Former Tory minister calls for Nadhim Zahawi to step down

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A former Conservative cabinet minister has called for Nadhim Zahawi to step down as party chair while an ethics investigation takes place into his tax affairs.

The former immigration minister Caroline Nokes said the story had become a distraction for the Tories and the prime minister and that Zahawi should “step aside” for the greater good.

The policing minister, Chris Philp, rejected those suggestions on Tuesday morning, saying it was reasonable there should be a presumption of innocence.

On Monday, Rishi Sunak instructed his ethics adviser to investigate Zahawi’s tax affairs but faces growing pressure over whether he knew about the HMRC inquiry when he appointed Zahawi to his cabinet.

It has emerged that Zahawi resolved a multimillion-pound tax dispute with HMRC by paying a penalty during his short time as chancellor under Boris Johnson.

Sunak’s official spokesperson said the prime minister was not aware that Zahawi had paid a penalty to HMRC when he told MPs in the Commons last week his colleague had “addressed the matter in full”.

A source in the government told the Guardian that No 10 had been aware of a penalty as part of a settlement with HMRC when Sunak appointed Zahawi, who is also a Cabinet Office minister, to the role. However, Downing Street denied the claim.

Nokes said she welcomed the investigation because there are “too many unanswered questions” about the affair but said Zahawi could not survive the onslaught of negative front pages.

“When you become the story, it’s a distraction from anything else the government’s trying to do,” she told TalkTV. “There are countless examples of good, competent cabinet colleagues who got themselves in a mess, who have resigned and in some instances returned just a few months later, and I think in order to get this cleared up, Nadhim should stand aside and let the investigation run its course.”

Nokes was an outspoken critic of Johnson and said he also bore some of the blame for the unfolding story. “I would lay part of the blame at Boris Johnson, this is a legacy problem. Much like the BBC story [about a loan guarantee for Johnson] – this is a hangover from his time.”

Philp said he did not think it was appropriate for Zahawi to recuse himself. He told BBC Breakfast: “I think it is reasonable that where there is an investigation, the person concerned is allowed to continue serving while that investigation continues.

“We do have a principle, don’t we in this country, innocent until proven guilty. That applies to a whole range of different circumstances. But I don’t think it is fair to jump to any conclusions before the investigation has concluded.”

Philp repeated No 10’s claim that Sunak was told there were “no outstanding issues” in relation to Zahawi’s tax affairs when appointing him Conservative party chair in the autumn.

“As far as I’m aware, the point at which Nadhim Zahawi was appointed to his current position by the current prime minister, the prime minister was not aware of the previous back and forward earlier in the summer,” he told Times Radio.

“And he was told there were no outstanding issues – taxation issues – applicable at that time. Obviously subsequent to that, particularly over the weekend just gone, a number of questions have arisen, have come up publicly. And it is in response to those that the prime minister has quite rightly announced this independent investigation.”