The Tax Haven Twins Panorama

This is a Panorama that should never have been made,

reported by "A liar, a bully, a drunkard,

"out of control and out for revenge."

That's me they're talking about.

At least, that's what I'm accused of by these billionaire twins.

They own the paper that investigated MPs' expenses.

So why do they hate it when the spotlight is turned on them?

If you can hand it out, then you ought to be able to take it.

I think that's the rule of thumb.

The Barclay twins do not pay personal tax in this country,

so why is one of their companies claiming a billion pounds

from the British taxpayer?

I think it's absolutely outrageous.

These are incredibly wealthy men who don't pay British tax.

And they've got a private island,

so why is there so much trouble with the neighbours?

I felt the best thing to do would be

to get as far away from them as possible.

Every day I just feel, you know, just not happy.

You know, not like I used to. It is very upsetting.

We're just approaching Brecqhou from the south.

This is the story of two billionaires

who bought their own private island.

Identical twins who've built a castle.

It's strictly private

so I am not allowed to land anybody on the island.

They've entertained David Cameron

and George Osborne in their extraordinary home.

-Six cannons on the top wall.

-Right.

-If you see a puff of smoke, duck.

THEY LAUGH

They've built a business empire from scratch

and given millions to charity.

But you may never have heard of them,

because Sir David and Sir Frederick Barclay are notoriously secretive.

Thanks, mate.

And that's odd,

because they own the Daily Telegraph,

Britain's biggest-selling broadsheet.

A lot of press barons don't like publicity, they shy away.

But if you were to sort of create a scale of reclusiveness,

right at the zenith would be the Barclay brothers.

They are the most reclusive, the most litigious and therefore,

I think, the most difficult to understand.

The Telegraph exposed the MPs' expenses scandal.

Great journalism,

though the paper published lots of personal stuff

about our politicians too.

Tonight at ten -

now Conservatives brace themselves for embarrassing revelations.

Six senior Tories are under fire for their expenses.

Their leader says it's time to apologise.

The expenses scandal did the Telegraph a world of good.

The twins did not go to the High Court

for the Leveson Inquiry into the press.

But Sir David's son did a turn.

Our last witness this afternoon is Mr Aidan Barclay.

Thank you very much indeed.

Aidan Barclay manages the Telegraph

and he sups with those who hold power -

Tony and Cherie, two private dinners.

Gordon and Sarah, six.

Dave and Samantha, three.

The driving principle for me

is that the editor should follow his readers,

because that's what's more likely

to make the Telegraph or any newspaper a success.

Aidan told Leveson that it was the media's job

to scrutinise those in positions of influence and power

and to report in the public interest.

We think he's got a point.

I am going to scrutinise two men who,

we think, hold positions of power and influence.

They are Aidan Barclay's father, Sir David Barclay,

and his uncle, Sir Frederick Barclay,

the owners of the Daily Telegraph.

We think it's in the public interest.

But it won't be easy,

because the Barclays defend their reputation fiercely.

There aren't many Tory politicians who will talk about the twins.

This one will.

-Oh!

-Nadine Dorries is no stranger to bad publicity.

-You've got to say the words.

-I'm a celebrity, get me out of here.

-OK, let's get you out.

Ah! Ah! Get me out!

The MP's had her fair share of negative headlines in the Telegraph.

She thinks the Barclays should put up with scrutiny too.

Being owners of a major newspaper puts them in the public eye

and makes them public figures.

You can't demand

that as somebody as high-profile as owners of a newspaper

that you are entitled to privacy,

because I don't believe you are.

What's deeply ironic about powerful press barons who, after all,

make a lot of money invading other people's privacy,

is how protective they are of their own privacy.

It leaves people like the Barclay twins less scrutinised

than people of equal power and wealth in other walks of life.

The twins say they are still entitled to privacy

and they've never objected to media scrutiny.

So let's scrutinise this.

A £35 million mansion,

a stone's throw from Buckingham Palace.

When you or I buy a house, we do so in our own name.

But this mansion is registered in the name

of a company based in the British Virgin Islands, a tax haven.

Why on earth would anyone want to do that?

Well, if you are a family of great wealth, like the Barclays,

there's one possible advantage for future generations.

They won't pay inheritance tax if it's owned offshore.

Because you only pay inheritance tax on your UK-based assets.

The house is now not in the UK for legal purposes.

