Sunderland Labour Group has announced its backing of a campaign to exclude businesses linked to tax havens from being awarded public contracts.

An amended version of the UK Public Procurement Bill by The Fair Tax Foundation will recommence its passage through the House of Lords this autumn, before moving to the House of Commons.

Public procurement contracts in the UK currently amount to £300 billion per year, however research by Fair Tax shows c.17.5% (£37.5 billion) of those are awarded to businesses linked to tax havens, amounting to one in every six contracts.

If the amended bill passes through parliament, it will allow public sector organisations to exclude businesses from procurement processes where there is strong evidence of financial and criminal activity. It will also make it compulsory for overseas suppliers to disclose their beneficial owners, a role which is already in place for UK businesses.

Sunderland City Council first backed the bill in January 2021 after it was raised at full council and was unanimously supported by all of the city’s councillors, however the amendment will require it to be put to cabinet once again.

The continued support of the Fair Tax campaign by Labour follows the success of its city-wide Community Wealth Building strategy, which was launched in 2018, supported by the Centre for Local Economic Studies (CLES).

Community Wealth Building has seen the local authority prioritise public spending with local suppliers, resulting in the Council recording its highest ever local spend last year – at £122m – up £42.9m on 2013 when it began compiling records.

However, while the Council is able to reward businesses on their locality during the procurement process, the current law restricts it from factoring in matters of ethical conduct and economic crime, such as affiliations with tax havens.

Cllr Graeme Miller, leader of Sunderland City Council, said: “While the Conservatives try to slash taxes for the super-rich in a bid to see wealth ‘trickle down to the poor’, it is allowing over £300 billion worth of public sector contracts every year to be awarded to businesses with links to tax havens.

“That is hundreds of millions of pounds of taxable revenue that could be reinvested into our communities; into creating jobs and into supporting vital public services such as our NHS and emergency services which find themselves on life-support from crippling funding cuts.

“Here in Sunderland, our Community Wealth Building programme has been a real success since we introduced it in 2018. In just four years, it has resulted in hundreds of millions of pounds being reinvested back into the region, which has had huge environmental and economic benefits.

“However, while we have made huge strides in ensuring as many Sunderland pounds stay in Sunderland as possible, UK law means we have our hands tied when it comes to penalising those bidding for contracts who are using tax avoidance schemes to syphon the pound out of Britain and into tax havens.

“If Liz Truss, Kwasi Kwarteng and their Conservative government are truly serious about addressing the cost of living crisis and creating a fairer, more equal Britain, then they can start by backing the amends made to the UK Public Procurement Bill and helping drive dirty money out of Britain and putting clean money back into areas such as Sunderland.

“Sadly however, the failure to clamp down on even its own MPs utilising non-domestic tax status loopholes has only confirmed that we have a Government more focused on turning Britain into a fawning servant to the super-rich, rather than a country where its own citizens bear the fruit of their labour.”

The UK Public Procurement Reform is a bill put in motion by the Fair Tax Foundation.

For more information on the bill, visit: