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BHS administration: Labour MP says Sir Philip Green could lose knighthood - live updates BHS administration: Labour MP says Sir Philip Green could lose knighthood - live updates
(35 minutes later)
12.52pm BST
12:52
It’s official: high street tailor Austin Reed has followed BHS into administration.
The move leaves around 1,100 workers facing redundancy. Administrators are hoping to sell the company as a going concern, so the stores are staying open for now.
Here’s the full story:
Related: Upmarket tailor Austin Reed goes into administration
The company is offering some chunky discounts today....
"Shop before it's too late", says Austin Reed's website https://t.co/ROxdHlGBh6 pic.twitter.com/kT98WB9c3n
12.23pm BST
12:23
Bad news for BHS: property agents have warned that a quarter of its high street stores would be hard to let to new tenants, while only 8% are in ‘prime’ locations.
That undermines the chances of a white knight buyer snapping up the whole company, argues Joanna Bourke of the Evening Standard. More here.
More than a quarter of BHS stores would "struggle" to be let in current property market, @CushWakeUK numbers show https://t.co/URjDtRQWEy
12.18pm BST12.18pm BST
12:1812:18
John Mann’s call for Sir Philip Green to lose his knighthood, unless he hands back £400m of dividend payments, puts more pressure on the Arcadia boss.John Mann’s call for Sir Philip Green to lose his knighthood, unless he hands back £400m of dividend payments, puts more pressure on the Arcadia boss.
Julie Palmer, regional manager at business restructuring specialists Begbies Traynor, says it is becoming an issue of fairness and morality, not just legality.Julie Palmer, regional manager at business restructuring specialists Begbies Traynor, says it is becoming an issue of fairness and morality, not just legality.
She told the BBC earlier today that:She told the BBC earlier today that:
“[Sir Philip] is an astute businessman, I imagine he was advised and that all of that was done properly. There’s a moral issue that if we are facing a pensions deficit of £571 million do we look beyond the boundaries of legality at propriety instead? I understand he already is in discussions to make a voluntary payment which suggests he is aware.“[Sir Philip] is an astute businessman, I imagine he was advised and that all of that was done properly. There’s a moral issue that if we are facing a pensions deficit of £571 million do we look beyond the boundaries of legality at propriety instead? I understand he already is in discussions to make a voluntary payment which suggests he is aware.
“I don’t think the administrator will [bring moral pressure into it] but there are MPs already on the case. There are calls about whether he should be able to keep his knighthood. That’s all part of the pressure that is beginning to build.”“I don’t think the administrator will [bring moral pressure into it] but there are MPs already on the case. There are calls about whether he should be able to keep his knighthood. That’s all part of the pressure that is beginning to build.”
Via the Independent.Via the Independent.
11.48am BST11.48am BST
11:4811:48
Cameron visits Port Talbot steelworksCameron visits Port Talbot steelworks
Breaking away from BHS again, Prime minister David Cameron is making a surprise visit to the troubled steelworks in Port Talbot, South Wales, today.Breaking away from BHS again, Prime minister David Cameron is making a surprise visit to the troubled steelworks in Port Talbot, South Wales, today.
BREAK: PM David Cameron to visit steelworkers in Port Talbot shortly. Avoiding fire of #doctorsstrike but still into the furnaceBREAK: PM David Cameron to visit steelworkers in Port Talbot shortly. Avoiding fire of #doctorsstrike but still into the furnace
BREAK David Cameron is Port Talbot now meeting unions and Tata management with Welsh Secretary Alun Cairns. Sajid Javid is not there.BREAK David Cameron is Port Talbot now meeting unions and Tata management with Welsh Secretary Alun Cairns. Sajid Javid is not there.
More than 4,000 jobs are still at risk at the Port Talbot side, following Indian conglomerate Tata’s decision to sell up.More than 4,000 jobs are still at risk at the Port Talbot side, following Indian conglomerate Tata’s decision to sell up.
