Triple headache for Sunak as he prepares for Chequers meeting
Nadhim Zahawi: Sunak orders investigation amid tax questions
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The Prime Minister is expected to deliver a rallying cry to his Cabinet as he battles to revive the economy, navigate the politically toxic probe into Nadhim Zahawi’s tax affairs and find a solution to the wave of strikes crippling the UK.
Mr Zahawi, the Conservative Party Chairman, is expected to attend the away day in the Buckinghamshire countryside where the PM will also begin mapping a course toward the 2024 General Election.
Mr Sunak and Chancellor Jeremy Hunt are both facing pressure to deliver a growth plan after the national debt hit £2.5trillion and growth forecasts were downgraded.
It is understood that the Office for Budget Responsibility privately contacted the Treasury to tell Mr Hunt that it had overestimated the prospects for economic growth and that it plans to downgrade forecasts.
This restricts the Chancellor’s options and wipes out £9.5 billion in headroom from his autumn budget.
Separate figures showed that strikes, surging interest rates and cost of living pressures were pushing the nation further toward a recession.
Mr Hunt insists the debt report showed the need for him to keep to “tough” plans to help balance the Treasury’s books.
But with the tax burden on course to reach its highest level since the Second World War, others argue that cuts are needed now.
Conservative MP Sir John Redwood said: “You have got to have tax cuts that make it easier to run businesses and make it more worthwhile to make investments.”
And former party leader Sir Iain Duncan Smith added: “We need very soon to be setting out a plan for growth, including tax cuts.”
With Ministers decamping to Chequers the Government continues to face questions about the tax affairs of Mr Zahawi.
The Tory Party chair is subject to an inquiry, into declarations about his tax affairs, by the new independent adviser on ministers’ interests, Sir Laurie Magnus.
It comes after Mr Zahawi resolved a multimillion-pound tax dispute with HMRC by paying a penalty – reportedly around 30 percent of a £5million settlement – while serving as chancellor under former prime minister Boris Johnson.
Mr Zahawi said the error in his tax affairs was accepted by HMRC as having been “careless and not deliberate”.
After Mr Sunak entered No 10 in October, he made Mr Zahawi chairman and minister without portfolio, allowing him to attend Cabinet.
Downing Street said Thursday’s away day would focus on the Prime Minister’s political priorities.
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”.
Mr Sunak set out his five pledges in a new year speech, which included halving inflation by the end of the year and bringing down NHS waiting lists.
A political Cabinet, where ministers discuss political matters without officials present, will also be held, although it was unclear whether Mr Zahawi in his role as Tory chairman would be giving a presentation to colleagues ahead of the May local elections.
Opposition parties branded it a “hideaway day”.
Meanwhile, new polling shows that half of voters say they would vote for Labour in a general election.
People Polling for GB News has Labour on 50 percent of the national vote with the Conservative Party at 21 percent and the Liberal Democrats on eight percent.
“The Conservative Party remains on record lows”, said Professor Matt Goodwin, “while Labour is still heading toward a majority government. Rishi Sunak and his team will be hoping that falling inflation and energy prices will begin to make things easier but as things stand, today, they remain on course for a total wipeout at the next general election, a defeat potentially worse than what very nearly destroyed the Conservative Party in 1997”.
Voters have also become more negative towards Mr Sunak according to the survey while Sir Keir Starmer and the Labour Party are the most trusted on the economy.
“This is yet another finding that should be ringing loud alarm bells in Conservative HQ”, Professor Goodwin added.
“One very big problem for the Conservatives is they have now lost ownership of the economy, traditionally their ace card in British politics.”
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