It's outside inheritance tax.

If you pay £35 million for the house,

and inheritance tax is at 40%,

that saves you £14 million in tax straightaway.

Around the block, there's more Barclay family property.

It cost £21 million, and once again, it's owned

by a company in the British Virgin Islands.

The twins say they've never been involved

in any tax avoidance scheme.

Their lawyers say...

Avoiding tax via the offshore route would be perfectly legal,

but would it be morally acceptable?

The Chancellor might not think so.

He's already described aggressive tax avoidance as morally repugnant.

And Number 10 has given one tax avoider a good kicking.

I'll make a statement later on, if that's OK.

The comedian Jimmy Carr.

He's taking that money and stuffing it into something

where he doesn't have to pay taxes. That is not fair. That is not right.

So how do Dave and George feel about the Barclay family

placing these London properties offshore?

The Prime Minister and the Chancellor declined to comment.

The twins left London for Monaco 23 years ago.

They deny it's a tax haven

and they say their charitable donations far outweigh

what they would have paid in tax if they'd stayed in the UK.

Their lawyers point out

that they've made a very significant contribution

to the British economy.

The Barclays bought this little B&B in '95.

It's also ultimately owned offshore.

Welcome to the Ritz, one of the most expensive hotels in London,

and you would have thought,

a nice little earner for the British taxman.

But somehow it doesn't quite work out like that.

I've looked at the accounts of the Ritz for 17 years.

This is fundamentally a profitable business before interest is paid.

But they've not paid any tax at all

to the UK government during that period.

Not a penny.

Avoiding corporation tax in this way is perfectly legal, but is it fair?

Aidan Barclay told us that the company hadn't paid any dividends,

and profits from the Ritz had been reinvested.

According to Sir David, it's nothing to do with the twins.

He says they retired more than 20 years ago because of his ill-health.

But our evidence shows the UK companies are controlled

by offshore trusts set up by the twins

and that one of the brothers attends trust meetings.

These meetings are taking place in Monaco.

But there is no doubt that sitting right in the middle of the meeting

are the Barclay brothers,

who are, therefore, able to exercise control of these companies.

The Barclay offshore trusts also control the Daily Telegraph

and the catalogue outfit Littlewoods.

# My lovely, lovely mother... #

It's another company that has history with the taxman.

Littlewoods went to court and won a VAT refund plus interest

worth almost half a billion pounds.

You might have thought that billionaires

who do not pay tax in this country

would be happy with a payout of £472 million

from the hard-pressed British taxpayer.

You'd be wrong.

The Barclays are hoping for an extra billion pounds in compound interest.

Compound interest isn't normally paid on VAT claims.

So Littlewoods is taking the government to court

in a test case to get that extra billion.

If they win that case,

then a whole raft of other cases,

who knows how many billions of pounds of money,

will have to be repaid to other people as well.

So we're talking about something

which could massively increase UK government debt,

all for the sake of enriching a company

that is operated from offshore tax havens.

For the Barclay family, it's a matter of tax justice.

The original VAT claim was lodged

before they took over the business in 2002.

Sir David said...

So the Ritz has paid no corporation tax for 17 years,

but Littlewoods is seeking a billion quid from the taxman.

I think it's absolutely outrageous.

These are incredibly wealthy men who don't pay British tax,

who live in their tax haven island.

I think it's just utterly appalling.

David Cameron, George Osborne and I have one thing in common.

We've all been to Brecqhou.

The difference is,

I wasn't invited to the twins' little holiday home

in the Channel Islands.

It was way back when I had hair.

Well, sort of.

The castle was being built, and shortly after this was filmed,

I trespassed onto their island.

I then made a mistake while talking about the story on Radio Guernsey

and the twins took me to court for libel in the UK and France.

The BBC paid damages and I apologised.

The Barclays say I should not be making this Panorama

because I have a history of making misleading, fabricated

and libellous statements about them.

They say I am malicious and out for revenge,

a liar acting as judge and executioner.

I'm not going to Brecqhou today, but to the island next door,

its big sister, Sark.

So help me with the geography.

This is Sark.

This is Brecqhou over here.

They're so close together. I mean, how big is that gap?

It's actually, it's not that far apart. It's only 80 yards.

A tiny statelet and a tax haven,

Sark is home to just 600 people.

Funnily enough, I'm not the only person around here

who's heard from the Barclays' lawyers.