The government is offering to take a 25% stake in the steelworkers, plus debt relief, in an attempt to find a buyer. Cameron’s visit may be designed to show that Westminster hasn’t forgotten about the steel crisis.The government is offering to take a 25% stake in the steelworkers, plus debt relief, in an attempt to find a buyer. Cameron’s visit may be designed to show that Westminster hasn’t forgotten about the steel crisis.
As it happens, there’s a BHS store up the coast in Swansea - perhaps the PM could pop in there afterwards and offer workers his support....As it happens, there’s a BHS store up the coast in Swansea - perhaps the PM could pop in there afterwards and offer workers his support....
11.28am BST11.28am BST
11:2811:28
MPs to investigate BHS pension issuesMPs to investigate BHS pension issues
The House of Commons Work and Pensions Select Committee has announced an inquiry into BHS’s pensions deficit.The House of Commons Work and Pensions Select Committee has announced an inquiry into BHS’s pensions deficit.
The committee will examine how the UK’s Pension Protection Fund will cope with BHS’s £571m pension deficit.The committee will examine how the UK’s Pension Protection Fund will cope with BHS’s £571m pension deficit.
The PPF steps in when a company cannot handle its pension liabilities, and is funded by levies on other pension schemes. So BHP’s costs willThe PPF steps in when a company cannot handle its pension liabilities, and is funded by levies on other pension schemes. So BHP’s costs will
Committee chair Frank Field says the BHS crisis has raised serious questions:Committee chair Frank Field says the BHS crisis has raised serious questions:
“We need as a Committee to look at the Pension Protection Fund and how the receipt of pension liabilities of BHS will impact on the increases in the levy that will now be placed on all other eligible employers to finance the scheme.“We need as a Committee to look at the Pension Protection Fund and how the receipt of pension liabilities of BHS will impact on the increases in the levy that will now be placed on all other eligible employers to finance the scheme.
We will then need to judge whether the law is strong enough to protect future pensioners’ contracts in occupational schemes.”We will then need to judge whether the law is strong enough to protect future pensioners’ contracts in occupational schemes.”
Yesterday, MPs on all sides of the House of Commons expressed concern over the BHS crisis, particularly the pensions issue.Yesterday, MPs on all sides of the House of Commons expressed concern over the BHS crisis, particularly the pensions issue.
Conservative MP Steve Baker argued that the free market was seriously undermined when vast profits are privatised, and then similarly larges losses are swiftly dumped on taxpayers or pensioners.Conservative MP Steve Baker argued that the free market was seriously undermined when vast profits are privatised, and then similarly larges losses are swiftly dumped on taxpayers or pensioners.
And fellow Tory Richard Fuller said dumping pensions obligations on others was “the unacceptable face of capitalism”.And fellow Tory Richard Fuller said dumping pensions obligations on others was “the unacceptable face of capitalism”.
UpdatedUpdated
at 12.11pm BSTat 12.11pm BST
11.21am BST11.21am BST
11:2111:21
Sir Philip Green has not enjoyed reading today’s newspapers:Sir Philip Green has not enjoyed reading today’s newspapers:
Oh dear, looks like @DailyMirror has annoyed Philip Green. He's just told our biz ed that he plans to wipe his a*se with today's copy...Oh dear, looks like @DailyMirror has annoyed Philip Green. He's just told our biz ed that he plans to wipe his a*se with today's copy...
What did the Mirror do to earn such shocking opprobrium?What did the Mirror do to earn such shocking opprobrium?
Well, today’s edition describes Green thus:Well, today’s edition describes Green thus:
He’s the epitome of a self-made man or, depending upon your point of view, an icon of unmitigated greed. A foul-mouthed, tough-talking billionaire whose number-one aim is making money, and woe betide anyone who gets in his way.He’s the epitome of a self-made man or, depending upon your point of view, an icon of unmitigated greed. A foul-mouthed, tough-talking billionaire whose number-one aim is making money, and woe betide anyone who gets in his way.
