Government accused of collecting 'blood money' on Gaddafi’s UK assets at 'stormy' MPs' private meeting

A Foreign Office minister has been told the Government has pocketed “blood money” on £11billion of frozen assets in the UK amassed by Colonel Muammar Gaddaffi in a stormy private meeting.

James Cleverly, the Middle East minister, was told it was a “disgrace” that HM Treasury pockets millions of pounds a year in tax on £11billion 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 Semtex.

The 90 page report from Mr Shawcross - 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 helping the families.

Speaking to MPs last week, Mr Shawcross refused to set out in detail the options for compensation for victims of IRA Libyan Semtex.

One of the problems was identifying “honourably” all of the many victims of IRA Libyan Semtex 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 member Ian Paisley told Mr Cleverly that the Government was “accepting blood money” by pocketing the tax paid on the frozen assets.

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 “tax take blood money should be directed immediately towards the victims of Gaddafi sponsored IRA terrorism”.

The Foreign Office was approached for comment.

Writing for the Telegraph’s website (see below), Jason McCue and Matt Jury, two lawyers who have been working for a decade to get compensation for the victims accused the Government of “cowardice”.

They said: “Libya is responsible for the greatest single number of victims from a terrorist campaign in the UK’s history.

“In the 1980s, the Gaddafi Regime shipped tonnes of Semtex to the IRA -- to use to kill UK citizens -- as part of its own proxy war against the West. Libyan-IRA bombs went on to murder and maim an estimated 3,500 across Great Britain and Northern Ireland.

“The USA, France and Germany have all successfully secured compensation for their victims of Gaddafi's terror campaign against the West. It is only the Government’s cowardice that prevents the UK from doing the same.”

A Government spokesman said: “The UK Government has profound sympathy for UK victims of Gaddafi-sponsored IRA terrorism, and for all victims of The Troubles.

“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.

“We will continue to press the Libyan authorities to address the Libyan State’s historic responsibility for the Gaddafi regime’s support for the IRA."

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, which is used to fund essential public services.

"Providing compensation specifically for the actions of the Gaddafi regime is the responsibility of the Libyan State. It is not therefore for the UK Government to divert UK public funds specifically for this particular purpose.

"Doing so would also not deliver the accountability for the specific role the Gaddafi regime played in the Troubles which victims are seeking."

Op-Ed: 'It is only HMG's cowardice that prevents the UK from securing compensation for Gaddaffi's victims'

By Jason McCue and Matthew Jury

Libya is responsible for the greatest single number of victims from a terrorist campaign in the UK’s history. In the 1980s, the Gaddafi Regime shipped tonnes of Semtex to the IRA -- to use to kill UK citizens -- as part of its own proxy war against the West. Libyan-IRA bombs went on to murder and maim an estimated 3,500 across Great Britain and Northern Ireland.

The UK's victims' journey has been a long one. In 2006, they commenced litigation in the USA; only for a Tony Blair brokered deal between Bush and Gaddafi to deprive them of just compensation. In 2009, the FCO gave them a dedicated unit to support their own negotiations; this turned out to be sham.

In 2011, their lawyers secured the Benghazi Agreement -- a commitment from the Libyan government -- to pay compensation; HMG failed to follow through. In 2017, a Parliamentary Inquiry condemned HMG's inaction and concluded only government-to-government negotiations could resolve the issue.

Despite this, and to date, HMG still refuses to act.

This brings us to the appointment in 2019 of William Shawcross as a Special Envoy tasked with reporting to HMG on how to progress the victims' claims. Mr. Shawcross presented his 90-page report to the Foreign Secretary in March last year.

After a year of the victims demanding the report be published, this week, the FCDO announced it cannot do so. They claim this is because it was commissioned as an internal scoping report. This ignores the fact that Boris Johnson had proposed the Special Envoy’s appointment on the basis that their findings could be utilised by and shared with the victims and their representatives.

They also forget to mention that, under Mr. Shawcross' terms of reference, publication was always at the discretion of the Foreign Secretary. It's not that the FCDO cannot do so, they will not do so. Why?

From his testimony before the ongoing Inquiry on Wednesday, it is clear that Mr. Shawcross is frustrated too. His sympathy for the victims was also evident.

Mr. Shawcross revealed to the Inquiry that he could reveal very little for fear of breaching his "contract" with the FCDO. However, despite his effective gagging, what we did learn is that, once again, HMG has kowtowed to someone opposing the victim’s best interests, but to who?

First it was Gaddafi, then the Americans then Big Oil, then the new Libyan government. But whose interests have HMG prioritised over the victims this time?

Mr. Shawcross revealed to the Inquiry that he had been warned off by ‘senior politicians’ in Northern Ireland. They told him: his work wasn't "justified"; Libya's arming of the IRA is history; the evidence against the perpetrators too old; to do so would reopen old wounds; compensating only one group of victims would upset the peace process.

‘Senior politicians’ can only refer to Unionists or Nationalist politicians, or the Northern Ireland Office. Our own experience of representing the victims is of help and support from politicians on both sides of the divide.

When we started this campaign decades ago, we went to great lengths to ensure that any compensation beyond the damages to the individual claimant-victims went to cross-community and border schemes aimed at reconciliation.

The only antagonism and negativity the victims’ campaign faced was from the NIO. Its rationale was that the case would upset Sinn Fein and the peace process. In turn, the FCDO and Downing Street sought to drown the victims in tea and sympathy and kick the issue into the long grass (the recent report being another example of a year’s delay).

As one victim told us this week: “We can make our own tea. What we need is the Government to actually do something meaningful”.

Let's be clear. Securing just compensation from a state sponsor of terrorism for the harm and loss it caused to British citizens does not upset the peace process. Refusing to address and acknowledge the sins of the past for self-serving political gain does.

Moreover, this is not an issue that effects just Northern Ireland. Many of the victims are on the mainland and tired of Belfast politics blocking a just resolution.

HMG's trembling before such ‘senior politicians’ is a national shame and embarrassment.

The USA, France and Germany have all successfully secured compensation for their victims of Gaddafi's terror campaign against the West.

It is only HMG's cowardice that prevents the UK from doing the same. At the very least, these ‘senior politicians’ seeking to deny the victims’ hopes and justice from in the shadows should be outed and have their hollow concerns subjected to transparent scrutiny by the victims.

Jason McCue and Matthew Jury - McCue & Partners LLP