Rishi Sunak has never paid a penalty to HMRC, No 10 says, amid growing pressure over Nadhim Zahawi – as it happened

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• Keir Starmer has suggested that the job of prime minister is “too big” for Rishi Sunak. (See 1.33pm.) He delivered the jibe during exchanges at PMQs where he also directly linked questions about the Conservative party chair’s finances to the prime minister’s own family tax situation.

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• Michael Gove has promised to bring the “spirit” of Thatcherism to the north of England, at a conference where he failed to meet most of the region’s leaders.

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• The Treasury is reviewing its procedures after the Russian founder of a mercenary army was given permission to circumvent sanctions to attempt to silence a British journalist.

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• The government’s economic forecaster has cut its prediction for UK growth this year, limiting the Treasury’s spending firepower in the forthcoming budget, according to a report.

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For some days now Downing Street has been refusing to say whether or not Rishi Sunak has ever paid a penalty to HMRC. At first it sounded as if the spokesperson just did not know, but by lunchtime today – as Downing Street was still dodging this question (see 2.10pm) – the refusal to answer sounded more suspicious.

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At its own briefing today Labour said that Keir Starmer had never paid a penalty to HMRC, and it challenged Sunak to answer the question.

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Now he has. A No 10 spokesperson has just released this statement to the media.

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The prime minister has never paid a penalty to HMRC.

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In his speech in Manchester Michael Gove, the levelling up secretary, hinted that there would be a modest level of fiscal devolution for local government in the budget. (See 4.50pm.) In her subsequent speech to the same Convention of the North conference Lisa Nandy, the shadow levelling up secretary, said Labour would implement “the biggest transfer of power out of Whitehall and Westminster”.

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She said that, without devolution, Britain would not have a future.

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We can debate the merits of differing devolution models and funding formulas.

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But this is the collective task facing our generation of political leaders.

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To respond to that siren call or face obsolescence. To change or die.

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We must succeed where successive generations have failed, in various ways, to varying degrees, for a century, and we must do so for one simple reason – because ending a century of centralisation and unleashing the power of all people in all parts of Britain is no longer a nice to have, a local or a regional issue, it is at the heart of whether this country has a future or not.

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It is the only way to heal a fractured and divided nation.

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It is the only way to build an economy that works for most of us again, so we can fund our public services and sustain thriving places.

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In short, it is the only way to build a country that works.

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Recently Keir Starmer announced plans for a “take back control” bill in Labour’s first King’s speech to give new powers to mayors and local authorities. Nandy claimed this would “flip the presumption of power from Whitehall to the town hall”. She explained:

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Oppositions tend to like the idea of handing over power. Governments less so.

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But if you ask for powers, we will hand them over or explain why not. And if there are reasons why not we will be obliged to set out a path for communities to realise that ambition.

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No more top-down determinism of which communities qualify for powers and which don’t. An end to central government dictating local governance models as a bargaining chip.

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In the [Take Back Control] Act will be a promise, written into law, that leaders can request anything that has already been devolved to another area of a similar scale within England.

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Rishi Sunak and his cabinet will decamp to Chequers for an away day tomorrow as the government continues to face questions about the tax affairs of Nadhim Zahawi, PA Media reports. PA says:

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The outing, which Downing Street said would focus on the prime minister’s political priorities, was dubbed a “hideaway day” by opposition parties.

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Zahawi is expected to join the gathering at the country retreat against a backdrop of an ethics inquiry into the Conservative chairman.

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Labour leader Keir Starmer grilled Sunak in the Commons about the controversy today, accusing him of being too weak to sack his embattled party chairman.

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The prime minister said it might be “politically expedient” to sack Zahawi, but it is important for “due process” to be followed.

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Downing Street offered few details about what the away day would entail, but the prime minister’s official spokesman said cabinet ministers would be “focused on the five priority areas that the prime minister talked about in his speech, both in terms of getting an update on progress on those five goals and what more can be done”.

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Last week Andy Street, the West Midlands mayor who is arguably the most senior Conservative in local government, launched a fierce attack on the way levelling up funds are distributed. Referring to the levelling up awards released that day, he said they showed “why Whitehall’s bidding and begging-bowl culture is broken” and why “the sooner we can decentralise and move to proper fiscal devolution the better”.

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To get money from the levelling up fund, councils had to draw up a bid and make their case to Westminster. Much local government funding is distributed this way, and for years councils have argued that it would be better for central government to distribute lump sums with no strings attached, allowing local leaders to decide how the money should be spent.