Later adding.....Later adding.....
When he turned 50, his wife Tina reportedly gave him a solid gold Monopoly set. He celebrated the birthday by flying 200 pals to Cyprus for a lavish toga party, with Tom Jones entertaining them.When he turned 50, his wife Tina reportedly gave him a solid gold Monopoly set. He celebrated the birthday by flying 200 pals to Cyprus for a lavish toga party, with Tom Jones entertaining them.
Green himself was dressed, according to business journalist Jeff Randall, as “a physically challenged Nero”. And for his 60th, he flew 150 guests to Mexico, allocated each 15 bottles of Pol Roger – worth £250 each – and had Stevie Wonder and the Beach Boys perform.Green himself was dressed, according to business journalist Jeff Randall, as “a physically challenged Nero”. And for his 60th, he flew 150 guests to Mexico, allocated each 15 bottles of Pol Roger – worth £250 each – and had Stevie Wonder and the Beach Boys perform.
Here’s the full story: BHS boss Philip Green built his empire on cost-cutting and ruthless dealsHere’s the full story: BHS boss Philip Green built his empire on cost-cutting and ruthless deals
10.49am BST10.49am BST
10:4910:49
Here’s a reminder of just how much money the Greens received from BHS during their 15-year ownership:Here’s a reminder of just how much money the Greens received from BHS during their 15-year ownership:
10.24am BST10.24am BST
10:2410:24
Labour MP: Green Must Repay BHS Dividends or Lose KnighthoodLabour MP: Green Must Repay BHS Dividends or Lose Knighthood
Labour MP John Mann has called for Sir Philip Green to be stripped of his knighthood, unless he returns the dividends paid to his family from BHS.Labour MP John Mann has called for Sir Philip Green to be stripped of his knighthood, unless he returns the dividends paid to his family from BHS.
Mann argues that Green should hand back the £400m which he received from BHS, to help cover the £571m pension black hole.Mann argues that Green should hand back the £400m which he received from BHS, to help cover the £571m pension black hole.
In a statement, Mann says:In a statement, Mann says:
“Sir Philip Green and his family have made millions out of BHS and its hard working staff. He took over a company with a healthy pension pot, yet when he sold BHS a black hole had appeared in its fund.”“Sir Philip Green and his family have made millions out of BHS and its hard working staff. He took over a company with a healthy pension pot, yet when he sold BHS a black hole had appeared in its fund.”
“Sir Philip Green has taken over £400 million out of the company and now must be held responsible for the actions that were taken under his stewardship.”“Sir Philip Green has taken over £400 million out of the company and now must be held responsible for the actions that were taken under his stewardship.”
“There is a very simple and honourable solution to this crisis; repay the dividends, live up to the name he has chosen for his new yacht, ‘Lionheart’, or lose his knighthood.”“There is a very simple and honourable solution to this crisis; repay the dividends, live up to the name he has chosen for his new yacht, ‘Lionheart’, or lose his knighthood.”
It’s rare to see a Labour MP agree with the Daily Mail, but on this issue Mann is in complete agreement with the mid-market paper (see earlier post).It’s rare to see a Labour MP agree with the Daily Mail, but on this issue Mann is in complete agreement with the mid-market paper (see earlier post).
A simple & straightforward way to deal with the BHS crisis, Sir Philip pays up or loses his knighthood. https://t.co/heJJKXKgoqA simple & straightforward way to deal with the BHS crisis, Sir Philip pays up or loses his knighthood. https://t.co/heJJKXKgoq
UpdatedUpdated
at 10.53am BSTat 10.53am BST
10.18am BST10.18am BST
10:1810:18
The pound hit a 10-week high this morning, as bookmakers slash the odds of Britain remaining in the European Union.The pound hit a 10-week high this morning, as bookmakers slash the odds of Britain remaining in the European Union.
