Some breaking news now, Germany has decided to send Leopard 2 tanks to Ukraine after weeks of international pressure, including from Kyiv and its European allies.

Rishi Sunak has tweeted to say that it is the "right decision" for Nato allies "to send main battle tanks to Ukraine". Other European nations which use the German-made tanks required permission from Berlin to send them.

"Alongside [the UK's] Challenger 2s, they will strengthen Ukraine’s defensive firepower. Together, we are accelerating our efforts to ensure Ukraine wins this war and secures a lasting peace."

Our colleagues are keeping you updated on a separate live blog - follow it all here.

Chris Mason
Political editor

One Labour Party figure reflects that a minister in trouble faces no greater peril, no greater jeopardy than 11:30 on a Wednesday morning before Prime Minister's Questions.

It's the time when the PM rehearses lines they intend to use publicly half an hour later and comes to the crushing realisation that they don't fly, they're not credible - and so it is bye-bye to the minister.

Zahawi insists he has acted properly throughout and is determined to stay on.

But the government now confronts in this saga another awkward juxtaposition: The Times is reporting this morning, external that the Treasury is short of money at the same time that a story about the taxman having to chase, or having chased a previous chancellor, dominates the headlines.

The Office for Budget Responsibility's projections for the medium term outlook for the economy are gloomier than they were, and this presents the Chancellor Jeremy Hunt with a headache.

Image source, Reuters

That said, any recession is now expected to be shorter and shallower than had been thought, so it’s not all bad news. And savvy ministers do like to talk things down before a Budget in the hope of surprising on the upside on the big day.

Nonetheless, these new figures will mean, I’m told, something of a re-write of a speech Hunt will give in London on Friday.

Spiralling prices, high taxes, squeezed public spending -- and a row about a multi-millionaire politician being fined a huge sum for being careless with his taxes.

When you put it like that - as Conservative MPs from the cabinet down do in private - it helps explain why a growing number of them are running out of patience with Nadhim Zahawi.

Image source, PA Media

Prime Minister Rishi Sunak could also face questions about the UK economy in the Commons today.

The Office for Budget Responsibility has told the government that it overestimated the prospects for medium-term economic growth and that it intends to revise down its outlook, the Times reports today., external

The potential downgrade from Britain's official economic forecaster would reportedly wipe out all of the government's £9.2bn headroom in the public finances.

It would also limit the scope for manoeuvre by Chancellor Jeremy Hunt as he draws up a March's spring budget.

The OBR said in November that it expected the economy to shrink by 1.4% this year before returning to 1.3% growth in 2024, 2.6% in 2025 and 2.7% in 2026.

According to the Times, the OBR intended to reduce its forecasts by between 0.2% and 0.5%, without giving more details.

The Treasury or OBR have not yet responded to the report, but Rishi Sunak may have to address it if pressed by Labour this afternoon.

Image source, PA Media

Born in Iraq in 1967, Nadhim Zahawi could have been sent to fight in the Iran-Iraq War but his family were forced to flee and he grew up in Britain.

Zahawi describes the memory of them fleeing as a "traumatic" childhood moment "stamped on his memory".

He grew up in Sussex, where he attended private and comprehensive schools.

Zahawi went on to study chemical engineering at University College London. He then followed his father's entrepreneurial footsteps and set up a firm selling Teletubbies merchandise.

In 2000, Zahawi co-founded online polling company YouGov. The venture was a great success - but questions over the sale of shares in the company and whether this was taxed correctly have prompted scrutiny of HIS financial affairs.

Since then he has held a number of high-profile roles in government, including vaccines minister and education secretary, as well as chancellor.

Before the issue around the YouGov tax reached the news, the 55-year-old was known as a solid media performer for the government.

Image source, PA Media

In an interview this morning, Conservative MP Tobias Ellwood would not be drawn on whether Nadhim Zahawi should stand down over the issues surrounding his tax affairs, joking: “Isn’t it time for the weather now?”

On BBC Radio 4’s Today programme, Ellwood was asked if the current controversy was a distraction for Prime Minister Rishi Sunak.

“The fact you’re still asking these questions shows, yes, it is a distraction," he replied.

“We should be continuing our discussion on Ukraine and you’re asking me now about another issue to do with the Conservative Party."

The issue surrounding Zahawi’s tax affairs “should have perhaps been slid across to the ethics adviser much sooner”, he said.

“Nobody knows the full picture...apart from Nadhim Zahawi and of course the HMRC,” Ellwood added.

“Let's allow the [ethics advisor’s] report to land and then we’ll have to take things from there."

Image source, UK Parliament

The fallout from Nadhim Zahawi's multi-million pound tax settlement with HMRC while he was chancellor is likely to be seized on by Labour leader Sir Keir Starmer at PMQs.

Since last Wednesday's session, Rishi Sunak has ordered his ethics adviser to investigate whether Zahawi broke ministerial rules, and has acknowledged there are "questions that need answering".

But it is not clear what he knew when he appointed Zahawi as party chairman.

Zahawi has insisted an "error" he made in his handling of his tax affairs was "careless and not deliberate", and he is "confident" he has "acted properly throughout".

But Labour has argued Sunak should sack him now, calling the ethics adviser's inquiry a "pathetic attempt to pass the buck".

Yesterday, deputy leader Angela Rayner told MPs: "Why does the prime minister need an adviser to tell him that this conduct is unethical? If this isn't a breach of the Ministerial Code, surely the code itself is wrong and it's the prime minister's job to fix it."