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In his speech to the Convention of the North conference, Michael Gove, the levelling up secretary, said the budget would contain plans to “extend local government autonomy”. He said:

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I am always open to discussion about how we can further refine how we deliver funding for levelling up, and give local communities more control. And while I believe a competitive process in allocating funding can help drive innovation and ensure rigour in delivery I do recognise that there is a need to reduce the bureaucracy involved in the many repetitive bidding processes which have grown up over time. Which is why I am working with the chancellor to simplify funding allocations and extend local government autonomy. Again, more detail will follow the March budget.

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Gove also said he wanted to give the West Midlands, and Greater Manchester, new powers over affordable homes. He said:

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We are currently in talks with both Greater Manchester and The West Midlands to strengthen the hands of both mayors. We want to devolve even more housing funding, including exploring giving more control of the affordable homes programme to West Midlands and Greater Manchester.

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At the moment London is the only mayoral authority controlling this budget and if we want more of the homes we need in the places where they are needed, regenerating those brownfield sites and driving growth, this devolution is vital and necessary.

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Mayors in the north of England have called on the government to strip TransPennine Express (TPE) of its contract after exclusive figures obtained by the Guardian showed that more than 40% of its trains have been cancelled some days this month.

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Andy Burnham, the mayor of Greater Manchester, said he and other northern mayors had “reached the end of the line” with TPE.

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Speaking at the Convention of the North in Manchester, Burnham said:

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We are in a position where we can’t accept it any more. We can’t allow them to damage our economy day after day. We can’t allow them to damage people’s lives, day after day. There has to come a point where you say: we can’t accept this any more.

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Statistics gathered by Transport for Greater Manchester showed that TPE cancelled 18,587 services last year (from December 2021 to November 2022), 20% of the timetable.

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Figures obtained by the Guardian showed that the service has deteriorated further this year. Three days this month TPE has cancelled more than 40% of services. The nadir was on 18 January, when the cancellation rate was 46%. Excluding strike days, the overall cancellation rate for the month was 23%.

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“If this was happening in the south of England … there would be a national outcry,” said Jamie Driscoll, the mayor of the North of Tyne.

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Tracy Brabin, the mayor of West Yorkshire, said TPE’s failures were costing the north of England £2m a week.

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A spokesperson for TransPennine Express said:

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We know that the service being offered to customers is unacceptable at present and we want to assure our customers throughout the region that we are doing all we can to resolve a number of issues and deliver a train service they can rely on.

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Prolonged disruption has been caused by a combination of ongoing high levels of sickness and an unprecedented training backlog following the pandemic, coupled with increased training demands to support major route and timetable upgrades, together with the withdrawal from overtime working by Aslef drivers which has dramatically reduced our roster flexibility.

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The biggest and most immediate positive impact for customers would be for Aslef to allow drivers to work overtime again. Late last year we were given authority from [the Department for Transport] to make a new overtime offer but this was rejected by Aslef without putting it to their members. The offer remains on the table and we encourage everyone who can influence the situation to work together to improve the situation for all.

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Michael Gove has described Margaret Thatcher as a champion of “active government” in a speech saying levelling up should achieve for the north of England what her government achieved in London’s Docklands.

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In a speech to the Convention of the North conference, Gove, the levelling up secretary, said:

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The experience of successful economic transformation demonstrates that growth is not secured by absent government but by active government.

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A government that plays a strategic role, irrigating the soil for growth as Mrs Thatcher did, specifically in the Docklands.

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When the Thatcher government took office in 1979, London’s docklands were a derelict economic desert.

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The original vision for regeneration of the area, from the Treasury of the time, was simple: just cut taxes and deregulate and a thousand flowers will bloom in the dusty and contaminated soil of the docklands.

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Gove said Thatcher helped set up deeper government intervention through the London Docklands Development Corporation, bringing jobs and housing and transforming that area of the capital.

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Citing the Docklands experience as a model for levelling up, he went on:

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Government created the environment, the private sector created the jobs. London Docklands today is an economic success story.

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One of the most signal successes we owe to Mrs Thatcher’s government, and it is that spirit that animates our levelling up policies: active government.

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The full text of the speech is The Treasury is reviewing its processes amid reports it helped a Russian warlord circumvent UK sanctions to take a British journalist to court, MPs have been told.