Sterling has gained almost a cent against the US dollar, to $1.457, as traders anticipate that the Remain campaign will win the June 23 referendum.Sterling has gained almost a cent against the US dollar, to $1.457, as traders anticipate that the Remain campaign will win the June 23 referendum.
Client from Southend has staked £6000 on Brexit, but Remain now a shortest yet 1/4 to be outcome of EU Ref, with Brexit longest yet 3/1.Client from Southend has staked £6000 on Brexit, but Remain now a shortest yet 1/4 to be outcome of EU Ref, with Brexit longest yet 3/1.
9.42am BST9.42am BST
09:4209:42
Another high street name, fashion retailer Austin Reed, is collapsing into administration this morning.Another high street name, fashion retailer Austin Reed, is collapsing into administration this morning.
Revealed: Austin Reed to call in AlixPartners as administrator this morning, risking 1000 more British high street jobs. Full story up soon.Revealed: Austin Reed to call in AlixPartners as administrator this morning, risking 1000 more British high street jobs. Full story up soon.
The announcement could come at 11am, we hear.The announcement could come at 11am, we hear.
UpdatedUpdated
at 9.45am BSTat 9.45am BST
9.38am BST9.38am BST
09:3809:38
In another triumph for free market capitalism, Scottish Power has been slapped with an £18m fine for unacceptably poor customer service.In another triumph for free market capitalism, Scottish Power has been slapped with an £18m fine for unacceptably poor customer service.
Angela Monaghan explains:Angela Monaghan explains:
Dermot Nolan, Ofgem’s chief executive, said Scottish Power’s treatment of gas and electricity customers had been “discernibly worse” than its peers.Dermot Nolan, Ofgem’s chief executive, said Scottish Power’s treatment of gas and electricity customers had been “discernibly worse” than its peers.
Speaking on BBC Radio 4’s Today programme, he added: “This is a significant amount of money. It’s basically because Scottish Power failed to treat its customers fairly over a sustained period of time.”Speaking on BBC Radio 4’s Today programme, he added: “This is a significant amount of money. It’s basically because Scottish Power failed to treat its customers fairly over a sustained period of time.”
Related: Scottish Power fined £18m for poor customer serviceRelated: Scottish Power fined £18m for poor customer service
9.25am BST
09:25
The chair of the BHS pension fund trustees has revealed he was surprised that Retail Acquisitions wanted to buy BHS last year, given its pension deficit.
Chris Martin told the Today Programme that:
It’s always difficult when a company is sold with a large pension deficit. You wonder why the purchasers would want to buy the company. But they did.
And we engaged with them and we talked to them about the funding obligations to the scheme.
Unfortunately, the trading of the business meant it couldn’t support any contributions to the scheme and hence it’s now in the position it’s in.
The good news, if there is any good news, for pension scheme members is that the PFF is in place and supporting their pension obligations.
Martin insists, though, that the pension scheme hasn’t dramatically deteriorated in the last year.
9.10am BST
09:10
The BBC’s business editor Simon Jack has been outlining Philip Green’s defence against criticism over the BHS crisis.
He ran this company for 15 years, he employed thousands and thousands of people, and he was a great force for UK fashion retail and made it a big force both here in the UK and the US.
It doesn’t look good as he jumps on his yacht to go back to Monaco with his arm around Kate Moss, leaving employees and pensioners worried about it.
But he’s not a natural corporate raider. He’s not necessarily the vulture type of capitalist that people may have portrayed him in the last couple of days.
Green does have questions to answer, though, for selling BHS to an “unknown bunch of brokers, financiers and lawyers”
They didn’t invest in the company but proved very adept at getting money out of it, Jack points out. £25m, by our maths.
8.58am BST
08:58
With profits up 12%, Whitbread is profiting from Britain’s “long working hours culture”.
