U.K. Labor Party: £470M Worth of COVID-19 Contracts Linked to Tax Havens

Published: 11 December 2020

Personal Protective Equipment copyHundreds of millions in PPE contract recipients have been linked to tax havens, according to the UK Labor Party. (Photo: Simon Davis/DFID, Flickr, License)

By Eli Moskowitz

The U.K. Labor party called for “urgent clarity” over the £470 million (US$624.35 million) it found to have been doled out by the government for ten COVID-19 contracts to companies that are either listed, or have a parent company, in a tax haven, it said in a Thursday press release.

Its recent analysis found that these contracts for personal protective equipment (PPE) were from companies listed in countries such as Malta, Mauritius, Luxembourg, and Dubai –  known for their secretive or low-tax financial services industries.

“Taxpayers deserve to know their money is being handled with great care – and that any risks of its misuse through tax havens is carefully handled by this government,” Shadow Minister for the Cabinet Office, Rachel Reeves, said.

The U.K. government’s public procurement process, she added, “lacks important transparency, we are seeing no real moves to increase clarity or trust.”

Labor’s dissatisfaction over the government’s opaque COVID-related spending has been previously vocalized alongside members of parliament from the Green and Liberal Democratic parties. 

In October, several MP’s launched judicial review proceedings against the government with The Good Law Project, demanding that it publish details on a roughly £3 billion ($3.92 billion) black-hole of COVID-19 contracts, whose recipients had yet to be revealed despite being legally required to do so within a 30-day period.

The contracts that have been under public scrutiny have also drawn criticism. The Labor party, in its press release, asserts that the Tory-led government has fast tracked hundreds of contracts, and that over £1.5 billion ($2 billion) has gone to friends and donors of the party.

When pressed about this issue in an interview with Andrew Marr on the BBC, Rishi Sunak, U.K.’s Chancellor of the Exchequer – the government’s top finance official – declined to acknowledge that the government had misused public funds.

“When you’re in the midst of a crisis and you’re trying to ensure that you have enough PPE… it was right to try to do everything we can, and I’m not going to apologize for us acting in that way,” he said.

Facing allegations that some of his own wealth may also be stashed in offshore tax havens, Sunak, a former investment banker at Goldman Sachs, has been pressured to reveal where his funds are located in order to avoid any potential conflicts of interest while in office.