The Blog of
Nadine Dorries
Business is Booming in Mid-Beds
Posted Tuesday, 24 March 2015 at 09:01

I had a great day on Friday visiting businesses run by and that provide employment for my constituents in Mid-Bedfordshire.

It started with a breakfast meeting in Flitwick with entrepreneurs who have braved the business climate of the last few years and are now feeling quietly optimistic about the road ahead.

One delegate even told me, ‘
We are all scared to say it out loud but the phones are ringing again and everyone I speak to in Mid Beds is getting busier and busier.’

Then it was on to Driveline Golf, who produced a nice video of me meeting their enthusiastic young apprentices, and the Consumer Protection Association, which is doing well and celebrating its 25
th birthday in Mid-Beds.

This all goes to show that business is booming in Mid-Beds. We have the Millbrook technology hub and now Centre Parks all contributing to a long-term downward trend for unemployment in the constituency.

Guardian interview
Posted Friday, 6 March 2015 at 19:45

 Click here to read the interview.
Adjournment debate
Posted Thursday, 5 March 2015 at 20:30

Littlewoods and Telegraph Pension Funds

Motion made, and Question proposed, That this House do now adjourn.—(Mel Stride.)

5 pm

Nadine Dorries (Mid Bedfordshire) (Con): I am proud to represent the seat of Mid Bedfordshire, but I am also proud to have been born and bred in Liverpool. I have secured this Adjournment debate because I am gravely concerned that the pensions of many thousands of people in Liverpool and elsewhere in Britain, including in my constituency, might be in danger and that if things go badly wrong the British people, via the Pension Protection Fund, will be called on to pick up the pieces.

We must not forget the lessons learned from the Robert Maxwell scandal. Potentially, billions of pounds of public money is at stake, placed at risk by the pension schemes of the companies ultimately controlled by two men, Sir David and Sir Frederick Barclay, also known as the Barclay twins.

The twins are rich men, although perhaps not as rich as they appear to be, who live in Monaco and in a pseudo-Gothic castle on the island of Brecqhou, off Sark, to avoid British tax. They do not pay their fair share of tax, yet their company, Shop Direct, formerly known as Littlewoods, is suing the British taxpayer for £1.2 billion in compound interest for overpayment of tax on a company the Barclay twins did not even own when the event took place. Some might call that greedy. I do. The Barclay twins are avariciously greedy.

The Twins are notoriously reclusive, which is rather weird, as they own The Daily Telegraph, and they are notoriously aggressive in defence of their own reputations. Twice they have sued British journalists in France. The BBC “Panorama” journalist John Sweeney was convicted of criminal libel in France for comments he made on BBC Radio Guernsey. In 2005, The Times was sued by the twins, again in France. Some might call it hypocritical for owners of a British newspaper that regularly dishes out dirt to sue competitor journalists in a foreign jurisdiction. I call that hypocritical. When I wrote a critical judgment of their actions on my blog, they harassed my blog site host with midnight e-mails from lawyers in New York, France and London, forcing my host to close down my blog for a few hours. The Barclay twins are deeply hypocritical.

People who watched the “Panorama” programme “The Tax Havens Twins”, still available on YouTube, saw ordinary people on Sark give witness that they have been bullied by the twins’ representative on the island. The Barclay twins are also bullies.

The danger to public funds from the twins is fundamentally simple, although the details are murky and obscure, perhaps deliberately so. The twins’ companies, including Shop Direct and Yodel, are losing money hand over fist. Yodel has a loan with HSBC worth £250 million pounds, and if we add that to other loans we see that the twins’ companies owe about £l billion to the banks. That may all be with HSBC, and not just the £250 million as reported. In addition, Shop Direct has traded receipts from its loan book for a £1.25 billion pound facility with a clearing bank, believed to be HSBC.

On the rare occasion when profits are made, they are shelled out of the individual company and transferred to parent and/or grandparent companies often incorporated 

5 Mar 2015 : Column 1181

offshore in the British Virgin Islands, Bermuda and other offshore havens. In plain English, the twins’ businesses are losing massive amounts of cash, and when they do not they are hollowed out. If the pension funds suddenly needed a fresh injection of funds, how easy would it be for the pension trustees to extract that money from this complex maze of offshore accounts?

The answer to the question turns on the strength of the pension fund covenants. Again, the picture is not clear, and that is not good. Let us take the Littlewoods scheme, the Littlewoods plan, the GUS ex-gratia unfunded scheme and the unfunded scheme for members. I will refer to them as “the scheme” for short, and that scheme is worth £1.37 billion.

