Businesses with tax haven links ‘won one in six’ public procurement contracts

Labour says ‘Tory procurement racket’ results in ‘billions of taxpayers’ money handed to offshore cronies’

British Virgin Islands is one of a number of tax havens in the world (Mike Coppola/Getty)

Businesses linked to tax havens were the winners of one in every six public procurement contracts issued by government across a five-year period, new analysis has reportedly found.

Labour criticised what it called a “Tory procurement racket” while others called the figures a “scandal”.

The Fair Tax Foundation analysis looked at public procurement contracts issued by the UK government between 2014 and 2019.

It found 17.5 per cent of successful bidders were at least partly domiciled in a tax haven, including the British Virgin Islands, Panama and Jersey.

These contracts were worth £37.5 bn in total, according to Fair Tax Foundation.

The taxpayer-funded deals covered health, transport and infrastructure among other sectors, according to The Guardian, who first reported the analysis.

“The Tory procurement racket sees billions of taxpayers’ money handed to offshore cronies,” Labour’s Angela Rayner said, echoing comments she is set to make to the party conference on Sunday.

She said her party would “put a stop” to this, ending “handouts” to tax havens and giving “sleaze merchants their marching orders”.

On Sunday, Ms Rayner will outline Labour’s plan to ensure contracts are handed out “in the national interest” by institing suppliers create more jobs, train workers and invest in communities.

She has repeatedly criticsed the government’s handling of contracts in the Covid pandemic after news of a “VIP lane” for contacts of officials emerged.

Speaking about the Fair Tax Foundation analysis, the Women’s Equality Party tweeted: “This is a scandal.”

A government spokesperson said: “The government has high standards and expects that public sector suppliers will pay the tax they are obliged to.”

They said non-payment of taxes was “already an exclusion ground” and claimed the government has “led the world in tackling tax avoidance and evasion and in improving tax transparency”.