Share this content
Nadhim Zahawi
NadhimZahawi_Treasury_Flickr
Nadhim Zahawi

PM resigns but Zahawi remains in post as Chancellor

by

Conservative MPs with accounting credentials are already circling Number 10.

7th Jul 2022
Share this content

7/7/2022 12.40pm  Boris Johnson has now resigned as Conservative leader but says he will continue as Prime Minister until a new leader is in place.

A new Cabinet has been announced, with Nadhim Zahawi remaining in post as the newly appointed Chancellor.

Speaking outside Downing Street this afternoon Johnson said that the process of choosing a new leader should begin now and the timetable will be announced next week. 

Johnson said: “In the last few days, I tried to persuade my colleagues that it would be eccentric to change governments, when we're delivering so much, when we have such a vast mandate and when we're actually only a handful of points behind in the polls, even in mid term after quite a few months of pretty relentless sledging and when the economic scene is so difficult domestically and internationally. 

“I regret not being successful in those arguments, and of course, it's painful not to be able to see through so many ideas and projects myself. 

“But as we've seen, at Westminster the herd instinct is powerful when the herd moves, it moves and my friends in politics, no one is remotely indispensable. And our brilliant Darwinian system will produce another leader, equally committed to taking this country forward through tough times.”

With Johnson stepping down, Conservative MPs with accounting credentials are already circling Number 10.  Qualified management accountant Liz Truss is returning early from a G20 meeting to reportedly launch her leadership campaign. Former Chancellors Rishi Sunak and Sajid Javid and current Chancellor Nadhim Zahawi are also said to be mulling over their next steps and considering their leadership options.

***

9.15am: Just 30 minutes after Nadhim Zahawi publicly told the Prime Minister to "do the right thing and go now", it is being reported that the Prime Minister has agreed to resign today.

It is expected that he will remain Prime Minister whilst a Conservative leadership race takes place this summer, with a new Prime Minister in place by the autumn.

Less than a day in the new job as Chancellor, Zahawi said in a letter posted on  Twitter: "The country deserves a government that is not only stable, but which acts with integrity. Prime Minister, you know in your heart what the right thing to do is, and go now."

Reports had suggested that the Prime Minister was hoping to unveil a new economic policy with the Chancellor in the coming days and tax cuts were widely expected to be announced.

Last night The Times exclusively revealed that Zahawi has been 'secretly working' with close allies of Sir Lynton Crosby on a Tory leadership bid for months.

***

6/7/22 5.20pm According to news sources, the new Chancellor has joined a delegation of ministers in telling the Prime Minister to resign.  

***

6/7/22: Treasury minister John Glenn also handed in his resignation, citing the Prime Minister's "poor judgement". 

***

Former education secretary Nadhim Zahawi has been given the keys to Number 11 following Rishi Sunak’s shock resignation from his post, which threw Boris Johnson’s political future into jeopardy. 

Sunak resigned as Chancellor of the Exchequer, posting his letter of resignation on Twitter, just after 6pm Tuesday evening.

He posted an excerpt from his letter which said: “The public rightly expect government to be conducted properly, competently and seriously. 

“I recognise this may be my last ministerial job, but I believe these standards are worth fighting for and that is why I am resigning.”

He shared an image of his letter to the Prime Minister in full below the post.

 

The ex-Chancellor told the Prime Minister: “our approaches are fundamentally too different”, adding, “I am sad to be leaving government but I have reluctantly come to the conclusion that we cannot continue like this.”

Sunak’s resignation makes way for Zahawi to become Boris Johnson’s third Chancellor. Zahawi has held a number of ministerial posts including his recent role as education secretary and prior to that as the vaccines deployment minister. 

Zahawi inherits a cost of living crisis and is likely to face pressure from the Prime Minister to cut taxes in order to save his political career.  

Sunak’s resignation

Sunak’s resignation followed hot on the heels of health secretary Sajid Javid, who also told the PM he had lost confidence in his leadership.

