The government is considering extending the powers of the Pensions Regulator in the light of the BHS scandal, it has emerged.
In a letter responding to a parliamentary report into the demise of the department store chain, the business minister Margot James said the government was determined the regulator had the power it needed to “deter and tackle misbehaviour”.
She added: “We are actively considering these issues and should we need to bring forward further legislation in light of all the evidence then we will of course do so.”
The work and pensions select committee is examining how pensions regulation could be improved. James said the government recognised the importance of the inquiry and would be considering the committee’s findings.
BHS collapsed about a year after it was sold by Sir Philip Green to a former bankrupt for £1, leaving a pension deficit of more than £570m. Dominic Chappell’s Retail Acquisitions consortium, which was at the helm when BHS called in the administrators, received payments of at least £17m from the retailer in just 13 months, according to evidence seen by MPs.
Green, whose family shared in £580m of dividend payments, rental payments and interest on loans handed out to shareholders during their 15-years ownership, has promised to “sort” the issue of the pension.
But six months after BHS went into administration Green has yet to come to an agreement over how to ensure savers get their promised pensions. Talks are thought to be held up over the amount of cash he would need to stump up to ensure pensioners receive full benefits.
A pot of at least £300m is likely to be required if Green is to avoid making further payments in future. Some experts have argued that the regulator’s legal case against him, under which it could force him to shore up the pension fund, was weak because the dividends and most of the loan payments were made many years before BHS collapsed.
In her letter to the chairs of the work and pensions select committee and the business innovation and skills committee, who jointly led the investigation into the demise of of BHS, James said the government shared their concerns about large payments receive by senior BHS executives and the impact on the retailer’s 11,000 workers who lost their jobs.
James said a tenth of the Insolvency Service’s investigatory capacity was currently devoted to the BHS case, which is also being looked into by the Serious Fraud Office as well as the Pensions Regulator. She said the government would be very concerned if investigators found breaches of the law or shortcomings in regulatory frameworks.
