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Chancellor must come clean over links to tax avoiders and tax havens, McDonnell says

SHADOW chancellor John McDonnell urged his government counterpart today to be honest about his past associations with tax-avoiders and tax havens.

Mr McDonnell said it was “critical” that new Chancellor Rishi Sunak comes clean to show that the government is serious about cracking down on tax non-compliance.

During an opposition day debate, Mr McDonnell said: “A former close business associate in two companies in which the Chancellor held senior positions was ordered to repay £8 million after engaging in an unlawful tax-avoidance scheme.

“Two of the firms in which he held senior positions have made use of the notorious tax haven Cayman Islands.”

According to HM Revenue and Customs, the tax gap — the difference between the amount of tax that should be paid and what is actually paid — is about £35 billion. Other experts have suggested that the gap could be as high as £90bn.

Mr McDonnell slammed the government’s “pathetic” penalties for tax avoidance and “scandalous cuts” that have caused a “social emergency.”

He pointed to the report led by Michael Marmot published today, which states that life expectancy has not increased for the first time in more than 100 years.

In a warning before next month’s Budget, Mr McDonnell said that “Tory neoliberal ideologues” cannot keep using the 2008 crash as a “fake alibi” to push through cuts, outsourcing and privatisation.

He added: “All this suffering, all this hardship, all this holding back of a near generation of potential would have been rendered completely unnecessary if we had a fair taxation system and invested in our economy.”

Chief Secretary to the Treasury Steve Barclay said that action had been taken by the government to ensure that companies pay tax, while claiming that attitudes in many large companies are changing.

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