its chairman appointed by Boris Johnson

Richard Sharp, the BBC chairman, has announced that an internal inquiry will investigate allegations that he did not declare a conflict of interest when he was appointed to the job by Boris Johnson.

The allegations arose following a report in the Sunday Times yesterday saying that, at around the time he was applying for the BBC post, Sharp helped Johnson secure a £800,000 loan guarantee by putting the person willing to guarantee the loan facility in touch with Simon Case, the cabinet secretary, who needed to approve it.

In his statement, Sharp said:

We have many challenges at the BBC and I know that distractions such as this are not welcome.

Our work at the BBC is rooted in trust. Although the appointment of the BBC chairman is solely a matter for the government … I want to ensure that all the appropriate guidelines have been followed within the BBC since I have joined.

The nominations committee of the BBC board has responsibility for regularly reviewing board members conflicts of interest and I have agreed with the board’s senior independent director, Sir Nicholas Serota, that the committee shall assess this when it next meets, reporting to the board, and in the interests of transparency publish the conclusions.

Sharp said he had agreed “with the board’s senior independent director that the committee shall look at this when it next meets and, in the interests of transparency, publish the conclusions”.

Yesterday the Sunday Times quoted Sharp as saying that he did not declare his involvement at the time he was being appointed because there was no conflict of interest. Sharp told the paper:

There is not a conflict when I simply connected, at his request, [Sam Blyth, who did offer the loan guarantee] with the cabinet secretary and had no further involvement whatsoever.

Unite general secretary Sharon Graham suggests Tories don’t want to resolve health strikes because they want to privatise NHS

In an article for the Guardian, Gordon Brown, the former Labour PM, says that the Conservatives are exploring introducing charging into the NHS, in a move that would formalise “two-tier healthcare”. Referring to an article the Sajid Javid, the former health secretary, published in the Times on Saturday, Brown says:

Sajid Javid, a former chancellor and health secretary, has written approvingly of the £20 fee that some European countries charge for visits to the GP. He labels Ireland’s €75 (£66) bill for attending an A&E without a GP’s referral as merely “nominal”, as if it’s so modest that a higher charge would be more appropriate. And he calls for a national debate on the contribution private financing can make to healthcare.

But the direction in which the Conservatives are travelling is already clear. The sick would pay for being sick and charging would force, as has happened with GP and hospital fees in France, the better-off sections of the population to take out private insurance – inevitably creating, in its wake, a two-tier healthcare system.

Javid’s intervention in favour of what he calls “nothing short of a 1948-style moment” is no accident. The prime minister, Rishi Sunak, who has used private healthcare, once came up with a proposal for new charges: £10 for patients who miss GP and hospital appointments. And so once again, as they did in opposition at the turn of this century, with Alternative Prescriptions, Conservatives are testing the water for a different kind of NHS.

Brown says charging would be inefficient and unfair, but he also says the NHS does need a new funding settlement. He says:

As a former chancellor, I have said for some time that the NHS refinancing that Labour achieved in 2002 – a 6.3% real terms annual rise between 2000 and 2010 – had to be revisited every decade. This hasn’t happened under the Conservatives, and the consequences are visible to all of us. But the pressures the NHS faces make the case for comprehensive funding through national insurance even stronger; and show why this is to be preferred to either European-style social insurance, or private insurance.

Sharon Graham, the Unite general secretary, made a similar claim in an interview on the Today programme this morning. She criticised Rishi Sunak for not getting involved in talks to end the health strikes, and she said she was now “seriously thinking” that there was a “more sinister” reason for the Tories not wanting to see the dispute settled. She said:

I believe that [the Conservatives] have an agenda in terms of privatising the NHS. Sajid Javid’s comments over the weekend weren’t done whoopsie daisy, they were very deliberate. They were flagged to see how it flew. I am very, very concerned now that they have another agenda.

Asked what evidence there was that the Tories wanted to privatise the NHS, Graham said:

I was around when Jeremy Hunt was the health secretary, and he wanted the NHS in the American trade deal part. And what we’re seeing now is such an act of self harm, I cannot understand why the prime minister does not come to the table … and gets this deal done.

Sharon Graham, the Unite general secretary, on a picket line with North West ambulance service staff in Chorley this morning.
Sharon Graham, the Unite general secretary, on a picket line with North West ambulance service staff in Chorley this morning. Photograph: Christopher Furlong/Getty Images

Health workers outside Aintree university hospital in Liverpool. Ambulance staff are on strike across England today, and other NHS staff are also on strike in Liverpool.
Health workers outside Aintree university hospital in Liverpool. Ambulance staff are on strike across England today, and other NHS staff are also on strike in Liverpool. Photograph: Peter Byrne/PA

Paul Goodman, editor of the ConservativeHome website and a former Conservative MP, is not particularly optimistic about Nadhim Zahawi’s survival chances in a good article on the topic published this morning. Here’s an extract.