Six words uttered by Rishi Sunak that could prove pivotalpublished at 09:34 Greenwich Mean Time 25 January 2023

09:34 GMT 25 January 2023

Chris Mason
Political editor

The row about Nadhim Zahawi now pivots on six words uttered a week ago by the prime minister, and the asteroid of new information that thundered down at the weekend.

At Prime Minister's Questions last Wednesday, Rishi Sunak was asked about Zahawi and his answer was pithy, bordering on the dismissive.

Zahawi had "already addressed this matter in full", Sunak said. Those are the crucial six words.

The revelations that were to follow were to publicly humiliate the prime minister, because at the weekend Zahawi acknowledged he had paid a penalty to Revenue and Customs when he settled what to most will sound like a colossal tax bill -- in the region of £5m.

Downing Street told us this was news to them, and it was soon news to Zahawi that he had a bloke called Sir Laurie Magnus on his case, the prime minister's new ethics adviser.

In other words, Rishi Sunak had gone from pithy endorsement to downright public equivocation about his party chairman's conduct.

We can expect Labour to give all this some welly at Prime Minister's Questions later.

Image source, EPA

Tory Party chairman Nadhim Zahawi was seen arriving at Conservative Party headquarters in Westminster earlier this morning. The press had been gathered outside his house from dawn.

All eyes are on Zahawi today - and his tax affairs - as Rishi Sunak faces a grilling from the opposition at PMQs later.

Nick Eardley
Chief political correspondent

On the BBC this morning, the former Tory minister David Gauke also questioned Nadhim Zahawi's previous public remarks, saying it was "very hard if not impossible" to reconcile his public comments with the revelation he paid a tax penalty.

Gauke also criticised legal threats against the Dan Neidle, the independent a tax lawyer who made claims about Zahawi's tax affairs last summer.

"It appears he was threatening to sue people...for essentially telling the truth," said Gauke.

Nick Eardley
Chief political correspondent

Nadhim Zahawi is likely to have to resign over the row about his tax affairs, according to former Conservative minister David Gauke.

He told the BBC this morning: "It's hard to see how this doesn't ultimately end in his resignation".

Gauke said there were too many "impossible questions".

He predicted PMQs at midday would be "very uncomfortable" for Rishi Sunak - and that he should be worried that information had emerged in the week since the prime minister said Zahawi had answered questions in full about his tax affairs.

Iain Watson
Political correspondent

Nadhim Zahawi is being investigated by the PM's recently appointed adviser on ministerial standards, Sir Laurie Magnus.

Sir Laurie is looking at whether Nadhim Zahawi may have breached the ministerial code - that's the rule-book which requires honesty integrity, openness and accountability from those in government office.

The code also states that "ministers should be as open as possible with Parliament and the public, refusing to provide information only when disclosure would not be in the public interest".

Last summer when Zahawi was chancellor, he had dismissed reports of an HMRC investigation as "smears" and had threatened some of those who intended to raise questions about his tax affairs with legal action.

And this has now drawn criticism not just from the opposition, but from a less predictable source - the cross-bench peer Lord Evans.

Some senior Conservatives are privately baffled that the party chairman didn't sort out his tax affairs well before becoming a minister.

Zahawi said he was confident he'd acted properly throughout.

Last summer, Nadhim Zahawi dismissed reports of a HMRC investigation as "smears" and threatened some who intended to raise questions about his tax affairs with legal action.

This has drawn criticism not just from the opposition, but people like Lord Evans, Chairman of the Committee on Standards in Public Life.

He told BBC Radio 4's PM programme yesterday that the "apparent legal attempts to suppress this story" does not "live up to the sort of standards" the public would expect.

Senior Conservative MP Caroline Nokes has meanwhile called for Zahawi to "stand aside until this matter is all cleared up" but the prime minister has so far stood by him saying it is "longstanding practice" for ministers to remain in their roles while under investigation.

Image source, Getty Images

Nick Eardley
Chief political correspondent

Image source, UK Parliament

What a difference a week makes. At PMQs last week, Rishi Sunak said Nadhim Zahawi had addressed matters in full.

We’re told that at that time the prime minister didn’t know Zahawi paid a penalty as part of his tax settlement with HMRC.

You can expect the PM to face some key questions on this today:

• What did he find out and when?
• What advice did he get when Zahawi was appointed?
• Is he still happy to take his minister at his word?

Zahawi has shown no sign of resigning. He is determined to make his case in a probe by the PM’s ethics adviser.

But that investigation has not stopped more questions coming.

Image source, Reuters

Prime Minister's Questions is likely to be a testy affair today, with the opposition parties expected to grill Rishi Sunak about Nadhim Zahawi’s tax affairs.

Sunak has ordered his ethics advisor to investigate how Zahawi resolved a tax dispute when he was chancellor.

The PM has said there are "questions that need answering" but it is unclear what he knew about Zahawi's dealings with HMRC when he appointed him.

Zahawi, who is chairman of the Conservative Party, maintains he behaved appropriately.

Labour has argued the prime minister should sack Zahawi before the investigation concludes, calling it a "pathetic attempt to pass the buck".

Good morning and welcome to our live coverage. It's going to be a busy political morning, all building up to Prime Minister's Questions at noon.

At the weekly showdown in the Commons, Rishi Sunak is likely to face more criticism today as he resists calls to sack Conservative Party chairman Nadhim Zahawi over his tax affairs when he was chancellor.

Leader of the Opposition, Sir Keir Starmer, is expected to press the PM on what he knew and when.

Stay with us as we bring you the latest.