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.
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.”