A Labour MP rounded on the Isle of Man in the House of Commons.

Dame Margaret Hodge, who represents Barking, was speaking in a debate prompted by the Paradise Papers.

Of the Isle of Man she said: ’One might ask how this small country can afford to raise enough in taxes to run its public services without any contribution from corporation tax?

’The answer is simple: we subsidise it. It is our tax money that substitutes for the tax income it could receive from charging businesses properly. It is our money that enables it to be a tax haven. Our government do not just tolerate tax havens. They are using our taxes to enable the Isle of Man to operate as a tax haven. As with all these things, the government refuse to be transparent.’

She said: ’In 2016, the then Chief Secretary to the Treasury renegotiated the formula and agreed a generous annual uplift of way above the level of inflation.

’We give the Isle of Man more than £300m a year, which is just under one third of its entire budget for public expenditure. That figure is set to rise to £340m by 2019. This sum appears to have nothing to do with what is happening in the Isle of Man’s real economy, where employment is down and the population is declining.

’It has everything to do with what seems to be a deliberate policy intention of our government to subsidise the Isle of Man and thus promote and support it as a tax haven. The Treasury has refused to publish details of the formula on which our payment is based. I ask the Minister to release those details.’

Financial secretary to the Treasury Mel Stride replied: ’There are at the moment ongoing discussions on a new formula.’

He said the 4.5% uplift would not be overly generous, as suggested, in the long run ’once all the surveys and research have been carried out’.

There are three pages of coverage of the Paradise Papers in the Manx Independent, which is on sale now.