UK Prime Minister Rishi Sunak fires Conservative Party chairman Nadhim Zahawi over tax scandal

By Peter Wilkinson, CNN

UK Prime Minister Rishi Sunak bowed to pressure on Sunday by firing the Conservative Party chairman Nadhim Zahawi for a “serious breach” of the Ministerial Code, following days of criticism over his personal tax arrangements.

Sunak last week ordered his ethics adviser to investigate Zahawi following claims he had paid a penalty as part of a reported £4.8 million ($5.96 million) settlement with tax officials. It was alleged that Zahawi did not declare the dispute with tax authorities.

Zahawi was appointed chancellor of the exchequer — finance minister — by former prime minister Boris Johnson in July last year. He remained in the Cabinet under Johnson’s successor Liz Truss and her successor, Sunak, who made him party chairman.

In a letter to Zahawi, Sunak said that, after the investigation completed its work, “it is clear that there has been a serious breach of the Ministerial Code. As a result, I have informed you of my decision to remove you from your position in His Majesty’s Government.” The UK’s Ministerial Code sets out the standards of conduct expected of ministers and how they discharge their duties.

Reports of Zahawi’s multi-million-pound settlement with tax officials shocked Britons, many of whom are battling to survive amid the cost-of-living crisis.

‘Stench of sleaze’

The opposition Labour Party said Sunak, who came into office pledging “integrity, professionalism and accountability at every level,” should have dismissed Zahawi when the claims were first reported this month, instead of trying to buy time by launching an investigation.

Senior Labour lawmaker Bridget Phillipson told Sky News that the scandal exposed Sunak as a “weak” leader.

“The stench of sleaze just hangs around the Conservative party,” she said.

Sunak himself has also been scrutinized over the tax arrangements of his wife Akshata Murty, the daughter of an Indian billionaire. Last year, Sunak and Murty appeared on the Sunday Times Rich List of the UK’s 250 wealthiest people — the newspaper estimated their joint net worth at £730 million ($826 million).

Last year it emerged that Murty had enjoyed “non-domicile” status in the UK that meant she could legally avoid paying UK taxes on her foreign earnings from her family’s Infosys business group.

Last week he apologized for receiving his second police fine, for failing to wear a seatbelt while riding in a car. While he was chancellor Sunak was fined by police with Johnson for attending lockdown-breaking parties held on UK government premises.

In a letter responding to his dismissal published Sunday, Zahawi said it had been the privilege of his life to serve in successive UK governments. He made no explicit reference to the findings of the ethics inquiry into his tax affairs.

“I arrived in this country fleeing persecution and speaking no English. Here, I built a successful business and served in some of the highest offices in government. I believe that in no other country on earth would my story be possible,” the statement read.

Zahawi was born in Iraq to Kurdish parents and came to the UK as a child, when his family fled Saddam Hussein’s regime. He is believed to be one of the richest politicians in the House of Commons, and helped found the polling company YouGov.

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CNN’s Jorge Engels, Eliza Mackintosh and Luke McGee contributed to this report.