TORY chairman Nadhim Zahawi’s tax problems are a bigger headache for the Prime Minister than he has yet acknowledged.
Zahawi pleads that it was mere carelessness that saw him forced to pay HMRC nearly £5 million in unpaid tax (inclusive of a penalty) while he was, er, the Chancellor of the Exchequer.
Financial sloppiness isn’t a great look for a chancellor, but in Zahawi’s defence he’s admitted to it before. It was after all a “genuine mistake” that saw him claim thousands in expenses to heat the stables for a horse-riding school on his Warwickshire estate.
For the Tories it hardly matters whether Zahawi bows to Labour’s demands to publish his correspondence with HMRC to demonstrate he is telling the truth about underpaying tax being an oversight.
We know he broke the rules, because he had to pay a heavy penalty. And the sum alone is a political problem.
In the midst of the cost-of-living crisis, as the government insists there is no money to pay nurses or ambulance workers or teachers a proper raise, as headlines focus on households forced onto extortionate pre-payment energy meters and the soaring cost of food, we have a reminder that those around the Cabinet table live on a different planet.
Whose finances are so flush they can underpay millions in tax? If he underpaid deliberately he is dishonest; if he did so accidentally it is hardly a better look. While we are watching the pennies, Zahawi shows he has no need to keep track of the pounds.
And the oil exec turned Conservative minister is not some anomaly. His party’s most prominent faces are associated with enormous wealth.
This month we learned that Tory MPs had bagged £15.2m from “second jobs” (the term is a generous one) since the last election. Former PMs Theresa May and Boris Johnson topped the list, raking in £2.5m and over £1m respectively, mainly from public speaking engagements.
The news raises suspicions that — as for Tony Blair, the sources of whose huge fortune accumulated after leaving No 10 remain murky — even prime ministerial office is no longer the pinnacle of a politician’s career, but a stepping stone to a place among the plutocrats.
Coming out of the pandemic, the Tories are already viewed with suspicion as a party on the take. Disgraced ex-health secretary Matt Hancock was most notorious for handing public health contracts to personal acquaintances — including a firm run by his own sister in which he had a sizeable share — but the whole contracting-out process stank of sleaze.
Rishi Sunak himself declined to say whether a surge in share prices for Moderna, whose vaccine was among those used in Britain, enriched him personally due to the shares his hedge fund Theleme Partners had in the pharmaceutical giant.
And it is Sunak’s own status that makes the Zahawi affair so toxic. Reports speak rightly of Zahawi as “one of the richest men in Parliament.”
But Sunak is richer still. He is the richest man in Parliament. The richest ever British prime minister. The first front-line politician ever to feature on the Sunday Times rich list.
The contrast between top Tories’ immense wealth and the utter destitution facing millions could yet prove explosive.
Labour rails at Conservative “corruption and cronyism,” but the fundamental issue is more basic still. This is a government of the rich, for the rich, by the rich and it is making us poorer.
It is that class antagonism that the left must articulate on platforms and picket lines. We don’t just want the system cleaned up — we want it torn down altogether.
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