Among the assets of 39-year-old billionaire William Bruce Harrison are a former racetrack, an 83,000-acre farm and 19 mountains. Until 2024, Harrison, the son of a Texas oil dynasty, was also the ultimate beneficial owner of a construction company, ISG. The firm was a major supplier to the British state, working on everything from courts and hospitals to the House of Commons; its government contracts paid out £1.85 billion over a decade.
In September 2024, ISG fell into administration and 2,200 workers lost their jobs. These people had no claim to the Harrison Mountains. The £15,193,580 in redundancy payments they received were not paid by ISG, its holding company (which remains in business) or Harrison itself. Instead, she was paid by the British government.
The figure is just one item in almost £2 billion in redundancy payments covered by the state, as recorded in five years’ worth of redundancy payments data provided to New statesman according to freedom of information rules. The records show that a significant number of companies controlled by very wealthy individuals, often resident overseas, have their employees’ redundancy payments covered by the taxpayer.
When a company is liquidated, it is expected to repay those it owes money to – its creditors – but there is an order of priority. Secured lenders, usually banks, are at the front of the queue; Smaller and unsecured creditors – the contract cleaner, the caterers – are on the back foot. When a collapsing company cannot or will not pay its employees, they are referred to the Redundancy Payment Service, which covers statutory redundancy entitlements of up to £21,570 per person. This money comes from the National Insurance Fund, better known for paying state pensions. More than £490 million in redundancy payments were awarded to British workers made redundant in the last financial year.
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This system is an essential part of the social safety net, protecting workers from the impact of sudden job loss. It also upholds a core principle of British economics: that a company can go bankrupt while its owner remains solvent. This is known as limited liability and allows people to take the risk of starting their own businesses.
But the payment data raises a moral question. When a wealthy business owner or foreign private equity firm cuts British jobs, they can do so knowing that the UK taxpayer will pick up the tab. To which the taxpayer may ask: is it fair?
Jonathan Moulton CBE is British and has a considerable interest in British politics, as a Conservative Party donor and director of a right-wing think tank, the Center for Policy Studies, which argues that fewer people should be “dependent on the state”. He lives outside Great Britain, however, in the Crown Dependency of Guernsey.
In 2012, Moulton’s private equity firm, Better Capital (also based in Guernsey), acquired one of the UK’s largest double glazing companies, Everest. In 2020, Everest went into administration and the Insolvency Service paid £956,919 in statutory redundancy pay to the employees who were made redundant. Everest was then sold to a new company, Everest 2020 Ltd, which was also owned by Better Capital.
Four years later, Everest 2020 also collapsed, and this time the state paid £3,150,443 in redundancy to its former staff. All of this was legal and for workers who lost their jobs, the Redundancy Payment Service offered a lifeline. And yet, a taxpayer might ask why Better Capital – still solvent when Everest 2020 collapsed – could not have found the money to pay those who had worked to enrich its investors. Moulton is thought to be a centimillionaire; The Sunday Times Rich List estimated his net worth at £185 million in 2019.
The payout records include a list of well-known British high street victims such as Laura Ashley, in which Malaysian centurion Khoo Kay Peng took a controlling stake in 1998. When the company went into administration in 2020, the state paid its workers £7,044,474 in redundancy. Khoo recently paid his wife £64 million in a divorce settlement.
Rental chain BrightHouse also went into administration in 2020, leaving the state to cover £6,411,497 in redundancy payments to its workers. BrightHouse’s parent company, Caversham Finance, had been owned by US private equity giant Apollo Global Management, which at the time had more than $400 billion in assets under management and paid its top five executives more than $35 million that year. Among them was the firm’s billionaire founder, Leon Black, who resigned the following year after admitting he had paid Jeffrey Epstein $158 million for “estate and tax planning.”
Companies associated with Paul McGowan appear multiple times in the surplus payment records. McGowan is a co-founder of Hilco Capital, a distressed investment and liquidation specialist – sometimes described as a “vulture fund”. Hilco has played a role in restructuring a number of troubled high street names, including Homebase (whose employees claimed £7,577,484 from the RPS), Wilko (£51,805,400) and Windows and Doors (£5,702,113).