Sunak, the MP for Richmond in Yorkshire, does have form in following Javid’s footsteps. He took over the position of Chancellor from Javid in 2020, after his shock exit just four weeks before he had been due to deliver his first Budget.

The pair quit soon after Boris Johnson admitted that he should not have appointed MP Chris Pincher as deputy chief whip in February, following a row over the handling of misconduct claims against him.

Sunak’s legacy

Sunak’s exit puts a full stop on a tenure in Number 11 that included the furlough scheme, Covid loans and a non dom scandal involving his wife. 

Sunak delivered his first Budget in March 2020, before having to rip it up weeks later when the Covid pandemic forced the government to lock down the country and announce a number of support schemes. 

Tags:

Replies (67)

Please login or register to join the discussion.

avatar
By MCV71
05th Jul 2022 19:16

A Chancellor quitting would usually mean a PM walking the plank soon after. But I don't see it happening with this narcissistic liar in charge

Thanks (7)
Replying to MCV71:
Quack
By Constantly Confused
08th Jul 2022 07:46

MCV71 wrote:

A Chancellor quitting would usually mean a PM walking the plank soon after. But I don't see it happening with this narcissistic liar in charge

#PostsThatDidn'tAgeWell

:)

Thanks (2)
avatar
By Trethi Teg
05th Jul 2022 19:36

Excellent. Perhaps the next one will remember that he is at least prentending to be a Conservative and start cutting taxes. Hopefully Sunak will not smarm his way to PM. That really would be the end.

Thanks (15)
Replying to Trethi Teg:
avatar
By DavidWinter
06th Jul 2022 10:14

They're only interested in cutting taxes for big companies i.e. the ones they get backhanders from. The welfare of small companies and workers are of no interest to them.

Thanks (4)
avatar
By GHarr497688
05th Jul 2022 20:08

SEISS and Furlough give aways are about to cause us some real issues for us all I would guess so Sunak has got out before he gets thrown out by the electorate. Giving money to people who didn't need it is an Economic crime that we will all pay for.

Thanks (16)
Replying to GHarr497688:
avatar
By MCV71
05th Jul 2022 21:30

As we are all now paying with the increase in revenues from fuel duty. Helps the government get back some of the cash bonanza

Thanks (4)
Replying to MCV71:
avatar
By GHarr497688
05th Jul 2022 21:56

I have been in Accountancy for 40 plus years and I have never seen such a free for all.Whilst I agree the Country was in a real mess to just give away free money with no later redress was madness. No one was spending money as the Country was closed so why not just give a low threshold to cover basic food costs and put utility /mortgage/ council tax bills on hold. The Public not only saved money but where given extra money with furlough /SEISS and BB Loans and for what purpose.

Thanks (7)
Replying to GHarr497688:
avatar
By Paul Crowley
05th Jul 2022 22:30

So many of my self-employed clients ended up with the best overall combined income for years.

Thanks (19)
Replying to Paul Crowley:
avatar
By GHarr497688
05th Jul 2022 23:08

same for me . Best of it was that the clients had done nothing wrong so that led me to believe Government Policy/Planning was wrong all through. What really makes me mad they expected the Accountants to deliver the service , sending emails out late Friday to inform clients over the weekend. I get even more annoyed when HMRC then say we are not privy to Grant information but are expected to deliver MTD ITSA - they then infer Taxpayers can do their own Taxes. Maybe the Accountants should strike and then see what HMRC say about us all.

Thanks (12)
Replying to Paul Crowley:
avatar
By Winnie Wiggleroom
06th Jul 2022 08:17

Paul Crowley wrote:

So many of my self-employed clients ended up with the best overall combined income for years.

Same here, in some cases earnings were 3 times higher than usual, also followed by a huge amount of clients remortgaging taking advantage of the higher numbers

Thanks (5)
Replying to Paul Crowley:
avatar
By Catherine Newman
06th Jul 2022 09:34

And mine. It took them into higher rates and HICBC.

