Business

Sir Philip Green told to fund Arcadia's pension deficit

Sir Philip Green Image copyright Getty Images

Sir Philip Green should use his own money to support the pension fund of his troubled Arcadia retail empire, MP Frank Field has urged.

The chairman of the Work and Pensions Committee intervened following Sir Philip's plans to restructure Burton, Dorothy Perkins and Topshop and cut contributions to the pension scheme.

Mr Field - a critic of Sir Philip when the BHS store chain collapsed - said the cuts were "disappointing".

Arcadia declined to comment.

Under the proposed restructuring announced this week, the Arcadia business would shut 23 stores and the company's contribution to the pension fund reduced from £50m a year.

This will be cut to £25m, but Sir Philip's wife, Lady Tina Green, who is the main shareholder of Arcadia, offered to contribute £25m per year for the next three years, plus an extra contribution of £25m.

Mr Field said: "It was disappointing to to see the proposals that contributions to reduce the deficit will be halved as part of the financial restructuring."

The MP said he welcomed reports that Sir Philip and his wife would make personal contributions to reduce the deficit, but he warned "this is not sufficient to ensure adequate protection for scheme members".

He added that the pensions regulator would be forced to step in if members of the pension fund were put at serious risk.

"When a similarly grim situation arose for BHS pension scheme members, you personally provided funding, though not until after the intervention of the Pensions Regulator," Mr Field wrote.

"Might I please ask you to offer a guarantee to Arcadia staff that you would do the same for them, should the deficit reduction plan prove insufficient - and this time, without the need for the Regulator of Parliament to step in first?"

Sir Philip has previously faced fierce criticism from politicians including Mr Field for his handling of BHS's sale and subsequent collapse.

He eventually paid out £363m of his personal wealth to help shore up the group's pension deficit.

About 520 jobs are thought to be at risk as a result of the rescue plan for Arcadia. The Pensions Regulator has doubts that the deal will "adequately protect" the pensions of employees.

The regulator's support is crucial in order for the Company Voluntary Arrangement (CVA) - a type of insolvency for troubled businesses that allows rents to be cut - to be approved.

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