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Philip Green deserved his humiliation, but our business culture is still rotten Philip Green deserved his humiliation, but our business culture is still rotten
(about 5 hours later)
Unanimous votes are rare in parliament. The House of Commons interfering in the Queen’s honours system, perhaps rarer still. Yet, yesterday, parliament voted unanimously to strip Philip Green of his knighthood.Unanimous votes are rare in parliament. The House of Commons interfering in the Queen’s honours system, perhaps rarer still. Yet, yesterday, parliament voted unanimously to strip Philip Green of his knighthood.
There is no doubt that he deserves it. During his time at BHS, Sir Philip Green treated the company as his own personal plaything. Instead of investing in its branches and developing its brand, he ran down the pension scheme and used the company to line his own pockets. Then, when years of woeful – some would say wilful – mismanagement made itself felt, he jumped ship like the proverbial rat from a sinking ship.There is no doubt that he deserves it. During his time at BHS, Sir Philip Green treated the company as his own personal plaything. Instead of investing in its branches and developing its brand, he ran down the pension scheme and used the company to line his own pockets. Then, when years of woeful – some would say wilful – mismanagement made itself felt, he jumped ship like the proverbial rat from a sinking ship.
It would be laughable for him to retain his honour for “services to retail” in the face of such conduct. But while the revocation of a knighthood might make headlines, we shouldn’t let it distract us from the real issues.It would be laughable for him to retain his honour for “services to retail” in the face of such conduct. But while the revocation of a knighthood might make headlines, we shouldn’t let it distract us from the real issues.
Stripping Green of his knighthood won’t create jobs for the 11,000 who lost them, or fill the £571m deficit in the pension fund. Nor will it fill the hole left on high streets up and down the country, pay back the £6m owed to HMRC, or ensure that firms in BHS’s supply chain – many of them small businesses, the foundation stones of our economy – are paid what they are owed.Stripping Green of his knighthood won’t create jobs for the 11,000 who lost them, or fill the £571m deficit in the pension fund. Nor will it fill the hole left on high streets up and down the country, pay back the £6m owed to HMRC, or ensure that firms in BHS’s supply chain – many of them small businesses, the foundation stones of our economy – are paid what they are owed.
If yesterday’s vote achieves anything, it will be to put pressure on Green to pay back the pension deficit in full, from his own ample wealth. It would make for a reassuring ending. There may be the occasional person who acts irresponsibly, but rest assured, when that happens, your democratic representatives can be relied upon to roundly condemn them and right the situation. Surely that means the system works?If yesterday’s vote achieves anything, it will be to put pressure on Green to pay back the pension deficit in full, from his own ample wealth. It would make for a reassuring ending. There may be the occasional person who acts irresponsibly, but rest assured, when that happens, your democratic representatives can be relied upon to roundly condemn them and right the situation. Surely that means the system works?
But yesterday’s vote was purely symbolic, an act of tokenism. If Green does make good his promise to replenish the pension fund, it will be due to popular pressure, not the power of the law. This is the most extraordinary thing about the whole affair – legally, Green has done nothing wrong. We are not talking about a criminal caught with his hands in the till. As repugnant as it seems, he was acting within the letter of the law.But yesterday’s vote was purely symbolic, an act of tokenism. If Green does make good his promise to replenish the pension fund, it will be due to popular pressure, not the power of the law. This is the most extraordinary thing about the whole affair – legally, Green has done nothing wrong. We are not talking about a criminal caught with his hands in the till. As repugnant as it seems, he was acting within the letter of the law.
This matters because it points to a broader problem. The Tories will have us believe that the BHS scandal arose from the moral failings of one man. But it is the system that is bent. The destruction of the pension scheme is not unique to BHS. Just weeks ago, Bernard Matthews went into administration, and it was pensioners, including in my own constituency of Norwich South, who paid the price.This matters because it points to a broader problem. The Tories will have us believe that the BHS scandal arose from the moral failings of one man. But it is the system that is bent. The destruction of the pension scheme is not unique to BHS. Just weeks ago, Bernard Matthews went into administration, and it was pensioners, including in my own constituency of Norwich South, who paid the price.
And let’s not forget the questionable role played by the auditors who signed off on BHS as a “going concern” just a year before it was sold off for £1. Or the huge City financial advisers who waved through the sale of BHS to Dominic Chappell’s Retail Acquisitions then went on to receive millions in salaries and management fees from the company.And let’s not forget the questionable role played by the auditors who signed off on BHS as a “going concern” just a year before it was sold off for £1. Or the huge City financial advisers who waved through the sale of BHS to Dominic Chappell’s Retail Acquisitions then went on to receive millions in salaries and management fees from the company.
Good businesses are the lifeblood of the economy. But, as responsible business people up and down the country know, the system too often allows good businesses to be undercut by bad. Green is the product of decades of deregulation and market deference, which have encouraged the use of companies to extract wealth rather than create it.Good businesses are the lifeblood of the economy. But, as responsible business people up and down the country know, the system too often allows good businesses to be undercut by bad. Green is the product of decades of deregulation and market deference, which have encouraged the use of companies to extract wealth rather than create it.
Over recent weeks, we have heard the government claiming to have thrown out the laissez-faire fanaticism that has dominated Conservative thinking for 30 years. We have faced the incongruous sight of a Conservative prime minister deploying the language of fairness, democracy and workers’ voices while talking about the economy.Over recent weeks, we have heard the government claiming to have thrown out the laissez-faire fanaticism that has dominated Conservative thinking for 30 years. We have faced the incongruous sight of a Conservative prime minister deploying the language of fairness, democracy and workers’ voices while talking about the economy.
But are we really to believe that the party of billionaires and tax avoiders is now the champion of the working class, ready to transform our economy in the interests of fairness? If there is any truth at all to this rhetoric, the government would offer more than gestures. They would tighten up the law on pensions and takeovers to make the fate of BHS a thing of the past. They would take on a corporate culture in which short-term greed prevails over long-term investment. And they would require companies to attend to all stakeholders, rather than just a narrow group of shareholders.But are we really to believe that the party of billionaires and tax avoiders is now the champion of the working class, ready to transform our economy in the interests of fairness? If there is any truth at all to this rhetoric, the government would offer more than gestures. They would tighten up the law on pensions and takeovers to make the fate of BHS a thing of the past. They would take on a corporate culture in which short-term greed prevails over long-term investment. And they would require companies to attend to all stakeholders, rather than just a narrow group of shareholders.
They would make sure the system rewards the wealth creators.They would make sure the system rewards the wealth creators.
But for the last six years, the Tories have implemented the harshest attack on living standards in a generation, while dishing out corporate welfare and turning a blind eye to conduct that is easily equal to Green’s. To call them the party of the working class is fanciful.But for the last six years, the Tories have implemented the harshest attack on living standards in a generation, while dishing out corporate welfare and turning a blind eye to conduct that is easily equal to Green’s. To call them the party of the working class is fanciful.
I hope that yesterday’s vote will help to hold Green to account. I hope even more that it serves as a wake-up call to start addressing the deeper problems with how our economy is governed. Let’s see if the prime minister takes this opportunity to show that her conversion to Labour’s values is more than just rhetorical. I hope yesterday’s vote will help to hold Green to account. I hope even more that it serves as a wake-up call to start addressing the deeper problems with how our economy is governed. Let’s see if the prime minister takes this opportunity to show that her conversion to Labour’s values is more than just rhetorical.