Responding to a Labour urgent question about the government’s decision to allow a Russian mercenary leader exemption from sanctions laws to sue a British journalist, James Cartlidge, a Treasury minister, said he would not comment publicly on the case of Yevgeny Prigozhin, but he confirmed a review was under way on its decision-making.

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He told MPs:

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It is a longstanding custom that the government does not comment publicly on individual cases.

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It would not be appropriate to break this custom even in a case as serious as this where there is obviously public interest …

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However, I can confirm, in light of recent cases and related to this question, the Treasury is now considering whether this approach is the right one, and if changes can be made without the Treasury assuming unacceptable legal risk and ensuring that we adhere to the rule of law.

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Cartlidge said the Treasury’s Office of Financial Sanctions Implementation (Ofsi) follows a strict set of rules “for strong constitutional reasons” when granting individuals subject to sanctions permission to bring lawsuits because “everyone has a right to legal representation”.

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He also said that, although Rishi Sunak was chancellor at the time this decision was taken, he played no part in it.

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David Lammy, the shadow foreign secretary who tabled the urgent question, said:

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The government appears to have granted a waiver for a warlord that enabled him to launch a legal attack on a British journalist. This is a perfect example of a Slapp (strategic lawsuit against public participation) lawsuit, designed to silence critics through financial intimidation.

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And Liam Byrne, a former Labour MP, said the case was “outrageous” and that the rules had to change. He said:

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The minister has just confessed to the house that sanctions implementation is out of ministerial control and the result of that was a waiver was issued to a warlord to sue an English journalist in an English court.

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We sanctioned Prigozhin because he was operating ‘a deniable military capability for the Russian state’. Ten months later civil servants under his control signed off £3,500 for business-class flights, £320 for luxury accommodation at the Grand Hotel Europe Belmond, £150 for subsistence and more.

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Let’s be very clear about what the leaked emails from that conversation show. They show that Prigozhin’s lawyers wanted to sue Eliot Higgins and Bellingcat ‘because public rebuttal of the article is one of the reasons for his sanctions designation’.

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He signed off money for a warlord to prosecute an English journalist in an English court to undermine the sanctions regime that he himself is responsible for.

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Here are the main points from the post-PMQs Downing Street lobby briefing.

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n

• The PM’s press secretary defended Rishi Sunak’s decision to tell MPs last week that Nadhim Zahawi had “addressed in full” questions about his tax affairs. The press secretary said that, since then, additional facts had come to light. “The prime minister can only go off what he knows,” she said.

n

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n

• The press secretary declined to say whether Sunak was disappointed that Zahawi did not reveal full details of his tax affairs earlier. Asked if this was the case, she said:

n

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n

I am not going to comment on the PM’s emotional state. A lot of what we understand is via media reports, and some of it quite speculative, that is why it is right that the independent adviser establishes the facts before any further action is taken.

n

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n

• The press secretary refused to say whether Sunak had ever paid a tax penalty. Asked about this, she said:

n

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n

You wouldn’t expect me to get into the prime minister’s tax affairs, they are confidential. The tax affairs of an individual, irrespective of who they are, are confidential.

n

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But she confirmed that Sunak would publish his tax return “in due course”.

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n

• The PM’s spokesperson suggested that that, even if the inquiry finds Zahawi has broken the ministerial code, he might not have to resign. In the past any breach of the code was regarded as a sacking offence. But the spokesperson pointed out that a recent update said that this was no longer a binary matter, and that some breaches could be dealt with by measures short of resignation.

n

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The Conservative MP Nigel Mills told Radio 4’s World at One that Nadhim Zahawi’s position as party chair would remain untenable unless he could give a proper explanation as to why he paid a penalty to HM Revenue and Customs.

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Mills said an explanation was essential, and that it would not be enough for the inquiry by Sir Laurie Magnus, the No 10 ethics adviser, to conclude Zahawi had not broken the ministerial code.

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Mills explained:

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n

I just don’t see an investigation into the ministerial code resolves this because if he is cleared by that, that won’t stop people asking questions about what on earth happened.

n

The guy that is doing the investigation reports to the prime minister and the prime minister makes decisions. It is not a public process.

n

If that finds there was no breach of the ministerial code that is not going to be an end of this matter. I think the only way to resolve this is to make clear what the situation was that gave rise to a significant penalty.

n

If that can be explained we can all move on. If it can’t, then clearly his position won’t be tenable.

n

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One of the reasons why people dislike PMQs is because it’s a format that prioritises insult and abuse. Insults are cruel, and normally trite, and politics should be calm and mature, but life isn’t always like that – and the House of Commons certainly isn’t – and today Keir Starmer dialled up the brutal. For weeks now Labour has been trying to ensure that, when people see Rishi Sunak, they think of him as “weak”. It has probably worked up to a point, but today Starmer deployed a new version of the same theme, suggesting the job of PM might be “just too big” for Sunak.

