BHS and Sir Philip Green November 2016
Thank you for contacting me recently regarding BHS and Sir Philip Green.
I appreciate the concerns you raise. The collapse of BHS earlier this year was a tragic blow to its employees, members of its pension fund and high streets throughout the country. Furthermore, I believe that the conduct of its former owner Sir Philip Green undermines responsible businesses across Britain.
As a joint report from the House of Commons Work and Pensions Committee, and the Business, Innovation and Skills Committee (now the Business, Energy and Industrial Strategy Committee) makes clear, the Green family took substantial dividends from BHS, while Sir Philip failed to invest sufficiently in stores or to reinvent the business to compete on the high street. Furthermore, Sir Philip paid too little attention to the BHS pension scheme over a number of years, before selling the company to a wholly unsuitable purchaser. In light of such conduct, I believe it would be utterly inappropriate for Sir Philip Green to maintain his knighthood for "services to retail". I therefore welcome that on 20 October 2016 the House of Commons agreed to a motion recommending the annulment of Sir Philip's knighthood.
However, I believe we need to go beyond the condemnation of one man. Removing Sir Philip Green's knighthood will not create jobs for the 11,000 BHS workers who lost them, nor fill the £571 million deficit in the company's pension fund. While I hope the motion passed by the House of Commons will put pressure on Sir Philip to pay back the pension deficit in full, it is extraordinary that legally he appears to have done nothing wrong.
The Government has stated that it is concerned about "the sharp contrast" between the impact of BHS's collapse on workers and pensioners on the one hand, and the payments received by senior executives on the other. It has said that it will review corporate governance, including executive pay, and may look at further legislation on pension regulation. However, I believe we need more than gestures. If the Government is truly committed to transforming our economy, it should tighten up the law on pensions and takeovers to make the fate of BHS a thing of the past; it should take on a corporate culture in which short-term greed prevails over long-term investment; and it should require companies to attend to all stakeholders, rather than just a narrow group of shareholders. It is also important that the Government ensures that BHS staff who have lost their jobs are supported to find alternative work as soon as possible, and that pensioners are protected.
Thank you once again for contacting me and for sharing your views on this issue. I hope that as a result of the House of Commons debate on BHS, Sir Philip Green is better held to account. I hope even more that this serves as a turning point for the governance of our economy.