One of the problems highlighted by the Robert Maxwell scandal was that too many of the pension fund trustees were dependent on Robert Maxwell. How many of the Littlewoods scheme trustees are genuinely independent of the twins? One, maybe two. Of the eight trustees, I can identify five that are not. The Pensions Regulator recommends the appointment of a professional trustee for a large scheme. As far as we can tell, no such appointment has been made. It also recommends two independent trustees. Of the two that are in place, one has been there since 1997, the other since 2008—that is not independent.

With a pension scheme worth £1.37 billion, it is very worrying that the recommendations of the Pensions Regulator appear to be ignored. That is at the heart of this matter. The dire financial performance of Shop Direct and Yodel, the £1 billion of loans, and the trade of the Shop Direct loan book for a further £1.25 billion give rise to concerns that the trustees must, by law, address. Minister, is that happening?

Recently, journalist Peter Oborne left The Daily Telegraph because, he said, the paper was defrauding its readers. He said that it had gone soft on HSBC because it did not want to lose advertising income. Mr Oborne understated the problem. The Daily Telegraph went soft on HSBC not just for fear of losing advertising money but because the twins’ companies are in so much debt to HSBC—at least £250 million, possibly as much as £1 billion in loans if HSBC is the bank behind the loan-book deal.The Daily Telegraph owners may have a further £1.25 billion of reasons to be soft on the tax cheats’ bank. We are talking a cool £2 billion-plus here, not the £250 million that was recently reported.

As I have told the House, the twins are suing the taxpayer in the Supreme Court for almost exactly the same amount as the loan book agreement, which by the way, requires renewal every 12 months, making it very vulnerable. They have already received the simple interest and principal amounting to over £470 million so they have already taken a fair slug of our money. But it is not enough. These offshore, non-UK taxpayers would like the British taxpayer to transfer to their pockets the cost of four operational hospitals or 12 running schools. But they may not win their case in the Supreme Court. The twins’ companies underlying the pension funds may end up in a serious amount of debt, running into billions, just like Robert Maxwell’s companies.

If the twins win their case, how are to we ensure that the £1.2 billion remains on British soil to safeguard the scheme from future poor investment returns? As we know, that happens. It is the reason why the Pension Protection Fund was established—to protect members 

5 Mar 2015 : Column 1182

and contributors from scheme shortfalls. I fear that the money will be siphoned offshore, leaving the tax payer via the Pension Protection Fund to pick up the £1 billion-plus price tag if the group continues to perform financially as badly as it has been doing.

The Barclays winning or losing their £1.2 billion court case makes no difference to this scenario. If they win, they could siphon the money abroad and the British taxpayer will pick up the bill. If they lose, the British taxpayer picks up the bill by picking up any shortfall in the scheme fund. Can we depend on the Barclay twins to do the right thing should the scheme suffer a shortfall? We can only make that assessment based on their financial track record and character. We know that they are in serious debt. We know that they were criticized for their role in the Crown Agents scandal going all the way back to 1973. As Mr Paddy McKillen, the owner of three London hotels, can testify, they lack scruples. Mr McKillen’s American social security number was stolen in order to gain access to his financial information as part of an aggressive and hostile takeover of his business.

Let us take a look at the experience of the islanders on Sark. For years they have been bullied, blackmailed, threatened and terrorised. People have fled the island, others have woken to find flyers and papers with their personal information posted across the island. When the wife of the seigneur of Sark fell seriously ill, the twins’ man on the island attacked the seigneur, and all because the Barclays want control of the island and for it to be run as they see fit. The character of the twins can be summed up in three words: greedy, hypocritical and bullying.

What assurance can the Minister provide that if the Barclay twins win their victory in court and get £1.2 billion from the taxpayer, the money will stay here in the UK for the benefit of the scheme fund members, should there be a shortfall? What guarantee can he give that if there were a shortfall, the British taxpayer will not be funding the scheme via the Pension Protection Fund? Has the Pensions Regulator looked into this matter, given the poor financial performance and indebtedness of the contributing companies?

The Robert Maxwell pensions scandal happened because too many people— journalists, politicians, pension fund trustees and lawyers—held their tongue for fear of legal threats and intimidation. Today, the Government protect individuals against pension fund loss via the PPF, but that fund could not survive a hit to the tune of £1 billion. I know the Minister will be keen to provide reassurance that all is well with the fund, but all is not well when one considers the existing make-up of the fund trustees. We are not just concerned about today. Just under the surface, things are not well. I urge the Minister to use his good offices and impress on the Pensions Regulator the need to evaluate at the very least the composition and validity of the scheme trustees.

Today the foundations of the Barclay twins’ empire are cracking. Tomorrow the walls may come tumbling down. I hope that as a consequence of the dire financial circumstances of the Barclay twins’ companies, there will be no threat to the long-term security of the pensioners dependent on them. I hope I am wrong, but I fear I may be right.

Click here to read the minister's reply.

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