Questions as new Scottish Labour HQ linked to tax haven

A telecoms firm controlled by Kenny Haughey has acquired the leasehold of a former bank for £400,000 and made it available to the party.

Although the company involved, CommsFM Ltd, is registered in Scotland, it is the subsidiary of a firm incorporated in the British Virgin Islands (BVI).

The European Union recently added the BVI to its tax haven blacklist over secrecy.

CommsFM Ltd has also been involved in Scottish Labour moving its HQ to temporary accommodation in Rutherglen, pending the move to the new building next year.

There is no suggestion of wrongdoing on the part of anyone involved, however having its Scottish headquarters linked to a tax haven could be politically embarrassing for Labour.

The party insisted it was paying a "commercial rent" to use the facilities.

However the SNP called it a “bombshell” just 48 hours before voting in the Rutherglen & Hamilton West by-election and a sign of poor judgment by Scottish Labour leader Anas Sarwar.

Labour’s policy programme for the general election includes a crackdown on tax evasion and tax avoidance, while last year deputy UK leader Angela Rayner told the Commons that “every pound hidden in tax havens is a pound lost from the pockets of working families”.

For many years, Scottish Labour was based in leased offices in Bath Street, Glasgow.

However the building was last year put up for rent, and the party is now between homes.

In July last year, agents for CommsFM Ltd successfully applied to Glasgow City Council to change the use of a two-storey disused former bank at 141 Norfolk Street in Laurieston.

Now designated as an office, it is this building which is set to become Scottish Labour’s permanent headquarters, a visible statement of intent on a key approach road into the city.

In March, CommsFM Ltd finalised a formal arrangement with HBL Bank UK Ltd and Glasgow City Council’s property offshoot City Property Glasgow (Investments) LLP.

The bank had acquired the Norfolk Street building on a 99-year lease from the council in the 1980s, but now agreed to assign it to CommsFM Ltd for £399,500.

A registered deed of the transaction shows the original lease between the bank and the council was also varied during the transfer to allow a change of use and, critically, to allow the building to be sub-let, allowing Scottish Labour to occupy it.

In May, agents for CommsFM Ltd went back to the City Council to apply for a five-year advertising consent for 12 large signs to be placed around the building.

Architectural plans show the property mocked up with red displays carrying the Scottish Labour thistle logo and the name “Donald Dewar House” over the main entrance. Permission for the signage was granted in August.

Although the building still requires to be refurbished, the body which collates business rates across the country already lists Scottish Labour as the occupant.

The Scottish Assessors Association website states the council’s property offshoot is the “proprietor”, CommsFM Ltd the “tenant”, and the Scottish Labour party the “occupier”.

Clare Haughey, the SNP MSP for Rutherglen, said: "Just two days before the voters of Hamilton and Rutherglen West go to the polls, these bombshell revelations raise serious questions for Scottish Labour. 

“If Scottish Labour has any credibility whatsoever, Anas Sarwar will now abandon these plans to relocate to these premises and sever all ties with business linked to tax havens.” 

CommsFM Ltd has been linked to the BVI since it was set up 20 years ago.

Impulse Management Ltd, which is based at a PO Box in Tortola in the BVI, initially held 93% of the shares in the firm, but this increased to a 100% holding in 2012. 

In July 2019, Kenny Haughey, who lives in Switzerland, was identified as the sole “person with significant control” over CommsFM Ltd thanks to his shareholding in the firm.

Because of the secrecy in the BVI, the ownership of Impulse Management is not public.

But the CommsFM Ltd accounts show that in 2019 a dividend of £300,000 was “processed to Impulse Management Limited, the sole shareholder”.

A further CommsFM Ltd dividend of £170,000 went to Impulse Management Ltd in 2020.

The CommsFM Ltd accounts for 2022 state: “The company is a subsidiary of Impulse Management Limited, a company incorporated in the British Virgin Islands. 

“The company’s ultimate controlling party is Kenneth Haughey.” 

Scottish Labour is currently based in Rutherglen in a building owned by one of Lord Haughey’s companies, but which is leased to a second firm owned by CommsFM Ltd. 

The party has been based since the summer at 7 East Kilbride Road in Rutherglen in one-storey chalet-style buildings also being used for the by-election campaign.

The site was bought by the Stevens Property Development Company Ltd in 2003, part of Lord Haughey’s refrigeration and property business empire. 

It was then leased to a second company, now called City Facilities Management (Scotland) Ltd, which is 100% owned by Kenny Haughey’s CommsFM Ltd.

The acccounts for City Facilities Management (Scotland) Ltd for 2022, which were signed off last week, show it benefits from an interest free loan of £846,000 from Impulse Management, the BVI-based company which owns CommsFM Ltd.

Scottish Labour is expected to lease the Rutherglen building from City Facilities Management (Scotland) Ltd until next spring, and the SNP has demanded to know the financial terms on which the property is being used.

A Scottish Labour spokesperson said: “Scottish Labour pays commercial rent to a UK based company for use of their facilities.

“Our office arrangements have been agreed between Scottish Labour and a company registered in Scotland.

“The Herald’s Glasgow offices are based in a building owned by Covault, a company registered in the Isle of Man with a controlling owner based in Monaco.”

The Herald attempted to contact Kenny Haughey. Speaking about the lease between Scottish Labour and his son’s company, Lord Haughey said: “The Labour party have a lease with a Scottish-based company that pays its taxes in Scotland.”