COMMONS

Government collecting £5 million in tax every year from frozen Libyan assets

24 June 2019

The Northern Ireland Affairs Committee publishes the Government response to its report on support for victims of Gaddafi-sponsored IRA attacks, revealing the Government's multi-million-pound tax receipt from frozen assets.

Since the Committee raised the question of whether the Government is profiting from Libyan assets frozen in the UK under UN sanction in 2011 in an evidence session several months ago, the Government has refused repeated calls from the Committee to reveal exactly how much tax is collected. In its response to the Committee's final report on compensation for victims of IRA attacks that used Gaddafi-supplied Semtex, the Government now reveals the value of its tax receipts.

The Government response reveals that since the start of the 2016-17 financial year HMRC has collected around £17 million from frozen assets. Approximately £5 million each year is collected.

The Gaddafi regime's supply of several shipments of Semtex – a highly powerful, malleable and virtually undetectable plastic explosive – to the Provisional IRA in the mid-1980s led to a deadly campaign of bombings across the UK. The Northern Ireland Affairs Committee published a report on compensation for victims of these attacks in April 2019, in which the Committee highlighted that the Government could use a portion of the tax it collects on frozen Libyan assets to compensate victims.

The Committee welcomes the Government's decision to reveal the tax receipts, and now calls on the Government to use this money to give financial support to victims until compensation can be secured from the Libyan authorities.

In its report, the Committee highlighted that "continued inaction" from the Government meant that time was running out for some victims, and called for a fresh approach to securing compensation. The Committee urged the Government to enter into direct negotiations with the Libyan Government but in its response the government says it is "not envisaged" that William Shawcross, the newly appointed Special Representative for UK Victims of Gaddafi-sponsored IRA terrorism, will engage in direct government-to-government negotiations with Libyan authorities.

Chair's comments

Commenting on the revealed tax figure, Committee Chair Simon Hoare MP said:

"The Government claims it has been taking a more "visibly proactive" approach to securing compensation for victims, but it took my Committee to point out that the profits the Government has been accruing from frozen Libyan assets could be put to better use. I am glad the figure has now been revealed to us, and there is now a clear moral imperative for this money to be used to help victims who have suffered for far too long. Mr Shawcross should complete his calculations as a matter of urgency, and this tax should be used to assist victims.

The Government needs to ask itself whether it is content to continue profiting from frozen Libyan assets while victims receive nothing. The tried and tested methods of grappling with this issue of the last 15 years has amounted to nothing for victims, so we are calling for a fresh approach, imagination and compassion from the Government to ensure victims are compensated urgently."

In the 2015 Parliament, the Northern Ireland Affairs Committee called on the Government to establish and finance a reparations fund for victims ahead of the outcome of negotiations with Libya. The information the Government has now revealed about tax accrued from frozen Libyan assets makes it clear that money is readily available to create such a fund.

Further information

Image: Treasury

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