For when a minister comes under fire, the prime minister’s support is essential. If it is heartfelt, the latter may find a way of saying a few words for a camera or the airwaves. The view of the minister’s colleagues will also be important. If they queue up to defend him, they will either believe his account of events, like him, or have an interest in backing him – not least because they may be next.

You will have your own take, but James Cleverly, the luckless minister on media duty yesterday, didn’t say that he had confidence in Zahawi as party chairman, but that his colleagues’ futures are a matter for the prime minister. That wasn’t exactly a vote of confidence. Meanwhile, Iain Duncan Smith, who was also in the TV studios, urged Zahawi to “get it all out now, whatever you have to do, and clear it up”.

I haven’t yet spoken to anyone in Downing Street with a less cautious view. It’s a big place with many staff, not all of whom will have the same opinion – a point to bear in mind when you read articles quoting “Number Ten”. Duncan Smith said that “I genuinely don’t believe this is a man who is deceitful in any shape or form”. But one senior figure I spoke to yesterday said that he wasn’t convinced by Zahawi’s account of events.

Nadhim Zahawi arriving at Conservative party HQ in Westminster this morning.
Nadhim Zahawi arriving at Conservative party HQ in Westminster this morning.
Photograph: James Manning/PA

Nadhim Zahawi has arrived at the Conservative party’s HQ in Westminster this morning, PA Media reports. The Tory chairman said “Morning!” to the press gathered outside. He then went inside the building.

Nadhim Zahawi entering CCHQ.
Nadhim Zahawi entering CCHQ. Photograph: James Manning/PA

Nadhim Zahawi’s job as Tory chair ‘hanging by a thread’, says former No 10 communications chief

Good morning. Since the end of the second world war, UK governments have generally been brought down by economic/financial crises (1970, 1974, 1979, 2010) or sleaze/ethics crises (1964, 1997). The current Conservative government is on course to fail on both.

Ambulance staff are on strike again over pay. And Nadhim Zahawi, the Conservative party chair, is under pressure to resign over revelations that he paid a penalty to settle a tax dispute while he was in cabinet.

Here is my colleague Peter Walker’s overnight night story about the pressure he is facing.

Here is an explainer from my colleague Archie Bland.

This is from Archie’s daily First Edition briefing. You can sign up to get it as an email here.

And here are the developments on this story this morning.

  • Zahawi reached his settlement with HM Revenue and Customs, and paid the penalty he owed, while he was chancellor, it has been confirmed.

  • Craig Oliver, head of communications at No 10 when David Cameron was prime minister, has described Zahawi as “in serious trouble” and “hanging by a thread”. In an interview with the Today programme, Oliver said:

I think that [Zahawi] is in serious trouble. You cannot be Conservative party chairman and not go out and face the media. So at some stage he’s going to have to go out and have a very, very difficult interview.

The problem, I think, at the moment is, it doesn’t all add up. Why did you take the job of chancellor when you were clearly in dispute with the HMRC? He has yet to come out with an answer that is satisfying or feels comfortable on that point.

It’s dealing with sums of money which are astronomical to the average voter and it feels deeply uncomfortable.

And I suspect that prime minister’s questions this week is to be very awkward for Rishi Sunak but also the first time that Nadhim Zahawi has to face the media is going to be incredibly awkward too.

So I think that at the moment he’s hanging on by a thread.

Nadhim Zahawi digging in this morning, despite the clamour for him to go over previously un-paid taxes.

A source close to the Conservative party chairman says: “He is absolutely not resigning.”

— Aubrey Allegretti (@breeallegretti) January 23, 2023

Here is the agenda for the day.

Morning: Rishi Sunak is expected to record a pooled TV interview while on a health visit.

11.30am: Downing Street holds a lobby briefing.

11.30am: Nicola Sturgeon, Scotland’s first minister, holds a press conference.

3pm: Bertie Ahern, the former taoiseach (Irish PM), gives evidence to the Commons Northern Ireland affairs committee on the institutions created by the Good Friday agreement.

4pm: Dehenna Davison, the levelling up minister, gives evidence to the levelling up committee on levelling up funding.

4pm: Sarah Healey, permanent secretary, at the Department for Digital, Culture, Media and Sport, gives evidence to the Commons public accounts committee.

I’ll try to monitor the comments below the line (BTL) but it is impossible to read them all. If you have a direct question, do include “Andrew” in it somewhere and I’m more likely to find it. I do try to answer questions, and if they are of general interest I will post the question and reply above the line (ATL), although I can’t promise to do this for everyone.

If you want to attract my attention quickly, it is probably better to use Twitter. I’m on @AndrewSparrow.

Alternatively, you can email me at andrew.sparrow@theguardian.com

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