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BHS collapse: 'Sir Philip Green must pay his fair share'

Angela Eagle said Sir Philip Green should contribute to the pension deficit Credit: House of Commons

Angela Eagle has questioned whether forrmer BHS owner and businessman Sir Philip Green should contribute to the collapsed store's reported £571 million pension fund deficit.

Labour's shadow business secretary said Sir Philip had turned the retailer's deficit into hundreds of millions of pounds by the time he sold BHS for £1 last year.

"If the worst happens the liability will be covered by the pension protection scheme and BHS staff will only get 90% of the pension they have worked so hard for", she said.

"But Philip Green seems to have got much more out of BHS for himself and his family than that.

"BHS staff and the public will understandably want to know whether the former owner who took so many millions of pounds out of the business will have to pay his fair share of the liabilities accrued during his stewardship.

"It is right that the pensions of working people are covered in the event their employer goes under, but in this situation it appears this owner has extracted hundreds of millions from the business and walked away to his favourite tax haven - leaving the pensions protection scheme to pick up the bill".

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Pensions watchdog launches BHS collapse probe

BHS's pension fun deficit stands at £571 million Credit: PA

BHS's £571 million pension fund deficit will be investigated by the pensions watchdog.

The body said it has launched a probe to make sure the collapsed department chain can meet as much of its pension obligations as possible.

BHS fell into administration on Monday, putting 11,000 jobs at risk across its 164 stores.

It has debts of more than £1.3 billion, including the pension fund deficit of £571 million, which holds 20,500 pensions in its scheme.

Tories must 'get to grips' with high street challenge

Angela Eagle said UK high streets face a Credit: PA

Shadow business secretary Angela Eagle urged the Government to "get to grips with the challenges facing our high streets" on Monday.

The Labour MP said the issue was highlighted by retail giant BHS's decision to go into administration.

She said BHS's 11,000 employees would be "deeply concerned" by the move.

"The events at BHS highlight the need for the Tory Government to get to grips with the challenges facing our high streets", Ms Eagle said.

“Reports suggest that the business which has accumulated a pension black hole of £571 million, paid out hundreds of millions of pounds in dividends to shareholders under the former owners.

"BHS workers who are facing redundancy and cuts to their pensions will rightfully be raising questions about whether this was appropriate".

Union: Taxpayers should not foot BHS's pension bill

The shopworkers' trade union Usdaw has said taxpayers should not be left to pick up the bill for collapsed retailer BHS's £571 million pension deficit.

The Pensions Regulator is currently in negotiations with the department store's previous owner Sir Philip Green over plugging the pensions hole.

Sir Philip, who owns Topshop, is reported to have offered £80 million towards the cost of BHS's pensions, though the regulator could still pursue further payment from the billionaire.

BHS files for administration

Struggling retailer BHS has filed for administration, with the group trading as usual until a buyer is found.

Administrators Duff & Phelps says it is "very unlikely" the group "will be able to meet all contractual payments".

The Group has been undergoing restructuring and, as has been widely reported, the shareholders have been in negotiations to find a buyer for the business. These negotiations have been unsuccessful. In addition property sales have not materialised as expected in both number and value.

Consequently, as a result of a lower than expected cash balance, the Group is very unlikely to meet all contractual payments. The Directors therefore have no alternative but to put the Group into administration to protect it for all creditors. The Group will continue to trade as usual whilst the Administrators seek to sell it as a going concern.

Further announcements will be made as appropriate in due course.

– Statement from administrators Duff & Phelps
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