Thanks (4)
Replying to Catherine Newman:
avatar
By 4b4
06th Jul 2022 10:18

Catherine Newman wrote:

And mine. It took them into higher rates and HICBC.

And mine!
Shocking!
Especially shocking for the clients whose partners had made the CB claims

Thanks (4)
Replying to Paul Crowley:
avatar
By Catherine Newman
06th Jul 2022 10:26

Duplicate removed.

The problem was those with good profits got more and those who needed it most got s*d all. It was designed the wrong way.

Thanks (3)
Replying to MCV71:
RLI
By lionofludesch
06th Jul 2022 17:37

MCV71 wrote:

As we are all now paying with the increase in revenues from fuel duty. Helps the government get back some of the cash bonanza

Fuel duty's gone down, has it not?

VAT on fuel is where the Government are currently coining it in.

Thanks (1)
Replying to GHarr497688:
avatar
By Roderick Wright
06th Jul 2022 10:02

Such a short memory!! For many many workers, of all ages, men and women, across the whole country, the lockdown in March 2020 was catastrophic in terms of earning anything. That the Government and the much ( usually correctly) maligned HMRC was able to respond as quickly as they did was nothing but praiseworthy, and an economic lifeline for very many. The COVID loans were to Companies excluded from the original assistance, who were, ( where in genuine need,) just as badly affected, also by the additional delay. Yes hindsight, and maybe common sense says other checks, simple in nature, should have been put in place, but given the panic and real need at the time, some generosity of hindsight is absolutely needed.

Thanks (8)
Replying to Roderick Wright:
By ireallyshouldknowthisbut
06th Jul 2022 10:40

@Roderick, within minutes of the loan announcement, there were posts on here staying he loans were insane due to the lack of skin in the game of the banks and lack of checks

Indeed the banking industry is on record as having challenged it and been overruled by the Treasury.

Its not about hindsight, its about a lack of basic understanding of what they were doing at the time shining a bright light on their incompetence. Any reasonable person would have ensure basic checks arose, such as sight of the prior years company accounts for the bounce back loans to check turnover.

Thanks (6)
Replying to ireallyshouldknowthisbut:
avatar
By Roderick Wright
06th Jul 2022 11:30

Part of me understands your point perfectly; the problem is bandwidth. The Treasury would have had two instantaneous reactions, firstly along the lines of 'We rush out what they were clamoring for, and instantly they are unsatisfied and want more/variations/adjustments etc'. Secondly, 'we are coping with a major crisis, other things need our very urgent attention like eg, how do we continue to fund the money already promised for the first grants and continuing Gov expenditure....' We are looking, as always, at too narrow a focus, compared to everything else that was going on.
I agree the scheme was too hastily cobbled together, but it smacks to me of a buck passed downwards, in partial extremis, to a lower level civil servant who simply did what was asked of them, rather than ... think through for a moment. From personal experience I know of several clients who were soiling underwear wondering what they could do, how to keep going, moaning it's all right for everyone else but I also have staff, suppliers, clients I need to continue serving....
NEXT TIME... and it WILL happen again, perhaps the Accountancy bodies instead of just screaming for help, might come up with oven-ready solutions with reasoned bases for their suggestions???

Thanks (4)
Replying to Roderick Wright:
avatar
By johnjenkins
06th Jul 2022 13:53

Had client, fruit and veg, Covent Garden 30 years, claimed all the grants and furlough yet still ended up in Liquidation (no grant money was used personally). So that is the other end of the scale.

Thanks (4)
Replying to Roderick Wright:
avatar
By Paul Crowley
06th Jul 2022 17:51

Would you really want the accountancy bodies standing 'in loco governmentis'?

Thanks (3)
Replying to ireallyshouldknowthisbut:
avatar
By Paul Crowley
06th Jul 2022 17:47

+1
BB Loans to companies were a fraudsters charter from day 1.
Banks doing checks were overuled by HM Gov and instructed to get loans out.

