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Shadow chancellor calls for transparency over UK's $2bn loan to Saudi Aramco

Hannah Boland
John McDonnell wrote the letter on Tuesday - Bloomberg

Labour's John McDonnell has written to Chancellor Philip Hammond calling for more transparency over the Government's attempts to secure the listing of Saudi Aramco in London.

It comes after it emerged last week that the UK Government had offered Saudi Aramco, the Saudi Arabian state-backed oil giant, a $2bn (£1.5bn) loan guarantee amid a tightening race to host what could be the world's largest initial public offering.

In a letter, seen by The Daily Telegraph and sent on Tuesday, Mr McDonnell, the shadow chancellor, said a "number of questions have arisen from the Government's reported attempts to secure London as the location of the scheduled IPO of 5pc of that business".

He asked "on what grounds and based on what evidence" had the Treasury assessed that guaranteeing the loan would be in the interests of the British public, and questioned whether the decision to offer the loan guarantee was in any way influenced by attempts to secure the Saudi Aramco offering.

Mr McDonnell called for all correspondence between Mr Hammond, his cabinet colleagues and Treasury officials and UK Export Finance, the body which provided the credit guarantee, to be published, and asked whether any of the cabinet had made representations to the FCA or London Stock Exchange for a loosening of regulations.

This relates to proposals put forward by the FCA to tweak UK listing rules to attract more state-ruled companies to list in London.

The change would allow Saudi Aramco to apply for a special category of premium listing which would have less onerous regulatory requirements, but would not require it to float the 25pc normally sought for a premium listing. 

On Friday, the Treasury denied reports the loan was linked to efforts to secure the float, and said it was instead going to be used to enable Saudi Aramco to buy more from the UK. 

The Treasury did not immediately respond to requests for comment.