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Here is the full quote:

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n

We all know why the prime minister was reluctant to ask his party chair questions about family finances and tax avoidance. But his failure to sack him when the whole country can see what’s going on shows how hopelessly weak he is – a prime minister overseeing chaos, overwhelmed at every turn.

n

He can’t say when ambulances will get to heart attack victims again. He can’t say when the prisons system will keep streets safe again. He can’t even deal with tax avoiders in his own cabinet. Is he starting to wonder if this job is just too big for him?

n

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At one level this is just name calling (and Starmer must feel a bit queasy going this low). But Labour is fully entitled to point out that Sunak is an inexperienced PM leading an ungovernable party at the tail-end of what is arguably the least effective administration in the modern era. And “just too big for him” resonates because it’s reminder of Sunak’s diminutive status. As the photographs show, he is not a big guy.

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Most of what gets said at PMQs is forgotten a week later. This is the sort of jibe that people may remember, and so it was a good result for Starmer.

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Sunak’s response was to argue that, when Starmer failed to resign from Jeremy Corbyn’s cabinet, he was the one being weak and unprincipled. It is a reasonable argument. But a) it’s an old one, b) it’s a version of ‘you’re just as bad too’ (never a winning position), and c) Sunak could not encapsulate it in an insult as vivid as Starmer’s.

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Until then, in a PMQs that was always going to be a challenge, Sunak was doing better than might have been expected. When Starmer challenged him about the Nadhim Zahawi inquiry, although he dodged the question about whether Zahawi should have been chancellor, he had a perfectly good response to the “what’s changed from last week?” question. (See 12.13pm.) And a lot of people will agree with the point he made about Starmer being “opportunist”.

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(Incidentally, it is worth noting that there was nothing at all in what Sunak said to suggest that he thinks Zahawi will remain in post after the No 10 inquiry is over.)

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Starmer was probably more effective when he asked about the Zara Aleena case, and the failures with the probation service. His question to Sunak about whether he would agree with Zara’s family about the government having blood on its hand was one of those to which there is no good answer for a politician. Sunak was right to express his sympathy – but then wrong to try to make a party political point.

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Listening to these exchanges, though, a lot of people may conclude that this was just the sort of appalling tragedy that happens occasionally under all governments. People know that A&E wards are in crisis, because most of us know someone who has had personal experience of one in recently weeks. But most of us don’t know someone who has been murdered as a result of a probation disaster. Starmer was arguing that this was not a one-off, and that this was result of successive mismanagement of the service. He is almost certainly right (remember Chris Grayling?), but the public may not yet be convinced.

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Starmer says we all know why Sunak did not want to ask a colleague about tax avoidance. Starmer says failure to sack Zahawi shows “how hopelessly weak he is”. Does he think this job is too big for him?

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Sunak says, when he disagreed with a leader, he resigned. But Starmer served in Jeremy Corbyn’s cabinet and did not resign. That is weak. Starmer has no principles at all, he says.

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PMQs is now less than 20 minutes away. If Nadhim Zahawi is going to resign before it starts, he is leaving it a bit late.

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Here is the list of MPs down to ask a question.

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At the end of last year Sir Mark Rowley, the Metropolitan police commissioner, said that there were around 100 officers in his force who could not be trusted to deal with the public, but who could not be sacked. Asked what he was doing about this, Rowley said the Met was considering “more inventive legal measures” that might enable him to get rid of these people.

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Rowley says the Met is now looking at previous cases where there were complaints about officers. It is considering whether the right decisions were taken.

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He says the press has reported this as 1,000 new cases. But these are not new cases, he says.

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He says the Met is also looking at the vetting process.

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Some officers will have criminal convictions. Those are on record, and they are not always a cause of concern, he says. He says if someone gets a conviction for possession of cannabis at the age of 13, that does not mean they should not be a police officer.

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But the force is now looking at officers who may have been the subject of other complaints.

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He says the Met is constrained by the rules about dismissals. The government is looking at this, and the Met itself is looking at whether it can push the rules further to address this.

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But he says that “lifting the stone and revealing painful truths will not be resolved overnight”.

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This process won’t be rapid, he says. And it will be painful.