So argues Steve Clayton, head of equity research at Hargreaves Lansdown:
“Costa is busily slaking the nation’s never ending thirst for caffeine; think of it as an investment play on the UK’s long hours work culture. Premier Inn is a great product; a clean comfortable room, in a good location at a sensible price. With over 60,000 rooms in the estate, it is the clear market leader in the UK branded budget hotel sector.
8.49am BST
08:49
Labour MP Owen Smith, the Shadow Secretary of State for Work and Pensions, isn’t impressed with BP’s results:
So, Boss of BP awards himself a £14m salary even though he oversaw a £400m loss last year. A case study in Crony Capitalism.
(that loss was on a ‘replacement cost’ basis, adjusting for moves in the oil price but not stripping out one-off charges)
8.32am BST
08:32
Over in the City, shares in Whitbread have jumped 3.6% to the top of the FTSE 100 leaderboard after it reported a 12% rise in underlying pretax profits.
BP are close behind, up 3.1% despite suffering an 80% slump in earnings. Investors are relieved that it wasn’t even worse, and pleased to hear CEO Bob Dudley promising further spending cuts...
8.21am BST
08:21
The Times have pinned the blame for BHS’s failure firmly on current owner Dominic Chappell.
The twice-bankrupt racing driver simply lacked the skills to turn the group around after buying it from Philip Green for £1, argues Deirdre Hipwell.
Here’s a flavour:
Sir Philip Green said that he had sold BHS ‘100 percent clean’, adding: “If I give you my plane, right, and you tell me you’re a great driver and you crash it into the first f****** mountain, is that my fault?
For many in the market, the answer to that question is ‘yes’, arguing that it was his fault for selling a fragile business to Mr Chappell’s Retail Acquisitions, which appears to have had neither the skills nor means to save it
A veteran propert expert who declined to deal with BHS under its new owners said: “You have to accept the fact that Chappell is a buffoon”
More here: ‘Buffoon’ drove struggling retailer into ground
Blistering stuff on #BhS from The Times, among others. #buffoon pic.twitter.com/q2khrIa0nV
8.10am BST
08:10
Four UK newspapers are leading on BHS’s collapse into administration:
pic.twitter.com/RtBjlORaG7
Guardian front page, Tuesday 26 April 2016 – Revealed: the £25m payout to BHS bosses pic.twitter.com/Zfr8f2H9h8
CITY AM: Pressure mounts on BHS top dogs #tomorrowspaperstoday pic.twitter.com/Es3bO8wNwW
FINANCIAL TIMES: BHS's £571m pension deficit sparks inquiry into collapse #tomorrowspaperstoday #bbcpapers pic.twitter.com/vmfRSX4VZ9
8.03am BST
08:03
Daily Mail: Philip Green could lose his knighthood
Today’s newspapers are packed with criticism of BHS’s present, and former owners.
In the Daily Mail, Alex Brummer has outlined what a poor state the company was in, by the time Sir Philip Green sold it for a pound last year.
BHS had nowhere to go but the knacker’s yard. All it consisted of was an outdated, declining enterprise, with a collection of unattractive, near valueless shop leases and a liability in its pension fund of £571 million.
By selling when he did, Green put enough distance between himself and the new owners before the all-but-inevitable end arrived.
By the time he sold, he had ensured that most of the real value of the business, including the £40 million freehold of BHS’s imposing headquarters in Marylebone in West London, from where Green liked to hold court, was owned directly by his family.
And that leaves BHS workers facing a 10% cut to their pensions, if they are bailed out by the UK’s pension protection fund.
Brummer argues that Sir Philip should pay the ultimate price - demotion to the ranks - if he doesn’t reach deep into his pocket to cover the £571m pension black hole.
If he doesn’t stump up, however, the knighthood bestowed upon him by Tony Blair — for Green’s donations to flagship fashion academy schools — could be taken away from him.
Veteran pensions and welfare campaigner Frank Field MP has called for Green to lose his knighthood in the manner of Fred Goodwin, the disgraced former boss of the Royal Bank of Scotland.