SEISS rules on claimant were such that NOBODY is going to fail the test for entitlment despite trade being uninterrupted
All controlled by the last three tax returns submitted

Thanks (1)
Replying to Roderick Wright:
avatar
By GHarr497688
06th Jul 2022 12:45

The point is that Government should have systems in place for such an event i.e what lessons where learnt from the AIDS's crisis back in the 1980's. You are saying Government acted well as a result of the panic the Pandemic brought on us all - what I say is we employ Government to be ready for the "might be" , they were not ready and so the system was ludicrous were many gained Taxpayers money when they did not need it. I am not saying that many innocent people needed funding but the country was closed , no one could spend so why was so much money frittered away - thats the point.

Thanks (3)
Replying to GHarr497688:
avatar
By Dib
06th Jul 2022 13:28

You must have a better memory than me of the AIDS crisis - I don't remember one, at least anything remotely resembling the Covid-19 situation - lock downs, NHS under extreme pressure, mass injections using a number of putative vaccines etc. The only things I recall they had in common was no cure for either when first identified and vast advertising campaigns from the government of the day.

Thanks (1)
Replying to Dib:
avatar
By GHarr497688
06th Jul 2022 17:37

I do indeed remember it - take a look at the "lost tapes" on TV . It was a disease that Government thought would multiply so fast that it would have serious implications on the population of the UK. Because it was classed as a "queer" disease it was ignored until panic set in which caused the campaign on TV. I am sure if it had affected more of the "none queer" population a cure would of had to be found . Sadly today no cure has been found just a treatment. My point was that a disease that could not be controlled was in the general population ( not in the same way as Covid as it was more sexually transmitted) BUT it should have shown Government that a Pandemic might happen ( as they had in Asia ) and so a proper measured plan could have been put into place. What actually happened was a bunch of lieing loonies panicked - came out and said we will "look after you all" bowed to public pressure and gave money out willy nilly when no one was actually spending not to mention letting 1000's of people into care homes killing people (including my Father in Law) . What choice did they have but to vaccinate everyone in the end - does that mean that every other error of judgement is ignored ?

Thanks (0)
Replying to GHarr497688:
avatar
By Roderick Wright
06th Jul 2022 17:59

The two diseases are not, I would suggest, comparable. AIDS still is primarily, but not wholly, a sexually transmitted disease, whereas COVID passes easily in virtually all circumstances. It appears you are blaming HMG for not taking recognition of the earlier scares... incorrectly if this is what you are suggesting. Unfortunately for GB, the officials took plans for influenza and used those as a basis. Evidence, which if a certain far eastern country had been properly reporting ( which by every metric IT WAS NOT!), would have shown this to be quite ineffective and incorrect.
What REALLY takes my biscuit is your statement that "no one was actually spending" With respect, that is b*llocks. What about food, light and heat, rent, mortgages and credit card debt, ALL must come from cash flows....
Discretionary spending - restaurants, theatre, pop concerts, days out, yes that ceased but that is only an element of the circulation of money.
Your point about care homes is perfectly valid, and one would hope at least that the promised enquiry establishes how this catastrophic mistake came to be made..... the panicking behind it is more easy to comprehend.
More than that I think should await full disclosure of what happened... if we ever get it!

Thanks (2)
Replying to Roderick Wright:
boxfile
By spilly
07th Jul 2022 15:08

My local hospitals were paying up to £1k per person for care homes to take the elderly patients being discharged early. The money was supposed to help cover the extra costs of preparing the homes and caring for them in isolation. Needless to say that Covid then ripped through those care homes, whereas those that hadn’t had the space to take anyone in stayed relatively safe.

