Nadhim Zahawi is resisting calls to quit as chair of the Conservative party amid a row over previously unpaid taxes, as Rishi Sunak was accused of being weak by refusing to sack him.
Despite Labour and some Tory MPs suggesting the cabinet minister should stand down, an ally of Zahawi’s signalled he was digging in and “absolutely not resigning”.
The prime minister will be confronted later over his decision to appoint Zahawi in October and suggestions that the Stratford-upon-Avon MP settled a seven-figure tax bill with HMRC when he was chancellor last summer – including a significant penalty.
During a visit on Monday morning, the prime minister will face questions from broadcasters over the row, as he grapples with upholding the pledge made at the start of his premiership of restoring “integrity” to the government.
However, Labour’s deputy leader, Angela Rayner, called Zahawi’s position “untenable”. She said: “Every hour that Rishi Sunak refuses to sack him shows just how weak the prime minister is.”
Other senior opposition frontbenchers urged him to act quickly. Jonathan Reynolds, the shadow business secretary, said on Monday: “The danger is that the public sees a case like this and they just think all politics and public life revolves in this way – and it doesn’t. It undermines the probity of the country and it undermines the confidence people have in the political system.”
Having spent months refusing to answer questions about unpaid taxes, Zahawi admitted over the weekend he paid HMRC what “was due” after it “disagreed about the exact allocation” of shares in the YouGov polling company he co-founded. He said the team that looked at his case found it was a careless – not deliberate – error.
Some Tories have also piled on the pressure. The backbencher Peter Aldous said on Sunday: “Really you shouldn’t have a situation where the chancellor, his private advisers, have or are negotiating a settlement with HMRC; that’s not acceptable.”
The former Tory leader Iain Duncan Smith also urged Zahawi to “just clear it up” given the remaining questions the minister has refused to answer about whether he incurred a penalty, when the payment to HMRC was made and the size of it, which is estimated to be about £4.8m.
The ex-minister Tim Loughton said Sunak would “take the appropriate action” if more damaging details emerged about Zahawi’s tax affairs, and said it would have been “more helpful” if the Tory chair had explained himself “more fully rather earlier on”.
A source familiar with the payment Zahawi made to HMRC told the Guardian last week that a penalty was triggered as a result of a non-payment of capital gains tax due after the sale of shares in YouGov.
Fresh allegations about Zahawi continued to emerge after the weekend, with the Times reporting that when he was a business minister he wrongly told officials during the Greensill lobbying scandal that he had not exchanged WhatsApp messages with the former prime minister David Cameron that later turned out to have been deleted from his phone. Zahawi has declined to comment on the claim.
