Politics: beyond sleaze
By Richard North - January 22, 2023
Top off the media bill today is the murky details of Nadhim Zahawi’s tax affairs, a subject I’ve covered before, largely in the context of the Tory leadership campaign.
What is interesting – as so often – is the way the individual media outlets are handling the latest development. The Tory-loving Telegraph does its best to play the embarrassment down, with the headline: “Nadhim Zahawi: My tax error was careless, not deliberate”.
For the sub-heading, we get “Tory chairman issues statement to ‘address some of the confusion about my finances’ amid reports he paid penalty of over £1m to HMRC”, which just about takes the biscuit. We are, it seems, confronting nothing more serious than a little bit of “confusion”.
The Sunday Times, however, offers a different perspective, employing Dan Neidle, a self-described “city lawyer turned tax sleuth” whose work identified the incongruities in Zahawi’s claims.
Neidle explains “how he finally got to the bottom of the former chancellor’s finances”, with a piece headed, “When I said Nadhim Zahawi owed the taxman, he set his lawyers on me. Now he’s handed over millions”.
The background is explained well enough not to need repeating here, but with the Observer having been an interested party through the drama, it is unsurprising that the paper follows up the current developments with no fewer than four separate pieces.
The first follows roughly the “official” line, with the headline, “Nadhim Zahawi claims error with his taxes ‘careless not deliberate’”, offering the sub-head: “Comments follow reports that Tory party chair paid HMRC a penalty as part of a multimillion-pound tax settlement”.
Not in any particular order, this is followed by: “Nadhim Zahawi: the questions over his tax affairs that won’t go away”, noting in the sub-heading that, “Opposition calls for the Conservative party chairman to reveal details of the settlement he arrived at with HMRC”.
A third article tells us, “Nadhim Zahawi’s position as Tory chair ‘untenable’, says Labour”, with the sub-heading telling us that, “Angela Rayner calls for explanation after it emerged former chancellor paid 30% penalty to settle tax bill”.
Finally, we get, “Nadhim Zahawi fights for his political life after admitting tax ‘error’”, with the “error” in careful parenthesis, indicating exactly the right level of scepticism, without exposing the paper to an undue risk of litigation from a man who is a heavy user of legal services.
This piece gives us the thrust of the story, which has Zahawi “finally” admitting that he has reached a tax settlement with HM Revenue and Customs (HMRC) following what he claims was an “error” over a controversial multimillion-pound shareholding in the polling company YouGov.
In a carefully worded statement, Zahawi is said to have “appeared” to confirm that HMRC had carried out an investigation into his financial affairs while he was serving as chancellor last summer. Zahawi, now the Tory party chairman, said that the tax authority had concluded that he had made a “careless but not deliberate” error.
His statement continues: “So that I could focus on my life as a public servant, I chose to settle the matter and pay what they said was due, which was the right thing to do”. The paper then goes on to say that tax experts said the statement was a tacit acknowledgment that Zahawi had paid a penalty.
The significance of this is that the “careless but not deliberate” schtick comes solely from Zahawi, while the penalty – said to be a seven-figure sum – tells a somewhat different story.
Bearing in mind that this man was held a brief tenure as chancellor of the exchequer under the foul Johnson, and now holds a key position as head of the Conservative Party – appointed by Sunak – the real issue should not be focused on him fighting for his political life. Rather, there should be serious questions as to why this man has a political life at all.
For those of us who expect a “Caesar’s wife” level of probity from senior politicians, Zahawi – as a first generation Iraqi Kurd – is no stranger to dealings with dubious outfits, with a record of media interest going back to 2016, when the Sunday Times raised the possibility of an investigation by the Serious Fraud Office into the collapse of an oil company that had been advised for three years by Zahawi, then just a mere Tory MP.
As I wrote at the time, this was a reference to the Afren Group which had been embroiled in an executive pay scandal and had filed for administration with debts of £1.3 billion.
Furthermore, this had not been the only oil group with which Zahawi had a relationship. He had worked as chief strategy officer for Gulf Keystone Petroleum, which had paid him £52,325 in backpay in October 2015 and a monthly salary of £20,000 from October 2015, rising to almost £30,000 a month in August 2017, and about £330,000 in bonus payments.
This had been in addition to his part-time job as MP for Stratford-upon-Avon, to which he was elected in 2010 and just part of his colourful career which had him declaring shareholdings in Genel Energy, an Anglo-Turkish oil and gas exploration and production company, and a donation from Amjad Bseisu, the chief executive of the UK-based oil company EnQuest.
Relying on the Sunday Times story, I also noted that people made accusations about Zahawi at their peril. In 2017, he sued an Iranian affiliated broadcaster for libel, being awarded £200,000 in damages with legal costs of £138,483 in an undefended case.
However, I observed, given the furore about MPs with second jobs, it was not untoward to say that, as an MP, Zahawi did not come over as a public servant dedicating his entire energies to the public good. Only when he became a minister in 2018 did he finally give up his alternative remuneration, as required by the rules.
Even as an MP, Zahawi has never focused on his life as a “public servant”, placing self-enrichment very high up his list of priorities, yet still having the chutzpah to stand in the Tory Party leadership contest. It says something that he managed to acquire 25 votes, when even then his tax affairs cast a dark shadow over his bona fides.
The fact that this man is now Conservative Party chairman tells you all you need to know about a political party that has lost its way, harbouring spivs and opportunists, electing Boris Johnson, a prime minister with dubious credentials, who is now embroiled in yet another financial controversy.
This has the BBC chairman helping to arrange a guarantee on a loan of up to £800,000 for Johnson weeks before the then prime minister recommended him for the role.
Even for those who recall the taint of Tory sleaze in 1997, which paved the way for Blair to sweep into office, the current situation is immeasurably worse. There hardly seems to be a corner of this administration which escapes the taint of dodgy dealing, even if the primary driver is mere incompetence.
In a way, the behaviour of this government is beyond sleaze, charting a decline in public standards that is entirely typified by Zahawi’s continued tenure as an MP, and the holder of high office. We seem to have institutionalised corruption to such an extent that it has become the norm. Politics has become the dustbin of the nation.