EMMA LEWELL-BUCK: New checks vital to avoid another BHS
As Philip Green sailed the Greek Islands in his new Â£100 million super yacht, it was heartbreaking to see the South Shields branch of his failed company BHS be amongst the first of the retail tycoon's stores to close its doors with the loss of at least 25 staff, many whom have been there since it opened just 11 years ago. Overall 11 stores in the North East will close putting the jobs of 550 employees at risk.
British Home Stores – a fixture on British high streets since the 1920s employed around 11,000 people before going into administration in April with a £571 million pension’s deficit, sparking an investigation by MPs into its demise.
Its owner, Sir Philip Green has now become the grotesque face of corporate greed and everything that is wrong with inequality and unfairness in the UK.
The damming report published this week by the House of Commons Work and Pensions Committee found that Philip Green and others were getting rich off the backs of their workers whilst leaving BHS on life support.
The billionaire businessman, and the chairman of Arcadia Group, a retail company that includes Topshop, Wallis, Evans, Burton, Miss Selfridge, and Dorothy Perkins, was criticised for running the high street business into the ground leaving 1000s of people without jobs and a pension black hole which the tax payer will be expected to fill if he doesn’t stump up.
Once heralded as the ‘King of high street’, Philip Green and his cronies’ reckless corporate behaviour has led to calls for him to be stripped of his knighthood which he was given in 2006 for services to retail. It is an insult to every employee that has lost their job and pension if he and his wife should keep their titles. The only service he will and should be remembered for is plundering his companies to fund his and his wife’s lavish lifestyles.
At the heart of this report is an unedifying portrayal of business in Britain. Philip Green and his family were too quick to take out wealth, drawing £243 million in dividends while little was spent on investment in the company. And this whole unseemly episode comes hot on the heels of another disgraced billionaire business tycoon, Mike Ashley whose business practices have been compared to those of a Victorian workshop.
All the City big hitters, Goldman Sachs, PWC, Deloitte, Grant Thornton were blamed for their assessment of Dominic Chappell as being a credible person to rescue the doomed company. The three times bankrupt former racing driver with no retail experience bought BHS for a £1 and ran the company into the ground whilst having his hand in the till.
In launching her campaign to be leader of her party and Prime Minister, Theresa May said that one way “to make our economy work for everyone is by getting tough on irresponsible behaviour in big business. The systematic failures shown by the downfall of BHS reveals the sheer scale of fundamental change required by a Government known for its unconditional support for free market economics.
Despite his promises to the select committee to make good the pension shortfall, Green is yet to put his hand in his pocket. His paltry £80 million offering comes nowhere near the £700m required to sort out the pensions mess.
This Government has failed to put in place the checks and balances to ensure business owners cannot run a company into the ground like this, leaving workers destitute.
If we want ethical capitalism – we need to see a significant cultural shift and real fairness including tackling tax avoidance to realise a fairer Britain which doesn’t just look after the few. But any changes to come out of this disgraceful debacle will be all too late for BHS’ 11,000 workers and 22,000 pensioners whose hard work and loyalty meant nothing to their fat cat boss.