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The new City minister with an eye offshore
Andrea Leadsom, Issue 1364
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GIVEN her record as an investment banker at Barclays de Zoete Wedd in the 1990s and then as a fund manager at Invesco Perpetual, Britain’s bankers will have been delighted with the appointment of Andrea Leadsom as City minister. Since becoming an MP in 2010, she has campaigned loudly against bonus caps and a financial transaction tax.

While it’s obvious where she’s coming from on banking, Leadsom’s financial interests impinge on another of her new ministerial responsibilities, too. She also assumes the brief for George Osborne’s “help to buy” scheme, currently boosting values of houses across Britain and thus of her own investment portfolio.

In 2003 the high-earning Leadsom and her husband Ben – also an ex-Barclays banker now running an algorithm-based trading company – set up Bandal Ltd to invest in £1m worth of buy-to-let properties in Oxford. Not long afterwards, in March 2005, the couple transferred 24 percent of their shares in the company to two trusts set up for the benefit of their children (the eldest of whom, having turned 18, replaced Andrea Leadsom as a director of the company just two months ago).

Offshore accounts
The purpose of this move is not entirely clear but such a step, taking assets out of the parents’ estates, was a common inheritance tax avoidance technique until the previous government blocked it a year after the Leadsoms’ transaction.

Perhaps more embarrassingly given her new boss’s avowed distaste for offshore accounts, charges over two of Bandal Ltd’s properties were created in favour of Kleinwort Benson (Channel Islands) Ltd, the Jersey outpost of the investment bank.

This has long been a private banking and wealth management (ie tax avoidance) operation, not a buy-to-let lender, raising the question of what offshore banking arrangements lie behind the Leadsoms’ use of it when plenty of mainland banks would have funded the high-flyers’ investments.

Indeed, large chunks of the debt funding the property investments (and now the bulk of the company’s borrowing) have been reported in the company’s accounts to be repayable in less than a year, when conventional buy-to-let lending is over a far longer timescale.

Leadsom failed to respond to the Eye’s questions on these matters, leaving if nothing else the impression that despite his protestations of clamping down on Britain’s many financial excesses, Osborne has given the Treasury’s City brief to a wealthy ex-banker who uses trusts to reduce her tax bill and offshore accounts to exploit a booming property market.

More top stories in the latest issue:

LIBERAL VALUES
The family of Cyril Smith may moan about recent attacks on his reputation – but the Eye first detailed his sexual assaults on children a full 35 years ago.

PUBLIC ROGERING
The refusal to name banks who got rich quick on Royal Mail is backed by the Shareholder Executive’s Roger Lowe – late of Lazard, which helped price the sale.

BAGLEY’S BAGGAGE
The troubled Co-op bank turns for advice to David Bagley – who had to resign as HSBC compliance chief after it enabled Mexican drug lords to launder their loot.

IT’S THE GAS-MANDY!
Peter Mandelson puts his hand up as the man who could save the day (and earn a bob or two perhaps) if the EU tries to block Gazprom’s new pipeline to southern Europe.

SCOTLAND AHOY!
Why the two new aircraft carriers being built, currently too big for Portsmouth, may have to be maintained and repaired back in Scotland.

HEALTH CHEQUES
The head of health regulator Monitor tells MPs that reform in an NHS driven by competition means more work for management, not clinical, consultants.

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Next issue on sale:
29th April 2014.
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For all these stories you can buy the magazine or subscribe here and get delivery direct to your home every fortnight.
Next issue on sale: 29th April 2014.

Private Eye Issue 1363
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