McGowan was born in Belfast and is an Irish citizen, but he lives in Monaco, which charges no income or capital gains tax. Another Monaco resident, Tina Green, was not required to pay tax on the £1.2 billion dividend she received in 2005 from Arcadia, the high street giant – the parent company of Topshop, Miss Selfridge, Wallis and Dorothy Perkins – where she was the majority owner and her husband, Philip Green, was CEO. The Greens were often spotted aboard their $150 million 90-meter superyacht Lionheart.
When Arcadia collapsed in 2020, its employees were sent to the state for redundancy, claiming £19,143,060 over two years through the RPS.
When restaurant company Casa Negra Ltd went into liquidation in January 2021, its 64 employees went to RPS, from which they claimed £105,893. This is a relatively small amount, but once again it was claimed by the employees of a resident of Monaco: the company’s main shareholder, and the only person listed as having significant control, was Lord Edward Albert Charles Spencer-Churchill, who is registered at Companies House as resident in the tax-free principality.
As chairman of the Blenheim Art Foundation and half-brother of the Duke of Marlborough, Spencer-Churchill was responsible for the installation of Maurizio Cattelan’s America – a working toilet cast in 18 carat solid gold – at his family home, Blenheim Palace. The artwork was stolen in September 2019 and never recovered, but was insured for £4.8 million.
The taxpayer did not have the same level of coverage. According to the liquidator’s progress reports for Casa Negra Ltd, the Surplus Payment Service has not yet recovered any of the money paid to Lord Churchill’s employees.
Among the many prominent names in the bailout data is Greensill Capital, a financial firm that secured loan guarantees from the British Business Bank before it collapsed in March 2021, costing the state around £335m. Among the Greensill employees – although apparently not among those who claimed redundancy pay from the RPS – was former Prime Minister David Cameron, whose salary was reported to be $1 million a year for 25 days’ work.
Lex Greensill, the Australian banker who founded the firm, reportedly sold, along with his family, about $200 million worth of shares in the company in 2019 alone.
The Government can recover some of the money spent through the Surplus Payment Service. The Insolvency Service can register as a creditor in a bankruptcy and seek repayment, but this happens in a minority of cases and the sums recovered are relatively small. In each of the last two financial years, the Insolvency Service has recovered less than £1 for every £10 spent, recovering around £40m (including anticipated future recoveries of around £500m in surplus payments.
Is all this money – half a billion a year in redundancy payments – just wasted on taxpayers? Ewan McGaughey, professor of law at King’s College London, says it shouldn’t be. The principle of limited liability, he explains, is “the bedrock of corporate law and has been there since 1856,” and that should remain the case where people have the power to negotiate.
But there is also the principle of “enterprise liability”, which says that when a company owns another company, it can be held liable for its subsidiary. In tax law, it is well established that a single holding company must account for the group of companies it owns; in competition law, a group of companies can be treated as a single monopoly. McGaughey says “a small change to the Employment Rights Act” could extend this principle to workers, who typically lack bargaining power. Under such reform, when a private equity firm or holding company buys a British business, it would be considered the ultimate employer of its workers – and would be responsible for their redundancy pay.
The only change needed, says McGaughey, is to “make it clear that the employer includes parent companies or others in the corporate group.” This would give employees “a direct right of action if their employer defaults, to obtain redundancy pay from the parent company”. Otherwise, if they claimed from the RPS, the government would be “substituted to their claims”, meaning there would be a simpler and more direct way to recover money from a paying owner, rather than just becoming another claimant in a liquidation.
This reform could save the National Insurance Fund hundreds of millions – but it could have an even more important effect. Foreign owners buy British companies all the time: they’re relatively cheap thanks to a weak pound, and UK workers don’t have the same protections as their French or German counterparts. The result is that much of the economic activity we think of as British – from high street chains to healthcare, housing and education – is actually owned by investors abroad, particularly in the US. Private equity firms control businesses that employ 2.5 million workers, or about one in every 12 workers. By leaving the state to look after the workers they abandon, these investors have effectively pushed us to subsidize their huge British buying spree. It’s time to start asking for our money back.
(Further reading: How the powerful benefit from disorder)
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