Holding the powerful to account

This summer, the joint work and pensions/business, innovation and skills parliamentary select committee inquiry into the collapse of British Home Stores and its pension scheme concluded with one of the most devastating reports to come out of the select committee process. The report described  the ‘systematic plunder of BHS at the cost of the 11,000 jobs and 20,000 people’s pensions’, and found ‘Sir Philip Green, Dominic Chappell and respective directors, advisers and hangers-on, who all got rich or richer, are all culpable’. We concluded that this was ‘the unacceptable face of capitalism’.

Last month, Parliament debated our report, with a specific proposal put forward that Green should be stripped of his knighthood. Opposition came there none. Yet while symbolic gestures such as this have their place – why should society honour people whose behavior falls so far short of acceptable? – surely the top priority should be to do right by those who lost most. The BHS pension fund was left with a £571m shortfall as BHS finally folded, and the impact of that is felt by individuals and families who relied on their employer for their income in retirement. After all, as I argued in my contribution to the debate, pensions contributions are not acts of charity, but deferred pay for past and present employees.

Green, giving evidence to us in parliament in the summer, told us he would sort the problem out. With Christmas fast approaching, and thousands of ex-staff still living in uncertainty, nothing has been resolved. So we welcome the recent news that the pension regulator has confirmed that enforcement action has begun. Notices have been sent to Green, to Chappel, the man to whom BHS was sold for £1 shortly before the final collapse of the business, and the former BHS parent company, Taveta Investments.

Absolutely rightly, the pensions regulator chief executive Lesley Titcomb has made clear the intention to’“make significant progress by the end of 2016′ saying ‘Our decision to launch enforcement action is an important milestone in our work to attain redress for the thousands of members of BHS schemes who have been placed in this position through no fault of their own’.

Unfortunately there has been all too little evidence that the problem can be resolved without a credible threat of enforcement. All through our inquiry, we saw and heard those responsible for the BHS debacle shift responsibility and blame each other. Handwringing and warm words signalling the best of intentions for the future now mean nothing unless they are backed up by hard cash into the pension fund. The men and women whose (for the most part low-paid) hard work made the good times roll for Green and others over the last fifteen years, deserve nothing less. But the determination to act sends a much wider message too. With times increasingly tough for millions of people, the rich and powerful must know that they too will be held to account where their greed and irresponsibility cause the kind of harm we saw in the sorry tale of BHS. Rewards are rightly there for entrepreneurial dynamism and risk-taking in business. But when the rewards all seem to go to the individual but the costs of failure are passed on – whether to workers and pensioners, to more responsible businesses paying in to the pension protection fund, or to the public purse, it is time to act. BHS is a good place to start.

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Karen Buck is member of parliament for Westminster North and sits on the work and pensions committee. She tweets @KarenPBuckMP

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Comments: 3...

  1. On November 12, 2016 at 10:41 am Verity responded with... #

    I for one am so very grateful for the work of contributors such as this, but what always comes back to me every time a fault like this comes to mind is that so much of the ways of doing business in the UK was reinforced during the ‘New Labour’ years. There was always plenty of time and energy spent on the need for the rest os us to do more but the structural faults in society were so relentlessly overlooked. There are many voters who have incorporated this into their consciousness that they no longer listen to what we have to say.

  2. On November 12, 2016 at 10:52 am Alf responded with... #

    We can’t go on being Tory-lite as regards these people. They should pay their taxes!

  3. On November 12, 2016 at 1:22 pm wayne green responded with... #

    We have seen over many years the issues with the unbalanced processes within the global systems and national system regarding the role of law within business. For example, Polly Peck and the media tycoon Maxwell. Again, one could suggest that the role of business is to subvert the rules to seek to maximize your business. What is really required in the first instance id to be bold with Mr. Philip Green and in the first instance the goverment should freeze all his assets straight away. As he is also offshore as advised by his accountants and legal experts, seek to take away his British sovereignty and then start legal actions to recoup the loss. This way one sends a clear message to him and many like him that he has to comply and work with others in a ethical moral and balanced way. Is it really a unbalanced system when we see those unwaged in misery on £74 a week and others with billions who really do not care and see themselves beyond and above systems and structures. I sure even if you look as the nice guy R.Branson, you will find economic and financial tactical maneuvering to take advantage of the system for profit. It looks to me a very unbalanced society and system indeed. Im not againdt profit making, but Profit should be for a noble cause to be used to be put back into society. We also see how Philip Green also used the system to start up a company in his wife’s name then rent the properties to that company and profit from this also. Close him down and send a clear message. We need political courage.

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