BECAUSE Nadhim Zahawi’s sacking spilled out into the public domain first thing on a Sunday morning, most of the coverage was process-orientated. Why sack him now? Should he have been sacked earlier?
Nobody in the TV or radio studios had much time to digest what Zahawi did wrong and why Downing Street’s ethics adviser Sir Laurie Magnus concluded the Tory chairman and ex-chancellor had engaged in three “serious” breaches of the ministerial code.
By giving the Tory chairman his jotters, Rishi Sunak was able to draw a line under one of the many controversies besetting his government. Relieved Tory MPs could take to the airwaves to give more-in-sorrow-than-in-anger interviews, welcoming the decision as “The Right Thing To Do”. And as it will, the story quickly moved on to the next senior minister, facing questions about their conduct in office.
The sacking was a fait accompli which, perversely, managed to distract focus from the conduct we euphemistically describe as “falling short of the high standards expected of ministers in British public life”.
But we miss something important about the current state of British democracy – and what it tells us about attitudes to scrutiny at the top of the UK Government – if we allow this significant episode in our public life to pass by without reflection. It’s a little parable of our time.
When news of Zahawi’s sacking went public, Michael Gove was sent out to defend the indefensible, and did so with the usual lubrication, depicting the affair as a technical knockout of a “friend” who had made mistakes but with whom he fundamentally sympathised.
This tone was echoed in the official correspondence. Sunak’s letter to Zahawi consisted of a brief sacking on the grounds of a “serious breach” of the ministerial code, followed by a lengthy tribute to his personal achievements and qualities.
When he first entered Downing Street, Sunak asserted that “this government will have integrity, professionalism and accountability at every level”. Nobody who seriously believed in any of these things could have signed-off Zahawi’s career with such a glowing character reference.
Consider the charge sheet. The ex-chancellor’s breaches of the ministerial code were threefold. First, he failed to disclose that he was under investigation by HMRC. Second, he failed to disclose that he’d reached a settlement with the taxman, based on £3.7 million in taxes due, with a 30% penalty and interest thrown in, for a cool final tab of £4.8m in liabilities. The third breach consisted of his failure “to correct the record” – which is Whitehallese for lying through your teeth – about his tax affairs and interactions with HMRC.
This third dimension of the scandal hasn’t got nearly the attention it merits. In public, Zahawi persistently claimed not only that he had “paid all due taxes and obeyed all financial laws and regulations”. Suggestions he was under investigation by the taxman, he insisted, were defamatory fabrications.
In July 2022, he said: “There have been news stories over the last few days which are inaccurate, unfair and are clearly smears”. These “smears” were said to include “false” suggestions “that the Serious Fraud Office, the National Crime Agency, and HMRC are looking into me. Let me be absolutely clear. I am not aware of this. I have not been told that this is the case.”
The reality, of course, was entirely different. To describe Zahawi’s position as wilfully obtuse barely covers the level of credulousness required to believe he could march out in front of the cameras and in good faith describe claims he was subject to HMRC inquiries as “smears.” Those reports were entirely true, as the events of the last week have vindicated.
This is considerably more sinister than mucking up your self-assessment tax return, and nothing in the Tory spin in the wake of this sacking suggests any moral reckoning with this fact. But it gets worse.
Not content with the PR smoke and mirrors, Zahawi did what many rich men do when they find themselves subject to unwelcome scrutiny – got the lawyers involved. He met media queries from the Independent newspaper with persistent threats of “legal action”. It wasn’t just traditional publishers which received legal letters.
Other targets included the former city lawyer Dan Neidle, who received correspondence urging him to recant claims on his Tax Policy Associates blog that Zahawi’s finances looked fishy, and that Neidle reckoned he had circa £3.7m unpaid liabilities based on how he’d bounced his money around offshore accounts.
Uncowed, Neidle published the legal letters, revealing what the second most senior minister in Whitehall was up to, drawing on an extensive network of pro bono legal support to defend his position.
Americans would call this a SLAPP – a “strategic lawsuit against public participation”. The goal of a SLAPP is to muzzle critical voices.
It is a scandal that one of the most senior ministers in government tried to use legal processes in this way.
Having received his P45, Zahawi promptly published a self-pitying missive to the PM about his rags-to-riches story and laying into “the conduct from some of the fourth estate in recent weeks”.
A modest proposal: politicians who use libel laws to secretly threaten members of the public and organs of the press for reporting substantially true stories about investigations into their unpaid tax liabilities have no standing to lecture anyone about media standards.
In another sense, Zahawi’s humbug and evident sense of grievance is entirely in keeping with this government’s attitude to legitimate scrutiny. The official script is that Sunak is a pocket-size knight of probity, decency and fair play, determined to “restore integrity” to British public life.
But for this costume to hang together, it requires us to ignore Sunak’s own chequered history when it comes to financial disclosures and massive defensiveness when confronted with public-interest reporting of his family’s interests.
Remember the media pressures of last year. Then chancellor, Sunak faced three damaging headlines. First, it transpired that his wife Akshata Murty was a “non-dom” for tax purposes.
Second, it was revealed that Sunak and his wife both retained American “green cards” until April 2022 – some seven years after he was first elected as an MP, and five after he entered government. And third, it was revealed that Murty retains a stake of just under 1% in Infosys.
A multinational tech company founded by her father, much of the controversy initially focused on the fact Infosys continued to operate in Russia. While 1% might not sound like a major slice of the corporation, and Murty has no operational role in its business, Murty’s dividends have run into the millions in recent years.
Last week, the story moved on. Infosys has now confirmed that they are embroiled in a fresh tax dispute with HMRC to the tune of £20m in potential corporate tax liabilities.
WHEN these damaging headlines landed, Sunak – like Zahawi – immediately reached for the language of press smears, suggesting “it’s very upsetting and, I think, wrong for people to try and come at my wife”.
He improbably compared himself to Will Smith – who recently assaulted Chris Rock at the Oscars – reflecting that both men had experienced “having our wives attacked”. Sunak consoled himself that “at least I didn’t get up and slap anybody”. The sense of grievance was entirely misplaced.
Confronted with public interest disclosures about their financial interests, both men’s first reaction was to run spurious privacy arguments and mischaracterise the legitimate questions posed by the media as character assassination. In Sunak’s case, this was presented as collateral damage to civilians.
In Zahawi’s, the strategy was to peddle falsehoods in public while making use of expensive lawyers to attempt to intimidate and repress public disclosures of the true state of his tax liabilities. But the sense of affronted entitlement is exactly the same: just who are you to be asking me these impertinent questions?
