Britain's ex-Pensions Minister told us 'there is no question' that the regulator is 'forensically looking at BHS'

Former Pensions Minister Steve Webb has defended the Pensions Regulator over its role in the collapse of the high street retailer BHS, by saying that it is only doing its job and it will be pursuing BHS to try and claw back cash from its former owner.

Webb told Business Insider: "There is no question that they are forensically looking at BHS. They can't say a word about that."

UK politicians and the press criticised the Pensions Regulator after CEO Lesley Titcomb gave evidence to the Parliamentary inquiry into BHS' collapse.

BHS collapsed into administration last month with a pension deficit of up to £300 million ($436 million). There is now a row over whether former owner retail billionaire Sir Philip Green should help plug that gap.

Titcomb said she could not go into the details about what the Pensions Regulator was doing in relation to the BHS collapse because it has an open anti-avoidance case, meaning it is pursing legal action. This frustrated some MPs quizzing the watchdog.

But Webb, a former Liberal Democrat MP who was Pensions Minister from 2010 to 2015, told BI: "I'm sure they would love to have told the Select Committee all the things they're doing on BHS, what they've found out, what they think their prospects are and all the rest of it. I'm sure their lawyers have said if you do that, you jeopardise your chances of success.

"I used to get asked when I was a pension minister about Carrington Steel. That went on for years but eventually the Pension's Regulator got millions - they go into a pension fund."

The Pensions Regulator last January accepted an £8.5 million settlement from Russian steel maker Severstal over obligations to the Carrington Wire pension scheme. It first began action against Severstal in 2012.

What Titcomb could tell MPs at the BHS inquiry did not reflect well on the regulator either. She said it only learned of the sale of BHS last year for £1 in the newspapers, something which she was forced to clarify when challenged by Sir Philip in a letter to MPs. It turns out she was aware of sale proceedings but simply found out about the final deal in the news.

MPs also heard that the Pensions Regulator was aware of problems with the BHS pension plan as far back as 2012 but did little to tackle it.

Richard Fuller MP told Titcomb at one point: "You don't sound like much of a regulator?"

Webb told BI: "When one of the MPs told Lesley Titcomb, 'You're not much of a regulator are you?,' she said, 'We do what you give us the remit to do.' For example, she wouldn't have had the power to block the sale of BHS. Parliament didn't give her that power. That's not her fault, that is Parliament's fault if we think she should have that power."

Retail billionaire Sir Philip Green owned the department store until last year when he sold it to a three times bankrupt former racing driver for £1. There is now a row over whether Sir Philip should help meet the pensions shortfall and whether the sale was appropriate.

The BHS pension scheme has fallen into what's called the "Pensions Lifeboat" - the state-backed Pension Protection Fund (PPF) which will now fulfill obligations to members.

Some in the press, such as City AM, have suggested this is an "abuse" of the PPF. But Webb says: "This is not like 'oh gosh, fancy that happening!' This is a kind of 'business as usual,' in a way. Companies go insolvent, most DB [defined benefit pension] schemes are in deficit and there is going to be a flow of them into the PPF - it is designed on that basis. Each one is unwelcome but it is not a shock."

"A proportion of them will be big, it stands to reason. The little ones you don't hear about but from time to time a Woolworths or somebody will go to the wall and that is what happens."

Webb said as much in his submission to the joint Works and Pensions Select Committee and Business Select Committee inquiry into BHS' collapse, telling MPs that there are hundreds of "zombie" pension schemes out there that are simply maintaining their deficits and staggering towards the PPF.

Webb told BI: "Every case is unique and there are particular circumstances about every case. With BHS, the 23-year-recovery plan raises eyebrows shall we say. That is clearly at an extreme.

"But in general, a mixture of low interest rates, greater longevity etc., deficits are big and given the run of usual insolvencies in British business this is going to keep happening. There is no quick fix, clearly."