A potential deal on the BHS pension fund is set for scrutiny by the Work and Pensions select committee.
Yesterday (29 January) several national newspapers reported former BHS owner Sir Philip Green was finally close to securing a deal to salvage the pensions of thousands of the store’s workers.
The agreement - which sources close to the deal were reported as saying could be signed as early as this week – is expected to cost him more than £350m.
Commenting on the rumours a potential deal was nigh, Frank Field, chairman of the Work and Pensions select committee, said Sir Philip Green and the head of the Pensions Regulator are likely to be called back before MPs to justify plans to plug the multimillion-pound hole in the BHS pension scheme.
Mr Field said: “The key test is whether pensioners and future pensioners will get from this deal the pensions they expected before Sir Philip took ownership of BHS.
“The committee will be very pleased if there is a deal but will carefully analyse it to assess whether existing and future pensioners have been disadvantaged, and we may well call Sir Philip and The Pension Regulator back to give evidence if the deal is unsatisfactory in this regard.”
Earlier this month, MPs on the Work and Pensions select committee revealed they were investigating a £35m "floating charge" paid to Sir Philip's lawyers from the assets of failed retailer BHS.
The committee questioned whether the payment was a "standard move", as the administrator responsible claimed, pointing out that it was made without the knowledge of one of the two administrators and was later reversed.
The history of the £35m floating charge began, the committee said, in 2015 as a loan from Sir Philip’s company Arcadia to Dominic Chapell's Retail Acquisitions Limited, as part of the deal for the latter to acquire BHS from the former for £1.
At that point the loan was for £40m.
Immediately after the sale of BHS, Sir Philip is alleged to have offered to put the entire £40m into the the BHS pension scheme, which was already hundreds of millions of pounds in deficit.
In October, however, the committee said Sir Philip reduced that offer to just £5m. That meant BHS now owed Arcadia the balance - £35m.
As a floating charge, Sir Philip's right to that money came ahead of that of the Pension Protection Fund in the event that the company went into administration, which it did in April 2016.