Nadhim Zahawi should be suspended until tax inquiry is over, says former Tory chairman

UK Prime Minister Rishi Sunak should suspend Nadhim Zahawi while his tax affairs are being investigated, a former Conservative Party chairman has said.

Amid growing fears in the party that the saga has become a major distraction from the government’s agenda, Jake Berry called on the Prime Minister to crack the whip.

Mr Berry said he approves of Mr Sunak’s decision to launch an independent investigation into whether Mr Zahawi breached the ministerial code and to make a decision on his position when the findings have been published.

But he urged him to go a step further.

“The additional step he should take, in my view, is do what all other employers would do … and suspend that individual, or that individual step aside, while the investigation takes place,” Mr Berry told BBC’s Question Time programme on Thursday.

Mr Zahawi should be allowed to return to his position as Conservative Party chairman and Minster without Portfolio in the cabinet only if it is proved he did not break any rules, Mr Berry said.

During a brief stint as chancellor of the exchequer last summer, Mr Zahawi paid a penalty to HM Revenue & Customs (HMRC) to settle a tax dispute. It is estimated the amount he handed over was up to £5 million ($6.19 million).

After the inquiry was announced, Mr Zahawi welcomed a chance to give his account, saying he was confident he had “acted properly throughout”.

Nadhim Zahawi - in pictures

As Mr Zahawi’s fate hangs in the balance, a source close to the MP on Thursday said he had given HMRC permission to speak to Sir Laurie Magnus, the Prime Minister’s independent adviser who is conducting the investigation.

Mr Zahawi, who arrived in the UK as an 11-year-old fleeing the regime of Saddam Hussein, was the first Iraqi-born politician to be appointed to serve in a British government.

Mr Zahawi is known as being one of Britain's the richest MPs, but he was forced to apologise in 2013 for claiming parliamentary expenses for electricity for his stables and a mobile home.

After reports emerged that he had paid a fine to HMRC, he claimed he had merely been careless with his tax affairs.

But Jim Harra, the head of HMRC, said that while he could not comment on individual cases there were “no penalties for innocent errors in your tax affairs”.

He was speaking to cabinet members during an away day at Chequers, the 16th-century manor in Buckinghamshire that serves as the grace-and-favour country residence of the prime minister.

Mr Sunak is continuing to resist calls to suspend Mr Zahawi while the inquiry is taking place.

Asked why Mr Harra’s comments were not evidence enough to sack Mr Zahawi, the Prime Minister told broadcasters: “I’m not going to pre-judge the outcome of the investigation, it’s important that the independent adviser is able to do his work.

“That’s what he’s currently doing, that’s what I’ve asked him to do and I’ll await the findings of that investigation.”

A week ago, Mr Sunak told Prime Minister’s Questions that Mr Zahawi had addressed the fiasco “in full”.

He later ordered the investigation after “additional facts” came to light.

David Gauke, a former Tory cabinet minister, said while Mr Zahwi is a "very popular figure" among Conservative MPs, "it is hard to see how this doesn’t ultimately end in his resignation".