The biggest company you've never heard of: Lifting the lid on Peel Group - the property firm owned by reclusive tax exile John Whittaker

The low-profile company controlled by a billionaire tax exile

Tom Harper
Saturday 19 October 2013 09:53
The Peel Group is as complex as it is successful – and its many  subsidiaries have interests in Liverpool and the Mersey docks
The Peel Group is as complex as it is successful – and its many subsidiaries have interests in Liverpool and the Mersey docks

When the BBC announced in 2007 that it was to move five major departments and 1,500 London-based jobs up to Salford, Manchester, one of the reasons it cited was a commitment to “distribute production spend… more widely across the whole of the UK”.

Its new £200m, five-storey home – MediaCityUK – on the banks of the famous Salford Quays would be a shining beacon of regeneration that the then-Labour government was trying to encourage in less-affluent regions beyond London and the South-east.

However, the company that rents the 200-acre waterfront site to the BBC is, in fact, one tiny cog in a giant network of companies ultimately controlled by a billionaire tax exile who lives on the Isle of Man.

Over the next 20 years, the BBC is due to spend hundreds of millions of pounds in licence-fee payers’ money to the Peel Group, one of the largest private-owned property companies in the UK.

At the apex of its complex corporate structures sits John Whittaker, a fearsome dealmaker whose aggressive business strategies have seen the firm colonise huge swathes of the North.

There are hundreds of subsidiary Peel companies registered in the UK, all ultimately owned by a private family trust, the Billown Trust, registered in the Isle of Man.

Almost three-quarters of this entity is owned by John Whittaker, 71, and his children, with the remaining stake taken by the Saudi Olayan Group.

The tycoon is a director of an astonishing 312 companies, according to Companies House. Almost all are Peel Group subsidiaries, which include interests in Liverpool, Durham and Doncaster airports, the Manchester Ship Canal, Scottish ports, and docks along the banks of the River Mersey.

The jewel in the Peel crown was, until 2011, the Trafford Centre, a huge out-of-town shopping mall in Manchester eventually sold to CSC for £1.65bn. When the sale was completed, Whittaker’s empire managed to legitimately avoid paying around £200 million in capital gains tax because it took payment in CSC’s shares.

Last week, MPs on the Commons Public Accounts Committee published a report that warned of a danger to the BBC’s reputation if it forms questionable business partnerships. “The BBC’s relationship with significant partner organisations also involves potential reputational risks for the BBC, for example, the extent to which partner organisations are transparent about their tax status in the UK and the amount of tax they pay,” it said.

The committee demanded that the BBC executive provide evidence to the governing BBC Trust showing that it assessed the “potential risks” of allowing the Peel Group to have a “dominant position” at Salford.

“It should also make clear its expectation that, as an organisation funded by the licence fee, it expects companies with which it contracts to pay their fair share of tax.”

Peel Group’s MediaCityUK venture in Salford is heavily reliant on public money, including more than £400 million in rent for BBC studios and office space.

The labyrinthine nature of the Peel Group’s corporate structure means it is difficult to say how much tax it pays to HM Revenue and Customs.

In June, the MPs made a visit to the premises and the committee chair Margaret Hodge said the Peel Group was not contributing enough to the Inland Revenue, claiming the group paid a maximum average of 10 per cent corporation tax. “They do not pay their fair share,” she said.

A Peel Group spokesperson said: “It is inaccurate to suggest that Peel is not paying its fair share of corporation tax. All Peel Group operating businesses, including Peel Media (the developers and owners of MediaCityUK), are UK domiciled for taxation purposes and pay the appropriate level of UK corporation tax.” He declined to comment on the tax affairs of Mr Whittaker, of whom surprisingly little is known.

Mr Whittaker seldom makes public appearances, and when he does they often stay in the memory. When the Trafford Centre opened in 1998, Mr Whittaker dressed up in a spotless white naval uniform with gold epaulettes and abseiled down into the mall from the bridge of a mocked-up transatlantic cruise liner.

Despite Mr Whittaker’s advancing years, his ambition shows no sign of faltering. His next big project is to transform 50 miles of bleak industrial land between the Port of Liverpool and Salford Docks into a £50 billion redevelopment called “Ocean Gateway”. The scheme, which will take at least five decades to complete, will include a £5.5 billion overhaul of the city’s waterfront with 50 skyscrapers, four hotels, a marina and a cruise liner terminal.

However, there is significant local disquiet over pumping yet more public money into a company that – albeit legally – appears to avoid so much tax.

Peter Kilfoyle, a former Labour Cabinet Office minister, is campaigning for more openness and transparency in Peel’s dealings on Merseyside.

His think-tank ExUrbe claims the Peel Group has received millions in EU and UK public grants. Mr Kilfoyle is also concerned about the influence the group has over local planning and points out one of its directors, Robert Hough, was chair of the North West Regional Development Agency and now chairs the Liverpool City Region Local Enterprise Partnership. He told The Independent: “Everything we know about what Peel does is legal. But that is vastly different from what is in the public interest.

“We have to ask ourselves if putting public money into organisations like Peel, who operate through a web of companies that funnel a lot of money offshore, is actually in the national interest. Just because it is legal doesn’t mean it cannot provoke disquiet. Where does the investment go?”

Mr Hough said: “The roles and responsibilities of all LEP board members, including the chairman, are clearly defined and have been formally discussed by the board.”

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