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BIRMINGHAM, ENGLAND – AUGUST 23: Former Chancellor to the Exchequer and Conservative leadership hopeful Rishi Sunak speaks during the Conservative leadership hustings at the NEC on August 23, 2022 in Birmingham, England. Foreign Secretary, Liz Truss and former Chancellor Rishi Sunak are vying to become the new leader of the Conservative Party and the UK’s next Prime Minister. (Photo by Anthony Devlin/Getty Images)
Sunak’s problem is that he’s right. The voters aren’t idiots

Sunak’s problem is that he’s right. The voters aren’t idiots

BIRMINGHAM, ENGLAND – AUGUST 23: Former Chancellor to the Exchequer and Conservative leadership hopeful Rishi Sunak speaks during the Conservative leadership hustings at the NEC on August 23, 2022 in Birmingham, England. Foreign Secretary, Liz Truss and former Chancellor Rishi Sunak are vying to become the new leader of the Conservative Party and the UK’s next Prime Minister. (Photo by Anthony Devlin/Getty Images)

The controversies over Nadhim Zahawi’s tax affairs and Richard Sharp’s role in securing a loan for Boris Johnson will entrench the public’s impression of the Conservatives as fatally out of touch

What was your favourite bit of Boris Johnson’s premiership? Mine is yet to come, and it will take the form of a book. Last week, HarperCollins announced that, for an undisclosed but undoubtedly hefty advance, it had snapped up Johnson’s story of his years in Number 10, predicting that it would be “a prime ministerial memoir like no other”.

In this instance, the publisher’s hype is likely to be justified. Though a truly terrible prime minister, Johnson is indisputably one of the most gifted political commentators of his generation, an engaging and powerful writer, who manages to combine a demotic tone – “folks”, “friends” – with erudition and polemical force. His hugely popular columns in the Daily Telegraph often read like the thoughts of Bertie Wooster on the Westminster saga, refracted through the prism of Homeric myth.

More than any other person I have ever encountered, Johnson also personifies the all-important difference between artful self-deprecation – “gosh”, “cripes”, “blithering idiot” – and genuine contrition. So expect plenty of jokes at his own expense, but little by way of meaningful apology for his catastrophic performance as PM.

I am especially interested to see how, if at all, he seeks to justify what he would doubtless describe as just another “scrape”: in this case, the disclosure in yesterday’s Sunday Times that an £800,000 credit facility extended to him – by whom, it has yet to be revealed – was underwritten by Sam Blyth, a Canadian businessman and distant relative of Johnson, after an approach to Downing Street by Blyth’s friend, the former banker, Richard Sharp in December 2020. Curiously, Sharp’s initial point of contact was Simon Case, the cabinet secretary.

Before the financial arrangement was finalised, Sharp, Blyth and the PM enjoyed a cosy chop suey dinner at Chequers. By an astonishing coincidence, it was announced on 6 January 2021 that Sharp had been selected by the Johnson government as the new BBC chairman. (It is also worth mentioning that Blyth had been on the list of contenders for the role of chief executive of the British Council.)

Andy Warhol once declared that “one of my favourite things to say” is “so what.” And it was with these very two words that Johnson’s spokesman responded when challenged by the Sunday Times to explain the Chequers meal: a perfect encapsulation of the former PM’s ingrained amorality and indifference to ethical accountability. “So what? Big deal” – this has always been his real answer to those who have dared to question his indifference to the rules and, in the case of the Downing Street pandemic parties, the law.

The BBC application rules are quite clear: “You cannot be considered for a public appointment if you fail to declare any conflict of interest.” Sharp, for his part, insists that there was no conflict of interest involved because he “simply connected, at his request, Mr Blyth with the cabinet secretary”. If ever there was one, this is a distinction without a difference. When cross-examined on 14 January 2021 by the Commons Digital, Culture, Media and Sport Select Committee – and asked specifically about the closeness of his relationship with senior Conservatives – he conspicuously failed to mention his part in brokering this particular deal.

Though the MPs’ code of conduct is quite explicit that members must register all “loans and credit arrangements”, Johnson did not make public the credit lifeline that got him out a serious financial hole or the origins of the arrangement. 

