Calls for inquiry after millions of pounds of public money ploughed into Norton Motorcycles before it went under
The chair of parliament’s public accounts committee is calling for an investigation into the government’s funding of Norton Motorcycles which went into administration two weeks ago leaving hundreds of customers and pension savers out of pocket.
Meg Hillier MP accused officials of “blindly pouring” millions of pounds into the company before it went under and said she intends to write to the department for business, energy and industrial strategy (BEIS) and the Cabinet Office to ask for an enquiry into why the business failed.
The Norton Motorcycles name is steeped in romance and nostalgia.
After the company’s chief executive, Stuart Garner, pledged to revive the brand in 2008 politicians lined up to support him.
Government ministers, from George Osborne to Liam Fox and Stephen Barclay, publicly endorsed Garner’s project, showering the company with praise and taxpayers’ money.
In February 2018 Theresa May took Stuart Garner on a Trade Mission to China.
The government made him an “Export Champion” and became one of the faces of an advertising campaign.
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Following the collapse of Norton ITV News and the Guardian revealed that 228 “ordinary working people” had their entire pension savings invested in Norton shares.
Paul Finch, from Torquay, is one of them. He claims he was mislead into investing the pension pot he had accumulated from 27 years at Princess Yachts in 2012.
As soon as his five year lock-in period with the “Dominator 2012 Pension Scheme” ended in December 2017, Mr Finch wrote to Stuart Garner, who was the trustee, and asked for his savings to be returned but the money wasn’t transferred despite repeated reminders.
Mr Finch is owed more than £100,000 which is now at risk.
The 52-year-old has multiple sclerosis and was forced to retire early from work in 2009. His pension is the only prospect on a future income.
“It’s the stress and the worry. I’m not sleeping, I’m just panicked,” Finch told ITV News. “I don’t know what to do. That money was my life, I worked hard for that money... I have nothing, nothing at all and it’s all down to Stuart Garner.”
The collapse of Norton Motorcycles raises serious questions about Stuart Garner’s conduct and the way he raised money to get the Norton business off the ground.
Paul Finch said the money he invested into Norton Motorcycles was "his life."
Garner bought the Norton brand in 2008 using a million pounds that turned out to be the proceeds of a tax fraud.
Four years later Garner raised almost £10m after savers, like Paul Finch, were encouraged to transfer their pensions into three Norton schemes on the promise of being able to receive a tax-free lump. They later received tax bills.
Peter Bradley and Andrew Meeson were associates of Garner and played a prominent role in both frauds. They were each convicted for the first scam and sentenced to eight and a half years in prison.
Garner insists he had no idea that Bradley and Meeson were conmen and that he is a victim of fraud just like the other Norton pension savers.
But we’ve seen evidence that he was aware Bradley and Meeson were being investigated a year before they were involved in setting up the Norton pension schemes.
ITV News and the Guardian have seen legal correspondence which states that Garner was interviewed as witness on 19th May 2011 by an officer of the HM Revenue & Customs criminal fraud investigations department, Tom Baker.
Garner was asked about the £1 million loan he had received from Moya, a company Bradley and Meeson acted for.
Garner gave evidence for the prosecution at their trial at Birmingham Crown Court and even after Bradley and Meeson were found guilty and jailed in March 2013, Garner continued to allow pension savers to invest in the Norton pension schemes.
The collapse of Norton has left pension savers wondering what happened to their money. A report prepared by Norton’s administrators BDO for prospective buyers sheds light on some rather odd-looking decisions that appear to have been taken by the company.
The document details that Norton owns a fleet of luxury cars including: six Aston Martins, three Range Rovers and an F Type Jaguar. BDO values the collections at just under £800,000.
The BDO report also reveals that, during the financial year ended in March 2018, Stuart Garner had borrowed £160,000 from the company, a loan that appears to still be outstanding.
In the same accounts, a separate loan of £324,002 made by Norton to one of Garner’s other companies was “deemed irrecoverable” and was “written off in the year”.
ITV News and the Guardian calculates that, since 2011, Norton Motorcycles has received more than £5 million of taxpayer support.
In July 2015, the then chancellor, George Osborne, visited the Norton factory and announced a grant of £4m from BEIS to the firm and 11 of its supply chain partners.
The Osborne grant was followed a year later by a £2.1m grant to Norton from Innovate UK, over which BEIS also has oversight.
In November last year, despite obvious signs that the business was in distress, the Midlands Engine Investment Fund, part of the British Business Bank that also falls under the jurisdiction of BEIS signed a heads of terms agreement to provide a £1.5m loan.
Norton didn’t end up receiving any money and went into administration last month.
Meg Hillier MP told us: "I think there are really serious questions here.
"Obviously it's impossible for anybody to have known everything that was going on with this failing company and particularly the pension issues. But it does beg questions about why more of the taxpayers’ money was being put into a company that clearly had performance problems.”
Stuart Garner declined our request for comment but he has always previously, strenuously denied any wrong-doing. When Norton went into administration on 29th January he said he was “devastated” for everyone associated with the company.
Garner claimed he had “personally lost everything” and blamed the failure of company on “a growing tax burden and ongoing uncertainties over Brexit affecting many things like tariffs, exports and the availability of funding”.
Garner is due to appear in front of the pensions’ ombudsmen tomorrow, which is hearing a case brought on behalf 30 pension savers.