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He ends by urging people not to lose heart with Met while this happens.

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UPDATE: Rowley said:

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n

Lifting the stone and revealing painful truths will not be resolved overnight, and I mustn’t pretend it will do, and I hope you understand that that can’t be done.

n

We have to prepare for more painful stories as we confront the issues that we face.

n

We’ve discussed before, the systemic failings that create these problems of these officers who corrupt our integrity, and as we put in more resource, more assertive tactics, as we are more open to people reporting incidents to us from within and from without the organisation, and as we more determinedly take on these cases, it will tackle the problems that we face but it won’t … it won’t be rapid and it will be painful.

n

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Sir Mark Rowley, the Metropolitan police commissioner, opens the meeting with a statement about the David Carrick case.

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He says high standards are at the top of his agenda. He has tens of thousands of great men and women working for him. But there are hundreds of officers who should not be in the force, and Carrick was an example.

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He says the Met has not applied the same sense of ruthlessness to protecting its integrity as it has to catching criminals.

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He apologises to Carrick’s victims, and to all women in London whose trust in the police has been shaken by this.

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Turning to the action he has taken, he says he has increased the number of anti-corruption staff and created a new anti-corruption unit. A new integrity hotline is receiving complaints that are being investigated.

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n

Even though this is a Met appeal, one in three of the calls coming through roughly are for other forces. We’re passing information on as well.

n

Through our challenges, we’re helping the rest of policing confront some issues as well.

n

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Good morning. Rishi Sunak is taking PMQs in about three hours and, as he rehearses how to respond to Keir Starmer’s attack lines, one thing he would appreciate is an interruption from an aide saying that the minister without portfolio in the Cabinet Office (Nadhim Zahawi) is on the line to offer his resignation. If Zahawi were to quit this morning, PMQs would be a lot easier.

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That does not mean it will happen. Sunak has said that he wants Zahawi’s fate to be decided by the ethics adviser’s inquiry, and Zahawi has said that he has done nothing wrong and intends to stay in post. But on the Today programme a few minutes ago David Gauke, the former Tory cabinet minister, said it was “hard to see how this doesn’t ultimately end in [Zahawi’s] resignation”. He also said, if Zahawi was still in post at 12pm, PMQs was going to be “very uncomfortable” for the prime minister.

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Sunak may have thought that the decision to order an inquiry would close down debate about Zahawi until the findings were in. But that has not happened, and increasingly Zahawi is being criticised, not just for having to pay a penalty to HM Revenue and Customs for not paying tax owed on time, but for threatening journalists with libel action last summer when they started making inquiries. Last night Lord Evans, the chair of the committee on standards in public life, was particularly critical of this in an interview with the BBC’s PM programme. He said:

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n

If you’re trying to close down a legitimate public debate, I don’t think that lives up to the standards Lord Nolan laid down and which the government has committed itself to. Accountability [and] openness are things which the government says that it wants to be characterising its own behaviour, so that I think speaks for itself …

n

The sort of attempts, apparent legal attempts, to suppress this story … I don’t think that does live up to the sort of standards that the public would rightly expect.

n

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On the Today programme this morning Gauke, a former justice secretary, also criticised Zahawi on this point. He said:

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n

What we now know is that what Nadhim Zahawi was saying in the summer is very hard, if not impossible, to reconcile with the information that he has paid a penalty in respect of his [tax] arrangements …

n

It appears that he was threatening to sue people for libel for essentially telling the truth, for essentially setting out analysis of what happened that seems to stand up to reality.

n

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Here is the agenda for the day.

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10am: Sir Mark Rowley, the Metropolitan police commissioner, takes questions from the London assembly’s police and crime committee about the David Carrick case.

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12pm: Rishi Sunak faces Keir Starmer at PMQs.

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12pm: Michael Gove, the levelling up secretary, speaks at the Convention of the North conference. Lisa Nandy, his Labour shadow, is speaking at 2.50pm.

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2.30pm: Robert Jenrick, the immigration minister, gives evidence to the women and equalities committee about equality in the asylum process.

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I’ll try to monitor the comments below the line (BTL) but it is impossible to read them all. If you have a direct question, do include “Andrew” in it somewhere and I’m more likely to find it. I do try to answer questions, and if they are of general interest I will post the question and reply above the line (ATL), although I can’t promise to do this for everyone.

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If you want to attract my attention quickly, it is probably better to use Twitter. I’m on @AndrewSparrow.

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Alternatively, you can email me at [email protected]

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