UK PM orders probe into ally's tax affairs

British Prime Minister Rishi Sunak Monday ordered an investigation into a wealthy ally's murky tax dealings as he again vowed "integrity" in his government after Boris Johnson's scandal-plagued tenure.

As well as the probe into Conservative party chairman Nadhim Zahawi, Sunak faced questions about the appointment of BBC chairman Richard Sharp, a former banker who acted as a go-between to help funnel a loan to Johnson when he was in 10 Downing Street.

The allegations surrounding well-off individuals threaten to become a political distraction for Sunak as he battles to restore the Conservatives' standing in the polls in the midst of Britain's worst cost-of-living crisis in decades.

Opposition Labour leader Keir Starmer accused Sunak of extending Johnson's dismal record of scandal instead of helping people "struggling with their bills, struggling with their jobs, struggling with all of the pressures that come about because of 13 years of (Tory) failure".

But Sunak refused to accede to opposition demands to fire Zahawi, who reportedly settled a seven-figure demand from tax authorities with a fine for late payment when he served briefly as chancellor of the exchequer last year under Johnson.

The prime minister instead commissioned a probe by his newly appointed ministerial ethics adviser, Laurie Magnus, conceding that "clearly in this case, there are questions that need answering".

Sunak appointed Zahawi as party chairman, and cabinet minister without portfolio, when he entered Downing Street in October.

He deflected questions about Zahawi's activities prior to then, as concerns mounted about whether Johnson knew of the tax investigation when he appointed the Iraqi-born politician as chancellor and head of the UK's tax authority.

Zahawi welcomed the probe and insisted he did nothing wrong in the tax case, which stems from his co-founding of the successful polling company YouGov in 2000.

But opposition parties have pointed to his shifting explanations as more details have emerged in newspaper reports, and to his prior threats of libel lawsuits against journalists and a tax consultant who had been digging into the affair.

Seatbelt fine 

Sunak has faced questions himself about his family's tax affairs after it emerged that his Indian wife Akshata Murty had for years enjoyed "non-domicile" status, which shielded her from paying UK taxes on her overseas income from her family's Infosys business group.

And on Monday he reiterated apologies for receiving his second police fine, after he was filmed not wearing a seatbelt in the back seat of a moving car.

As chancellor under Johnson, Sunak was fined along with the then prime minister for attending an illegal workplace party during a Covid lockdown.

The "partygate" scandal was one of several that brought down Johnson. On entering Number 10 in October, Sunak vowed "integrity, professionalism and accountability at every level of the government".

He reiterated that pledge Monday, but was also forced to defend Johnson's appointment of Sharp to one of Britain's most high-profile roles as chairman of the BBC.

According to the Sunday Times, just before he became the chairman, Sharp was involved in securing a private credit line for up to £800,000 (RM4.2 million) for the then-PM from Sam Blyth, an old friend of Sharp who is a distant cousin of Johnson.

Downing Street on Monday defended the BBC appointments process as "rigorous".

But Sunak asked the government's commissioner for public appointments, William Shawcross, to review the recruitment competition. And Sharp directed the BBC board to investigate his own appointment for potential conflicts of interest.

Johnson, however, said any suggestion of a quid pro quo in Sharp's appointment was "a load of complete nonsense".

"This is just another example of the BBC disappearing up its own fundament," he told Sky News.