Thanks (0)
Replying to Roderick Wright:
avatar
By GHarr497688
07th Jul 2022 19:50

I stand by what I say SIR . When I say spending of course I met on extras meaning a basic allowance could be given for essential, mortgage loans etc would be placed on hold until Government could appraise the situation. With the HIV the fact is a virus could spread from person to person by whatever means so it showed this sort of thing might happen and so a plan should be in place i.e. IT systems and funding those with no income . Just giving funds to those who didn't need them is mad by anyone standards. That no doubt why the Government is in melt down.

Thanks (0)
avatar
By Paul Crowley
05th Jul 2022 21:22

Create the mess and leave it for others to get their hands dirty picking up the poo.
Dishy Rishi? More like sh..y Rishi

I guess the takeover plan starts now

Thanks (6)
Replying to Paul Crowley:
avatar
By MCV71
05th Jul 2022 21:29

Seems to be a common Tory trait. Cameron couldn't run away fast enough after the Brexit vote

Thanks (7)
Replying to Paul Crowley:
avatar
By GHarr497688
05th Jul 2022 21:58

100% true....

Thanks (3)
avatar
By Paul Crowley
05th Jul 2022 22:44

Updated article
I thought Liz Truss was in with a shout

The leavers pretended that the resignations were not co-ordinated, per BBC news
Who are the ones caught with pants on fire now?

Trade envoy to Morocco? That's the one that shocked me.
Did not know we had one.

My son suggested that the leavers should have resigned one a day to have real continuing impact.
The cabinet refilled in no time..
All at once is an open cabal.

Thanks (2)
Replying to Paul Crowley:
By ireallyshouldknowthisbut
06th Jul 2022 09:45

Liz Truss? Sheesh. How low have we sunk here. She only looks vaguely OK next to the combined braincell of Raab and Dorries.

Thanks (4)
Replying to ireallyshouldknowthisbut:
avatar
By Paul Crowley
06th Jul 2022 10:20

Chancellor is the headline act.
Best to have an act most people have heard of.
Civil servants do the thinking, planning, and give a small range of options that the actors supposedly choose from.

Thanks (2)
Replying to ireallyshouldknowthisbut:
avatar
By johnjenkins
06th Jul 2022 15:07

Doris, Doris, who the .... is Doris?

Thanks (1)
Replying to Paul Crowley:
avatar
By Red1960
07th Jul 2022 12:19

Liz Truss I had to laugh at that.

I wouldn't trust her to clean a toilet without supervision.

Thanks (0)
Replying to Red1960:
avatar
By Paul Crowley
07th Jul 2022 13:59

But at least I would recognise her if she went out shopping

Thanks (0)
Head of woman
By Rebecca Cave
06th Jul 2022 08:33

Headline from FT on 27 Jan 2022:
Nadhim Zahawi was ‘instrumental’ in securing Greensill loans approval, said Gupta
https://www.ft.com/content/fe8c33e7-a846-4f98-ab33-68b580c6896f

Thanks (6)
Replying to Rebecca Cave:
By ireallyshouldknowthisbut
06th Jul 2022 09:04

@Rebecca, yup he is just another one of the "very rich boys" carrying on the noble Tory tradition of enriching their donors and cronies through tax breaks, soft loans and highly dodgy contracts.

Expect more of the same whilst the Tory press lap up any crumbs for Tory voters fixated on minor tax cuts and happy to walk past the foodbanks and blaming the poor for being poor.

Thanks (9)
Replying to Rebecca Cave:
avatar
By Paul Crowley
06th Jul 2022 09:28

Just the person to sort out the Covid loan issues.

Thanks (3)
avatar
By Justin Bryant
06th Jul 2022 09:32

Nadhim Zahawi is unquestionably a "yes man" and will likely do as he's told by BJ (a reversal of RS's CT rise would actually be good overall in my view). RS was probably the worst Chancellor in history, having presided over a Treasury that wasted a good £100bn+ unnecessarily during Covid as stated by others above and that added quite a few % points to the inflation rate. He was also disembling re his non-dom and GC status.

I agree with the comments here: https://www.accountingweb.co.uk/any-answers/will-mtd-go

At least you all now know (if you didn't already) that you were comprehensively lied to by BJ re Brexit.

