BHS

Bill Esterson Excerpts

Monday 6th June 2016 Commons Chamber

[Bill Esterson (Sefton Central) (Lab)]

I thank the Minister for advance sight of her statement.

The whole House will be concerned for the 11,000 staff who are losing their jobs as a result of the liquidation of BHS and Austin Reed. The closures also affect supply chains, local economies and communities. Can the Minister tell me whether the taxpayer will have to pay for redundancies, as happened at Comet where the previous owners, not staff, were preferred creditors? Given what she said about the Pensions Regulator, does she envisage an investigation into the actions and activities of Sir Philip Green? Will he be asked to make up the pension shortfall, so that pensioners are not short-changed by receiving only 90% of their pensions guaranteed under the PPF?

The Minister mentioned work done to support the high street. I agree that the high street is a crucial part of the UK economy, but I am afraid the evidence of the failure of BHS, Austin Reed and others suggests that the work done by the Government simply has not been enough. As Mary Portas said, the Government have so far made only token gestures to help our high streets.

The allegations about what happened at BHS are beyond belief. A BHS pension surplus became a deficit of £571 million. The business was sold to Retail Acquisitions, a firm whose head was a three-times bankrupt with no apparent experience of turning around struggling retailers and who appears to have taken significant sums out of the business while it was still trading. What investigation will the Minister’s Department carry out into why Sir Philip Green sold the business when he did and what due diligence he carried out into the buyer?

Sir Philip Green’s family were paid hundreds of millions of pounds in dividends, and all the while the business was lacking the investment in modernisation that might have allowed it to survive and indeed thrive, as others have done. While his former workers contemplate redundancy with significantly reduced terms and a reduced pension, he awaits the delivery of a brand-new £100 million yacht. The Minister mentioned possible investigations. Will she say whether under existing insolvency law she thinks criminal investigations should be considered? Does she envisage a change in the law so that obscene profiteering by the likes of Sir Philip Green and Retail Acquisitions are made illegal? Just what scrutiny does she think is needed of the period prior to insolvency in cases such as those of BHS and Comet? Does she think, as many people do, that Sir Philip Green should be referred to the police for his actions while he owned BHS? It is not just Opposition Members who think his actions a disgrace; one of her own Back Benchers described this as the “unacceptable face of capitalism” the last time we debated the challenges and concerns around BHS.

BHS, as with Comet before, is an example of wealth extraction, not wealth creation, and a system that favours a very small number of people, rather than the wider economy. The Minister and her colleagues need to intervene and investigate in full what happened at BHS and make sure that action is taken against the likes of Sir Philip Green; otherwise they will be complicit in a system of exploitation by a few owners at the expense of the many staff and pensioners.