All in it together: George Osborne’s family business reveals big losses

This blog post was also published as an article in the Guardian. 

For AccessDocs, I am also uploading the PDF files of Osborne & Little’s full accounts – here (2011) and here (2010). Please do get in touch if you spot anything interesting that I’ve missed! 

George Osborne’s family business has made a loss of nearly three-quarters of a million pounds, the third year in a row it has announced a deficit.

The upmarket fabrics and wallpaper company Osborne & Little, which is chaired by the chancellor’s father, Sir Peter Osborne, made a pre-tax loss of £739,000 in the last financial year. That followed a loss of £150,000 the year before, and a £7.5m loss in the preceding 12 months. George Osborne has a 15% stake in the family firm.

A series of cutbacks have been made by the firm since 2009, but financial losses have deepened.

The company has made workforce cutbacks, with £538,000 saved from salary payments over three years. However, the directors have only taken a small reduction and have kept their combined salaries at more than £1m. Political donations by the firm were axed in 2011, following a donation of £3,500 last year. Company pension contributions have also dropped, by £80,000 since 2010.

Losses have forced the company to increase its borrowing by almost £1m, bringing its net borrowing position to more than £2m. The latest accounts, published by Companies House, blame the financial losses on an increase in the cost of raw materials. The report said: “With overheads being maintained at prior year levels, the loss for the year was a direct consequence of the falling margins.”

The company, which was set up by Sir Peter Osborne and his brother-in-law Anthony Little in 1968, has a turnover of almost £23m. It says that 46% of its sales are made outside Britain, including 35% to continental Europe.

The chancellor’s mother, Lady Felicity Osborne, was appointed as a director of the firm last year, with her husband.

George Osborne has previously spoken proudly about the family business: “It’s been a part of my family for the whole of my life. I was always aware as a child when things were going well and when things weren’t going so well, so it’s given me a strong understanding of what’s involved in running a business – the risks, the hard work and the commitment.”

A company review of its finances said that tough economic times will continue: “Market conditions continue to be challenging in the current economic climate and there is little sign of this changing in the near future.” But it insisted: “The company is well placed to take advantage of any improvement in its principal markets and will continue to focus on cost control.” Osborne & Little were contacted but did not comment on its finances.

The financial losses are a further blow to the firm, which was reported to the Office of Fair Trading (OFT) this year over allegations of price fixing. A complaint was made to the regulator claiming that the firm had illegally blocked discounts for luxury products. It was also accused of trying to bully other company directors. The OFT refused to comment on the case but the allegations are believed to have now been dropped.