Consult the remarkable Westminster Accounts tool developed by Tortoise in conjunction with Sky News, and you will see that the former PM already tops the table with donations, earnings, gifts and other benefits worth approximately £2.6 million since 19 December 2019. He is not bashful about the £1 million his office received on 16 December from the Thai-based businessman, Christopher Harborne, or the lucrative speaker fees he has attracted since leaving office. But, concerning what Robert Ludlum would have called The Blyth-Sharp Arrangement, he has been intriguingly silent until forced to issue a statement this weekend.

If, as Johnson and Sharp insist, everything was in order, then why did Case reportedly tell the then PM to cease his communication with Sharp? And why did the Cabinet Office Propriety and Ethics team issue the same advice to Johnson?

Across Whitehall, Case’s senior colleagues are baffled and in some cases furious. In the words of one senior official: “In all my decades, I have never known a cabinet secretary acting as financial go-between for a prime minister. It’s beyond belief.” 

The mood in the BBC newsroom was no better yesterday. Having been lectured by the corporation’s director-general, Tim Davie, on the need for strict political impartiality, news executives and reporters are decidedly unamused to discover that the Beeb’s chair is also, as a veteran presenter puts it, “Boris’s bloody bank manager”. It is hard to see how Sharp’s position is tenable. But – this being the Age of Impunity – it would be foolish to predict that he will do the honourable thing and put the reputation of the world’s greatest public service broadcaster first.

You might imagine that Rishi Sunak – fearful of yet another bid by Johnson to return to Number 10 after what are expected to be terrible results for the Tories in the May local elections – would be delighted by the latest discomfiture of his swaggy-topped nemesis. But the politics of this controversy are rather more nuanced.

For a start, Sharp was the prime minister’s boss at Goldman Sachs and a Covid economic adviser to him when he was chancellor. More to the point, Sunak himself is no stranger to financial controversy – so much so that he almost left frontline politics altogether last year after the storm over the non-dom status of his wife Akshata Murty and his own retention of a US green card (for more on this woeful episode check out my Slow Newcast from last May).

In April, Sunak was cleared of all impropriety by Lord Geidt, the then independent adviser on ministers’ interests. But the impression has stuck that the PM has a blind spot when it comes to personal wealth. In this respect, he has not been helped by the Conservative party chairman, Nadhim Zahawi, who faces a very difficult week over revelations about his own tax arrangements.

On Saturday, after repeatedly denying all claims to the contrary and sending some fairly menacing legal communications to warn off those investigating his finances, Zahawi finally conceded that he had reached a tax settlement with HM Revenue and Customs (HMRC) following a “careless and not deliberate error” over shares and dividends in YouGov, the polling company he co-founded in 2000. The exact figure paid to HMRC has yet to be confirmed, but nobody disputes that the Tory chairman had to pay several million pounds, or that the Cabinet Office raised a red flag over his tax affairs last year.

His predicament is further complicated by the fact that, between 5 July and 6 September, he was Chancellor of the Exchequer and therefore statutorily responsible for the very tax authority with whom he was negotiating a settlement. It would be striking indeed if, as he says, a businessman of Zahawi’s acuity did make an error of this scale – as if he had been, so to speak, “ambushed” by dividends.

The timing could not be worse, either. The rest of the nation’s taxpayers have only eight days to go until the deadline for payments on account if they are self-employed, and for the filing of digital tax returns. 

According to the Office for Budget Responsibility, Jeremy Hunt’s Autumn Statement means that the tax burden will rise to “its highest sustained level since the Second World War”. In Morecambe on Thursday, the PM made the case once again for fiscal conservatism: “I’m a Conservative, I want to cut your taxes … I wish I could do that tomorrow, quite frankly, but the reason we can’t is because of all the reasons you know. You’re not idiots, you know what’s happened.”

I happen to agree with Sunak that – especially after the brief but comprehensive calamity that was Liz Truss’s premiership – it is essential to put economic stability first. But, alas for the PM, the voters do not seem to be buying what he’s selling. In a poll by Savanta for yesterday’s Sunday Telegraph, 49 percent said that taxation was now too high – and, remarkably, the same percentage now trust Labour more than the Tories to lower the burden (compared to only 23 percent who still believe in the Conservatives as the tax-cutting party). 