Sark's postmistress put up a Private Eye article

about the twins in her shop.

She was accused of libel and forced to apologise.

So was gardener Joe Birch.

The flowers look lovely!

And retired hotelier Richard Dewe.

Hello!

Sark's judge, Reg Guille, had to apologise twice.

Lovely weather.

Oh, not bad for this time of year at all.

The Barclays' lawyers told us...

One local lawyer offered to defend people for free.

They feel that they have to be very careful about what they say.

Otherwise they may be sued.

I think that understandably

puts people under a lot of stress.

The island is a bit of a time warp.

Cars are banned, so you have to find other ways of getting about.

And some of the laws are old-fashioned too.

The island is owned by the Queen

and leased to her representative, the Seigneur.

Until four years ago, Sark was feudal.

The Seigneur used to collect a personal tax on property sales.

So when they bought Brecqhou,

the Barclays had to pay him £180,000.

They were polite, reasonable,

they didn't stand out in any way other than the fact

that they were identical twins,

dressed in identical clothes.

But the friendliness did not last long.

The twins wanted their money back.

I remember I received a writ

to appear before the court in Guernsey

to say that Brecqhou was not part of Sark.

After a four-year battle, the Barclays dropped their case.

Brecqhou IS part of Sark.

But their lawyers are still challenging the island's laws.

This is Chief Pleas,

the only Parliament in the world with the keys left behind the door.

The Barclays twins aren't very happy about the laws

that have been passed in this small room.

They've been to the Guernsey Court twice, the Appeal Court in London

and the Supreme Court.

They've launched three judicial reviews,

taken two cases to the European Court Of Human Rights.

Oh! And they've petitioned the Queen seven times.

The twins say all the legal proceedings...

The old feudal system was unfair

and the Barclays did help bring the first democratic elections

to the islands.

But the twins say it's not a proper democracy

and their legal onslaught continues.

I've got a pile of letters this thick

from their advocate in Guernsey.

And, of course, there's always this feeling that if you step out of line,

you're going to get sued, taken to court,

or if we pass laws here, in the Chief Pleas,

suddenly, they're petitioned.

The twins say that the Seigneur retains feudal power,

and like many on Sark,

has profited from multiple offshore directorships.

BICYCLE BELL RINGS

They also point out that they've given money

to three local charities,

which is true.

Up to a point.

The largest donation by the Barclay twins

was the £200,000 towards the island's spanking new hall.

Very generous.

But after the hall was built, the Barclays demanded their money back.

The hall has a licensed bar and the twins wanted it closed,

because, they said, it was too close to the island's school.

When the trustees refused, they were taken to court.

The trustees, who are ordinary folk,

were sued jointly and severally,

each one potentially liable for the whole amount,

some £200,000.

And I remember one of the trustees came up to me in tears.

The Barclays eventually lost,

but the trustees say they were put through two years of hell.

Had we lost the case,

it meant I would lose my home in order to settle the debt.

The stress was unbelievable

and the relief afterwards

was absolutely incredible,

when we actually got there.

The Barclays have created jobs by investing £30 million on Sark.

Their businesses are run by this man, Kevin Delaney.

A trusted lieutenant,

Mr Delaney shares many of the Barclays' views about the island.

He also has a business of his own, publishing a parish paper.

Mr Delaney says the Sark Newsletter campaigns for true democracy.

This is certainly an important one,

because it introduced the concept

that Sark was comparable

to Germany in the late 1930s under Hitler.

I think it's very intimidating to people.

They're frightened of being mentioned in it and vilified in it.

If you believe the Newsletter,

Sark is ruled by some pretty nasty people.

The former headmistress has a "lust for power"

and runs a "Stalin-like dictatorship".

I choose not to read the Newsletter now

because it raises my blood pressure.

I think there are things that are very difficult to justify.

An island farmer has "no compassion or sense of shame"

and is an "intensely disliked and unpleasant man".

The thing was, you know,

I didn't feel that I was disliked to such a degree.

And, you know, I've lived on the island all my life.

I know everybody in Sark.

It did hurt - it hurt for a long time.

And a local artist has been accused

of failing to account for public money.

The stress, you know, is obviously having an effect on me.

Every day, I just feel just not happy, you know.

Not like I used to.

So it's really, it is very upsetting for people like me

who just want... I wish they'd just stop it -

stop the Newsletter, stop with the bullying

and let us live in peace.

