Today the Shadow Chancellor has written to Philip Hammond demanding answers over the refusal by HMRC to investigate Lycamobile over money laundering allegations because it is a Conservative Party donor.

In 2016 Labour published an independent review of Her Majesty’s Revenue & Customs (HMRC) with the aim of enhancing HMRC’s efficiency, effectiveness and public accountability.

Recent scandals such as what took place last week between Lycamobile and HMRC have only further made the case that there is an urgent need for the Government to examine current processes to protect the interests of taxpayers.

The full text of John McDonnell’s letter to Philip Hammond can be found below:

Dear Chancellor,

Like many others, I was shocked by the recent revelation that HM Revenue and Customs refused to assist a French investigation into Lycamobile for money laundering, after citing the company’s significant donations to the Conservative Party.

As you know, Lycamobile has donated £2.2m to the Conservative Party but has recently been fined for money laundering in a French court.

This is an exceptionally serious matter. It is essential that potential breaches of the law are investigated without fear or favour, and that our public institutions are free from any suspicion of political corruption.

An independent investigation into HMRC’s relationship with Lycamobile is required, but there are four questions arising from this case which you, as the Secretary of State ultimately responsible for HMRC, need to answer urgently:

Who authorised the email from HMRC blocking the Lycamobile investigation? When was it known to HM Treasury that the investigation was being hindered by HMRC? Were the usual procedures followed in failing to authorise this investigation and, if not, why not, and on whose authority? Will you now allow a full investigation into alleged money laundering at Lycamobile by the French authorities?

Given the seriousness of the allegation made, I would appreciate full answers as soon as possible.

Yours sincerely,

Rt Hon. John McDonnell MP,

Shadow Chancellor