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Oligarch levy will hand Britain £3bn, says Labour

McDonnell calls for new tax on ‘suspicious wealth’ gained from secret property purchases

LABOUR’S proposed “oligarch levy” to tax the secret offshore purchases of property in Britain could generate more than £3 billion a year from “suspicious wealth” for the Treasury, the party said yesterday.

Shadow chancellor John McDonnell announced it was “time to call an end to the use of our financial system and property market as a hiding place for rich foreign oligarchs” by enforcing unexplained wealth orders and extending transparency of British-owned companies to known tax havens.

Mr McDonnell is also calling for the “politically exposed person” regime to be tightened up and the introduction of a so-called “Magnitsky clause” to apply sanctions against human rights abusers. The clause is named after a whistleblowing accountant who died in jail in 2009.

Labour estimates that its “oligarch levy” could raise £3.5bn a year, pointing to the £4.4bn-worth of British properties identified by Transparency International as having been bought with “suspicious wealth.”

The “oligarch levy,” first featured in its 2017 manifesto, would apply a 15 per cent surcharge on all purchases of residential property by offshore companies, following similar levies in Toronto and Vancouver in Canada and those in Singapore and Hong Kong.

The party also points out that unexplained wealth orders, which allow authorities to confiscate the proceeds of crime where a person cannot account for the origin of their assets, have not been used since they came into force at the end of January.

Labour said it would provide an extra 10,000 police and ensure the National Crime Agency is properly resourced to enforce the regime.

Shadow cabinet office minister Jon Trickett MP also weighed in  following Boris Johnson’s appearance on the Andrew Marr Show where he admitted he did take part in a tennis match with the wife of a former Russian minister after she donated £160,000 to the Conservative party, said: "The Tories have serious questions to answer about where their party gets its money. He admitted that some Russian oligarchs in the UK ‘may have obtained their money by corruption.’
 
"We know the Tories have taken more than £3 million in Russian-linked donations since 2010, including £800,000 under Theresa May's leadership, but we don't know the nature of all those funds.”

Mr McDonnell said Chancellor Philip Hammond “needs to introduce serious measures that would strengthen the hand of the authorities” looking into imposing sanctions on individuals who may be involved in the chemical attack in Salisbury two weeks ago.

He also defended Labour leader Jeremy Corbyn, who was smeared by many Tories for urging the government to take a “calm, measured” approach and warning against the drift towards a “new cold war” with Russia following the poisoning of ex-spy Sergei Skripal and his daughter Yulia.

Mr McDonnell said Mr Corbyn had given a “constructive critique” and others “had misread that,” adding: “It's the role of a responsible opposition to ensure that they have an honest critique of the government and what they're doing.”

The party also wants to extend the PEP regime, widening the definition of “associates” of high-level government figures and their families whose assets must be scrutinised by financial institutions to prevent corrupt individuals and their wealth slipping through the net.

Mr McDonnell pledged that the next Labour government “will take a sledge hammer to money laundering and tax avoidance and call an end to the exploitation of our financial system and property markets by the global elites.”

He said: “We need to see less empty rhetoric from leading Tories competing for the leadership of their party and more action from the top of government to strengthen any financial sanctions we impose on Russia.
 
“If we want to really take the fight to the gangster politicians and Russian elites hiding their money in the UK, then we need serious measures like the ‘oligarch levy,’ which will hit them where it hurts — in their wallets.”

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