Taxman gets ‘blood money’ from frozen Libyan assets

THE Government has been accused of pocketing “blood money” on £11billion of frozen assets in the UK amassed by Colonel Muammar Gaddafi.

In a stormy private meeting, James Cleverly, the Middle East minister, was told it was a “disgrace” that HM Treasury pocketed millions of pounds a year in tax on £11 billion of frozen Libyan assets in the UK when it could go to IRA bomb victims.

MPs and campaigners are furious the Government is refusing to publish a report by William Shawcross into whether some of the cash can be used to benefit British victims of IRA bombs that used Libyan-supplied explosives.

The 90 page report – which was commissioned by Boris Johnson when he was foreign secretary – is understood to recommend that millions of pounds of tax paid on the assets could be diverted to help the families.

Speaking to MPs last week, Mr Shawcross refused to set out in detail the options for compensation. One of the problems was identifying “honourably” all of the many victims of IRA Libyan Semtex explosive who might benefit.

However, he admitted that there was a “strong argument” that some of the millions paid in tax on the assets should be handed to the families of victims.

In all, £21million in tax has been paid on the frozen assets since 2016/17. Mr

Shawcross said: “There is a strong argument that that tax could be hypothecated by the Exchequer, and it would have to be a government decision, to go towards a scheme for victims of Gaddafi-IRA terrorism.”

The following day the MPs clashed with Mr Cleverly at a private meeting. DUP MP Ian Paisley told him that the Government was “accepting blood money” by pocketing the tax.

A witness said: “He put it to the minister that it is a disgrace that the Government is taking blood money from profits and tax derived from Libyan assets.” The source added that Mr Paisley demanded that the money should go to IRA victims. The Foreign Office was approached for comment.

Writing for The Telegraph website, Jason McCue and Matt Jury, lawyers who have been working to secure compensation for the victims, accused the Government of “cowardice” adding: “Libya is responsible for the greatest single number of victims from a terrorist campaign in the UK’s history.”

A Government spokesman said: “Providing compensation specifically for the actions of the Gaddafi regime, separate from the support available to victims of the Troubles, is the responsibility of the Libyan state.”

A Foreign Office source added: “UK tax collected in relation to the frozen assets is not earmarked but goes into the Government’s Consolidated Fund [for] essential public services.”