It would be the ultimate humiliation if Sir Philip were to join the select company of business people stripped of the honours of which they had once been so proud.
Taking no prisoners on #BHS Alex Brummer in @DailyMailUK pic.twitter.com/V7mg30qpCI
8.00am BST
08:00
BP profits slump 80%
The recent slump in oil and gas prices has sent profits at oil giant BP slumping by almost 80%.
The company has reported an underlying replacement cost profit of $532 million, from $2.6 billion in the first quarter of 2015. That’s despite slashing its capital expenditure bill by $500m, as it cuts back on new projects.
Analysts had feared a loss. And chief executive Bob Dudley, who suffered a humiliating shareholder rebellion over his £13m pay package last week, claims the situation is improving.
He says:
“despite the challenging environment, we are driving towards our near-term goal of rebalancing BP’s cash flows.”
BP's Dudley optimistic on oil prices: "robust demand&weak supply growth will move global oil markets closer in2 balance by..end of the year"
Updated
at 8.06am BST
7.38am BST
07:38
The Agenda: BHS in administration; BP profits slide
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
Today, we’ll be tracking the BHS crisis again. Eleven thousand jobs are on the line at its 164 stores, in the biggest retail failure since Woolworths in 2008.
And criticism is mounting against firm’s owners, Retail Acquisitions, and former boss Sir Philip Green, over a fiasco that could leave the taxpayer covering BHS’s pension blackhole.
Today’s Guardian has splashed on the discovery that Retail Acquisitions have received a tasty £25m since acquiring the high street chain barely a year ago.
Sources with knowledge of BHS’s finances have told the Guardian that more than £25m was paid from BHS to Retail Acquisitions in the past 13 months. This included £2.8m in management fees, £2.1m in salaries and wages, £11m in legal and professional fees and £10m in interest payments.
The man behind Retail Acquisitions is Dominic Chappell, a former racing driver who has been declared bankrupt twice. Chappell owns 90% of Retail Acquisitions,which bought BHS for £1 from Green in March 2015.
Related: BHS paid more than £25m to owner in 13 months before administration
Green was heavily criticised by MPs in parliament last night, with talk of ‘serious questions to answer’ and ‘the unacceptable face of capitalism’. He’s now facing questions over how his family took out £400m in dividends from BHS before selling it.
They’ve certainly got some fun out of the cash. As Sarah Butler explains:
Even after the financial crisis hit the UK economy in 2008, the Greens have partied on. The family enjoy several weeks a year at the exclusive Barbados resort Sandy Lane, where they can hang out with friends such as Simon Cowell.
In 2012, the family apparently shelled out more than £3m to fly 150 guests – including Cowell, Kate Moss, Holly Valance, and her partner, the property developer Nick Candy – to Mexico’s Yucatan peninsula for Green’s 60th birthday party. Rihanna and Stevie Wonder were reportedly flown in to provide the entertainment.
But that was a relatively muted affair compared to Green’s 50th birthday bash, for which he chartered a private jet to fly 200 guests, including journalists and other business associates, to Cyprus for a three-day toga party at a cost of £50m....
How Philip Green's family made millions as value of BHS plummeted https://t.co/slgWvePNBv
Also coming up...
It’s the start of the oil reporting season, with BP releasing results for the last quarter. Whitbread, the firm behind Premier Inns and Costa Coffee, are also updating the City.
There’s no significant European economic data today, but we do get the latest US durable goods orders (for March) at 1.30pm BST, followed by US consumer confidence report at 3pm BST.
Europe’s stock markets are expected to inch higher this morning, after two days of falls.
Our European opening calls:$FTSE 6276 up 15$DAX 10319 up 24$CAC 4551 up 5$IBEX 9171 up 31$MIB 18483 up 79
We’ll be tracking all the main events through the day...
Updated
at 7.48am BST