Even the MPs’ pension fund puts its money in tax havens

AS the Prime Minister faces continued attacks by Corbyn & Co over his investments offshore, I wondered whether his Opposition snipers are themselves whiter than white.

Surprise, surprise, the answer was “no”.

The Parliamentary Contributory Pension Fund — presumably the biggest investment many MPs have — squirrels away plenty of their cash in low-tax jurisdictions.

Just look at the Blairmore-style pooled investment vehicles it backs. OK, none of them are based in Panama but, as of last year, MPs’ pensions were invested in two Blackrock funds based in Ireland, one in Jersey and a Morgan Stanley one in Luxembourg.

It has since pulled out of the last two but recently put money into

Jim Armitage

the M&G European Loan Fund, based in Dublin.

As for where these funds themselves invest, it would be extremely surprising if they did not include numerous other assets in tax-haven destinations. So, what to make of all this? A fund spokesman points out that it’s under a fiduciary duty to invest in its members’ best financial interests. That has to include tax haven-based businesses because, they inherently offer better returns.

It’s a fair point. You can’t blame the pension fund. You also can’t blame the Cameron-baiting MPs for finding themselves in this situation. All major pension schemes invest in offshore funds whether you like it or not, and probably won’t tell you unless you ask.

No, what MPs’ pensions illustrate clearly is that offshore tax havens are utterly embedded in the financial world.

If MPs really want to close them down, the disruption for all our investment schemes would be immense.

The costs of investing would rise, and returns on pension funds — including those of MPs — would fall. A price worth paying for transparency, perhaps.

But politicians should think it through before they rush into any hasty actions. BOB Dudley should have given up a chunk of his ridiculous pay package long before today’s rowdy shareholder meeting.

In case you hadn’t heard, despite BP making record losses for shareholders, freezing pay for its staff and axing 5000 jobs, the chief executive is getting a pay and pension package of £14 million.

BP says he hit all the targets set and agreed by shareholders two years ago. Perhaps, but those targets have obviously created the wrong outcome. The board is allowed to override the algorithm and inject some common sense.

That it hasn’t is negligent. That Dudley didn’t voluntarily take a haircut is even worse.