John McDonnell takes new chancellor Sajid Javid to the cleaners with scathing letter

John McDonnell and Sajid Javid
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On 5 August, Labour’s John McDonnell shared a damning letter which takes Boris Johnson’s new chancellor Sajid Javid to the cleaners.

Javid involved with “financial weapons of mass destruction”

The shadow chancellor wrote to Johnson on 31 July calling for “two investigations into Mr Javid’s past conduct in matters of financial stewardship and decision-making”. McDonnell said that one should look into Javid’s involvement with “risky financial instruments that played a key role in contributing to the 2008 financial crash”. Javid, he stressed, had participated in “some of the worst excesses of the casino economy” while working at Deutsche Bank. US business magnate Warren Buffet, he said, had called the aforementioned ‘instruments’ “financial weapons of mass destruction”. And he continued by emphasising:

It will not be lost on those that have suffered the consequences of the last nine years of austerity following the 2008 financial crisis that the newly appointed Chancellor profited from the greed that contributed to it.

He also called for an investigation into Javid’s potential involvement with a tax avoidance strategy. As the Guardian wrote:

The Mail on Sunday reported in 2014 that Javid opted into a scheme known as “dark blue” that channelled bankers’ bonus payments through the Cayman Islands.

And calling for the release of Javid’s tax records, he claimed:

He has not denied his involvement in the scheme and has refused to disclose how much tax he paid.

Read on...

For McDonnell, Javid’s alleged previous activity “critically undermines this Government’s response to the scourge of tax avoidance”.

A “financial snake pit rife with greed, conflicts of interest and wrongdoing”

As political economist Will Hutton wrote on Twitter:

Deutsche Bank has paid extraordinary fines of $14 billion for its conduct in investment banking – and is now fighting for its very life given the losses it incurred in investment banking. Sajid Javid was at the heart of it. Now Britain’s Chancellor.

As the Guardian reported:

Javid held several senior executive positions at the German investment bank, including a role selling collateralised debt obligations (CDOs), a type of complex and risky financial product responsible for turbocharging the financial crisis.

It also pointed out that:

Deutsche Bank, which was among the biggest sellers of CDOs, was described by US senator Carl Levin as a “financial snake pit rife with greed, conflicts of interest and wrongdoing” ahead of the 2008 crash…

Deutsche Bank has spent more than $18bn (£15bn) on fines and to settle legal disputes in the past decade, according to Bloomberg.

Deutsche Bank refused a Guardian request for comment.

Holding the financial industry to account

Two days earlier, McDonnell had also promised “a public inquiry into Britain’s financial industry”, saying:

By seeking to hold both Britain’s new chancellor and the whole financial system to account, McDonnell is showing his clear determination to end the toxic gravy train between the financial sector and government. That is a necessary change that anyone who’s suffered from Tory-led austerity should support wholeheartedly.

Featured image via Sophie Brown/Wikimedia and Foreign and Commonwealth Office/Wikimedia

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  • Show Comments
    1. John McDonnell takes new chancellor Sajid Javid to the cleaners with scathing letter
      LOOK Labour party hold a new G.E. in NOV 2019
      STOP pi**ing about now this man will destroy our country for personal, gain only for himself then Do a runner back to U.S.
      remembering David Cameron did a runner on us all on E.U. mess.
      The fact as they stand now the E.U. mess is of Tory party making ONLY they put it to a public vote and lost!
      P-1 Tory Govt put it to a vote and lost the vote.
      P-2 Tory X, P.M. David /C did a runner after losing the E.U. vote.
      P-3 X P.M. Ms May was kicked out of office by her own party male members.
      P-4 Boris could do the same as David /C, did on us all when he got No deal with E.U. 27 members.
      P-5 The only way forward now is a new G.E. in NOV 2019 Put the E.U. mess to another public vote as Tory Govt have had 3 + years, to sort out E.U. C**p we voter will sort out the E.U. mess to get us out of E.U. but failed to do so.
      then at same time we voters will remove Tory party from power a fact!
      P-6 So all parties in the H.O.C. put a vote of No confidence in Tory Govt after the Holidays set a date in Nov 2019 for a new G.E. then we public will sort out Tory Govt mess and put a stop to their incompetence to run our country right or fairly for us all in the U.K. we voter have had all we can take of Tory Govt now, therefore, Labour hold a new G.E. NOW

    2. Well said, Mr McDonnell.

      If Javid were a poacher turned gamekeeper, there might be justification for his role in government. That on basis of a co-architect of austerity knowing who merits a short ride on a tumbrel and where their loot is stashed.

    3. My message to the Government is this. Look around you and see what you have created. A population living in poverty, living in fear, looking towards a future with no job security, no home and no hope. You are now seeing the results. They are going to get worse, much worse.

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