Thanks (1)
Replying to Justin Bryant:
avatar
By Red1960
07th Jul 2022 12:22

Let's just say that his financial dealings are less than satisfactory.

To appoint him as Chancellor of the Exchequer is frankly an affront to the reputation of this nation... but hell you have to take a look at who appointed him.

Thanks (0)
avatar
By gillybean04
06th Jul 2022 09:19

So what further lies is Boris going to tell us next week that rishi couldn't get on board with and felt he had to resign over? Based on what he has lent his support to previously, the new thing must be pretty bad.

Thanks (1)
avatar
By mkowl
06th Jul 2022 09:37

Its dog eat dog in this rat race @Queen

Thanks (0)
avatar
By Catherine Newman
06th Jul 2022 09:38

Let's hope this is RIP ITSAMTD and a shakeup in standards at HMRC-see those pigs!

Thanks (2)
FirstTab
By FirstTab
06th Jul 2022 09:50

Not the right person for the job.

Thanks (2)
avatar
By petestar1969
06th Jul 2022 09:56

Zahawi's interview on BBC Breakfast this morning was interesting. Imagine being made to squirm by that plum John Kay? Bit wet. How many times did he say err?

Thanks (2)
avatar
By Mr J Andrews
06th Jul 2022 10:39

I would take Sunak's sadness at resignation with a Pincher of salt. The revelations of the [***] artist groper's antics were no doubt the final excuse he so badly needed.
Ah well Zahawi; your inheritance of the MTD minefield. Coming from Education, suggest you get a couple of schoolkids in to offer some overdue common sense.

Thanks (2)
Profile
By indomitable
06th Jul 2022 11:27

Complete chaos! A shambles! No wonder nothing works.

A Prime Minister who probably doesn't have the authority of who he can appoint any more

Question time should be interesting today, although no doubt Keir Starmer will drop the ball again!

Thanks (2)
Replying to indomitable:
avatar
By Red1960
07th Jul 2022 12:24

Question Time and the BBC are frankly part of the problem.

Thanks (2)
avatar
By tedbuck
06th Jul 2022 11:54

Interesting opinions all of them.

One thing strikes me and that is that the budget must be driven by the Treasury with only general direction from the Government. That being the case the Chancellor isn't necessarily the man to blame - much more likely to be the Treasury Mandarins. So we have a case of 'plus ca change, plus c'est la meme chose'. The Direction will come from BJ and whilst he is a good bullsh***er he has about zero financial background. He has, for example, been throwing weaponry to Ukraine which is sensible but he isn't increasing the defense budget enough to replace it.

The problem with politicians is that few of them (on both sides of the fence) have held proper jobs so they know little of the real world and those associated with the media cannot get away from selling no matter how many lies are involved in the sales patter.

Not at all a good situation and if HMRC are anything to go by relying on the Treasury for sensible policies and actual performance is like using a chocolate teapot.

Thanks (0)
Replying to tedbuck:
avatar
By Red1960
07th Jul 2022 12:39

"He has, for example, been throwing weaponry to Ukraine which is sensible but he isn't increasing the defense budget enough to replace it."

This I really can't believe and I guess you imagine you're quite a sensible chap.

By any index the Ukraine is one of the most corrupt countries on earth. There are no proper controls over the weaponry or the funds!

Weapons and money have been "thrown" at it like there's no tomorrow. I have heard rumours that over 54% of the money and the weapons have disappeared down the corruption hole.

No wonder Boris is such an enthusiast I imagine that the backhanders are mindboggling.

In the meantime you can pick up a Javelin and munitions by mail order on the dark web for about $US 30k! On sale to anyone no questions asked.

If CNN are reporting it you can bet the truth is even worse.

What happens to weapons sent to Ukraine? The US doesn't really know
CNN

https://edition.cnn.com/2022/04/19/politics/us-weapons-ukraine-intellige...

Thanks (0)

Pages