As Sunak and Hunt prepare for the latter’s Budget on 15 March, a new “Trussite” gang of Tory MPs – the Conservative Growth Group – is revving up, around 25 of them having gathered last Wednesday in the office of Simon Clarke, the former Communities Secretary. Though he notionally presides over a working majority of 67, the remnants of Johnson’s 2019 general election triumph, Sunak is in fact confronted with what amounts to a hung Parliament, and a Tory parliamentary party riven by faction, ideological division over the economy, culture wars, Brexit, and the ambitions of those readying themselves to take the place of a leader whom they perceive as weak and intrinsically incapable of stamping his authority upon the Conservative movement.

The impression of a government that is rudderless and lacking in sure captaincy was certainly entrenched by the dismal performance of James Cleverly on yesterday’s media round. Faced with two burgeoning scandals – the Johnson-Sharp furore and Zahawi’s personal finances – the Foreign Secretary’s pithy answers amounted to: search me, guv. 

In response to questions posed by Sky’s Sophy Ridge, he said that he was “not an investigative journalist, and it’s not my functional role to investigate my colleagues’ tax affairs”. This is true; but it certainly was his “functional role” as the delegated spokesman for His Majesty’s Government to be well-briefed on the main topics of the day.

Cleverly, it seems, thought otherwise. Interviewed by the BBC’s Laura Kuenssberg, he revealed that he wasn’t up to speed on all the latest stories, as he had been “having a bit of a rest and doing some shopping on Saturday”. To adapt the maxim made famous by Watergate, the question will henceforth be: what did James Cleverly not know, and when did he not know it?

Individual interviews are soon forgotten. What sticks is the impression of moral indifference and structural indolence. It is not yet five months since Johnson was forced from office by the “ethical crash” of partygate and his mishandling of the allegations of sexual misconduct against the former deputy chief whip, Chris Pincher.

Yet whatever happened to Sunak’s promise outside Number Ten to lead a government of “integrity, professionalism and accountability at every level”? Already, Labour has stormed in with demands for a series of inquiries. Lucy Powell, the Shadow Culture Secretary, has written to William Shawcross the Commissioner for Public Appointments asking him to investigate the appointment of Sharp as BBC chair. Anneliese Dodds, the Labour chair, has demanded an inquiry into the Zahawi affair by the newly installed parliamentary commissioner for standards, Daniel Greenberg. Sir Laurie Magnus, appointed last month as the new independent adviser following Geidt’s exasperated resignation in June, will be under pressure to prove that his role is more than a sinecure (though, absurdly, he cannot initiate investigations himself).

“It’s not the sex, it’s the money””: so Willie Whitelaw, Margaret Thatcher’s long-serving deputy, used to say of his party’s moral vulnerabilities. If that was true in the 1980s, it is doubly so in the 2020s. The government’s sluggish response to accusations of financial impropriety is not only ethically indefensible; it is electorally crazy. 

The cost-of-living crisis is hitting the least well-off hardest. But economic insecurity is also afflicting middle-class voters upon whom the Tories are depending if they are to avoid a wipe out in the next general election. Every day, the business pages report another round of white-collar redundancies: Goldman Sachs, Google, Twitter, Amazon, Microsoft. 

The traditional Conservative supporter is not thinking about aspiration right now. He or she is thinking about making ends meet. In this context, the spectacle of the most senior Tories apparently playing fast and loose with the rules for their own financial convenience is politically disastrous. It speaks not only of shoddy ethics but of detachment and sleepiness at a time of national urgency.

“Sleaze” allegations, broadly understood, are always most dangerous when they mesh with a broader sense that the government of the day lacks purpose, is past its sell-by date, and is generally jaded. 

This week, Sunak is gathering his Cabinet colleagues at Chequers to clarify what he sees as the government’s collective mission. He will have his work cut out; not only because the unity that he has brokered at the very apex of his regime is so desperately fragile, but because, whatever he and his senior colleagues agree, the public now occupies a position of deep, perhaps unbreakable scepticism when it comes to the party that has been in office for 13 years. 

The real problem is that Sunak is quite right. The voters really aren’t idiots.