Labour says Sajid Javid unfit to be chancellor over claims he ‘profited from greed’ that fuelled financial crisis

Boris Johnson has been urged to investigate his new chancellor Sajid Javid’s City career after Labour accused him of profiting from the “greed” that fuelled the financial crisis.

John McDonnell, shadow chancellor, has written to the prime minister to demand an investigation into Mr Javid’s time at Deutsche Bank, raising questions about whether he had any connection with a tax avoidance scheme while at the firm.

Mr Javid spent 18 years working in the City before entering politics, including a stint at Chase Manhattan Bank in New York, before rising to become managing director at Deutsche Bank.

Labour has raised questions about Mr Javid’s suitability to run the public finances after his time at the German investment bank, which was described by a US Senate committee as “a financial snake pit rife with greed, conflicts of interest and wrongdoing”.

Mr McDonnell also questioned his counterpart over the bank’s involvement in trading collateralised debt obligations, a complex financial product deemed to have played a role in the 2008 crisis.

In the letter, obtained by The Guardian, Mr McDonnell said: “Mr Javid’s widely reported implication in some of the worst excesses of the casino economy, defending the sale of high-risk financial products that contributed to the 2008 crisis, calls into question whether he can be trusted with the secure stewardship of the nation’s finances.

“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.”

Mr McDonnell highlighted comments associating Mr Javid with collateralised debt obligations, described by American business magnate Warren Buffett as “financial weapons of mass destruction”.

The Labour frontbencher also questioned Deutsche Bank’s use of the Dark Blue scheme, found to constitute tax avoidance by the Supreme Court, which saw bonus shares awarded to staff through a Cayman Islands company, known as Dark Blue Investments. Mr McDonnell also demanded Mr Javid publish his tax returns.

A Conservative Party spokesman said: “Frankly, Labour might want to use the time better thinking about their own credentials for governing.

“Not content with antisemitism being rife in their party and their totally incoherent Brexit policy, the only threat to the UK economy is them.

“Their reckless plans would see debt soaring as they spend one thousand billion pounds, tax raids on hard-working families, and upheaval of our economic system by replacing key posts such as the governor of the Bank of England with their hard-left choices. Utter disaster.

“If any party knows about failure and bogus investigations, it’s them.”