But the real poison is reserved for an 84-year-old man, the Seigneur.

When the Seigneur's wife suffered a stroke,

the Newsletter castigated the way she was treated.

It accused the Seigneur and Sark's doctor of wilful negligence.

The most upsetting part for me

was the fact that, in a time of great tragedy,

the family were being, uh...were being treated very badly.

What we're talking about is

the husband of a lady who's suddenly become critically ill,

and I found it extremely upsetting

that an opportunity, as far as I believe,

was being taken to attack a man

when he's already so worried about his wife.

I'm afraid to say it was just a pickle.

I mean, I thought it was actually disgraceful.

It's, uh... Just treated with utter contempt, quite frankly.

Over the past couple of years,

Mr Delaney's relationship with the Barclays

has been repeatedly raised here in Chief Pleas.

Sark's politicians say he wouldn't be able to publish the Newsletter

against his employers' wishes.

Surely the twins could stop it,

if they wanted to.

When we put this to the Barclays, their lawyers said...

The Barclays say the Newsletter is nothing to do with them,

but islanders remain unconvinced.

They say the Newsletter targets those who oppose the twins.

It makes foul allegations about people

and doesn't ask for their side of the story.

Well, they usually ask me, "Can I sue?"

And I say, "You can,

"but my advice is that you don't,

"because you can't afford to."

Libel is a rich man's legal remedy.

Mr Delaney denies that the Newsletter is defamatory

or that it targets people who oppose the Barclays.

He says HE is the victim of harassment

and that the Newsletter campaigns to stop bullying

by the feudal establishment.

I dropped by his office to pick up a copy.

Hello, hi.

Have you got some copies of the Newsletter?

I don't, unfortunately, cos it's not printed up here.

-Oh, I see.

-Um...

This is how he described my behaviour in a letter

copied to the Chairman and Director-General of the BBC.

-Some of the hotels might have them.

-Smashing.

-Smashing.

-I can probably get some up here for you.

No, no, no. I don't want to inconvenience you.

-Thank you.

-All right, pleasure.

-Cheers, bye-bye.

-Bye-bye.

So much for the accuracy of Mr Delaney's Newsletter.

This really is a very strange place.

HE CHUCKLES

There does seem to be a man in the bushes up there.

It's possible we're being spied on.

Get that? Over there.

And now he's just gone.

Are we being spied on?

It seems that we're being followed by one of Kevin Delaney's minders.

-Good afternoon!

-Hello!

We just stopped for a cup of tea

and the same man who'd been following us at the cliff top

has been spotted lurking in the shrubbery behind me.

When we head back to the main street,

he's waiting for us again.

The same bloke in four separate locations.

We go to the harbour

and guess who turns up?

Mr Delaney's minder.

So I ask him, "What's he up to?"

Yes.

Yes, absolutely.

Yes.

Why?

'So it's a coincidence that we bumped into him

'five times in four hours.'

Is he?

Oh, I'm... That's what I know.

-Very good.

-OK?

-Very good, well done. Thank you.

His boss, Kevin Delaney, said I was a drunkard,

boorish, oafish,

a disgrace to journalism,

pursuing a twisted and warped agenda.

He declined our request for an interview.

HE SIGHS

The island's doctor has had enough of Mr Delaney

and he's fed up with the Barclay twins.

He's left Sark for good.

I felt that, with their enormous wealth,

that, really, the best thing to do

would be to get as far away from them as possible.

The twins also declined to be interviewed.

They said my questions were defamatory,

bullying, intimidating, stressful

and amounted to interrogation by the state.

But the Telegraph raises questions much like ours all the time.

I think when you own a newspaper group,

then I think it ill-behoves you to hide away.

I think that you, you have to understand that...

OK, you don't want to be a public figure,

but by the very virtue of your newspaper ownership, you are.

The twins say they won't be judged by me

and that the outcome of this programme will be settled

in the courts of the UK, France and Monaco.

This is a family of great power who are used to getting their own way.

If you're invading other people's privacy,

and reporting in a way which means

delving into the private lives of other people,

then I think you have to take it on the chin, you have to suck it up and take it on the chin yourself.

The last thing we want is a legal battle with billionaires,

but we think this programme IS in the public interest.

In the words of Aidan Barclay,

"It's our job to scrutinise those in positions of influence and power."

And surely that includes the owners of our national press.

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