BHS

Richard Fuller Excerpts

Thursday 20th October 2016 Commons Chamber

[Richard Fuller (Bedford) (Con)]

I beg to move an amendment, at the end of the Question to add,

‘; and, noting that Philip Green received his knighthood for his services for the retail industry, believes his actions raise the question of whether he should be allowed to continue to be a holder of the honour and calls on the Honours Forfeiture Committee to recommend his knighthood be cancelled and annulled.’

I am fortunate to follow such a gracious speech by the right hon. Member for Birkenhead (Frank Field), and to move the amendment standing in my name and the names of 113 other Members of this House.

I took part in the inquiry into British Home Stores not only as a member of the Business, Innovation and Skills Committee but as someone who believes passionately in the good that business can do. I have seen in my own life, and in countries around the world, that the force of market economies helps everyone. It helps people who want to earn a living and build a future for themselves and their families, and it creates a stable basis for broader freedoms in society to take hold.

However, in the course of our weeks of inquiry it became apparent to me that when we look at British Home Stores in particular, and at corporate governance in this country more generally, we see that all the rules that help set the stage for our market economy presume that with the freedoms given to people who have enormous power over thousands of their fellow citizens, when times are tough, or when push comes to shove, those people will do not just the legal thing but the right thing—the honourable thing. To some people, “honour” may seem an unusual word to use with regard to business, but in an effective business, ultimately, honour is all that one has. A person can amass a great fortune, but in such turbulent times for the market, they can lose it in a day, and all they are left with is their honour. Underpinning the amendment is the need to gauge, from the specifics of our parliamentary inquiry into British Home Stores, not whether Sir Philip Green’s actions were legal but whether they were honourable. That is pertinent because he received his honour for services to retail.

In the course of our inquiry, a core issue was pensions. The right hon. Member for Birkenhead spoke in detail, as will other Members, about the shortcomings that have led to British Home Stores pensioners facing the prospect of lower pensions and the taxpayer facing the prospect of having to pick up the tab for the difference.

Another issue was the role of advisers. It was bizarre that among a fleet of well-paid advisers on a transaction, apparently the only voice that mattered was that of the adviser who said they were not an adviser. That may be okay if a person is dealing with just themselves and their family, but when they are dealing with people who are going to get up on Monday to try to earn a living in a shop, advice is important. We saw many times that the role of advisers was not just in giving advice; it was also in conveying an impression that this person was a person of substance. In an enterprise with £600 million of revenue, 11,000 employees, and responsibility for putting money into the pensions of 20,000 people, surely those running it should be people of substance—people with experience. What goes through the mind of a knight of the realm in saying that those livelihoods and those futures should be consigned to a three-time bankrupt? What goes through the mind of the owner of such a substantial business in thinking that the problems that he has faced, and found quite challenging, can more easily be solved by someone with zero experience of the industry that they are about to take on?

[Margaret Ferrier (Rutherglen and Hamilton West) (SNP)]

I was contacted by email by a constituent, Irene, who shared the following:

“I have two friends that worked in BHS in Glasgow and they are devastated at what has happened to them and their pensions. They worked there for years and don’t have much chance of getting another job or being able to build up works pension...This has happened to my friends and their colleagues all because he risked his worker’s pensions while he made huge profits. I feel that we most certainly should not be honouring people like that.”

Does the hon. Gentleman agree with Irene, and me, that this man does not deserve his honour after what thousands of hard-working people across the UK have endured?

[Richard Fuller]

I am very grateful for the hon. Lady’s intervention, and I absolutely agree. I would say to people who worked for British Home Stores and want to be sure that we are dealing with issues that are tangible for them, and who are perhaps worried that the knighthood is a separate question, that we are debating those tangible issues. We are talking about what happened to their pensions and the fact that many people lost their jobs. Nevertheless, a symbolic, but still quite tangible, step that we can take in this House is to conclude that, as the hon. Lady says, such behaviours do not merit the continuation of an honour.

In their response this week, Lord Pannick and his colleague talked about governance issues. We were shocked to see that the response said that it was technically not the responsibility of the board of a holding company to attend even a meeting that disposed of a subsidiary, with all those livelihoods attached to it. Not doing so may not have been illegal, but for Lord Grabiner not even to have attended the meeting where the business was disposed of to a three-time bankrupt strikes me as calling into question the character of the members of the board. What went through their minds so that they did not think that was the right thing to do? They were not supposed to sign people into the wilderness with the brush of a pen, and for a Lord to do that points again to the fact that honour has to mean something in the behaviour of our businesses.

I want the Government to consider some further points. I do not have an answer on the question of the payment of dividends when there are pension deficits, but we need to look at it. Another issue to consider is transparency in large private companies, compared with that in public companies. Should the role of chairman continue to be precisely the same as that of other directors, or should the chairman have a greater role and responsibilities? What are the responsibilities of advisers?

Colleagues in the House have spoken to me privately and said that they may well agree that Sir Philip Green is no longer deserving of the knighthood, but they are not sure that the House has a role to play in that. Respectfully, I disagree. We are here to assert a view on the opinion of the people, and I think it is perfectly valid that we should consider the issue in the context of our report. It is on our work that we are expressing a view. We do not make the final decision, but it is worthy and honourable for this House to have a view about Sir Philip Green. Over the summer, Sir Philip has had the opportunity to find his moral compass and do the right thing. In the absence of that, the House has no option but to support the amendment and the motion.

--- Later in debate ---

[Amanda Milling]

The hon. Lady makes an interesting point. She has a lot of personal interest in looking at RBS and the banking industry. From my perspective, the Government have been very quick in responding to the collapse of BHS and in recognising that there is a need to review corporate governance. I will come on to that in a bit more detail shortly.

The devastating events that resulted in the tragic collapse of BHS raise several questions about whether the framework of corporate governance is satisfactory, especially in relation to large private businesses—those with large workforces and large pension liabilities. This is about protecting our economy, protecting the taxpayer from picking up the bill and, most important, our responsibility to do everything we can to protect employees.

Many right hon. and hon. Members have discussed the consequences of the collapse of BHS. They have looked at the employees and the members of the pension scheme. I would like to focus on the employees. Eleven thousand people lost their jobs as a result of the collapse of BHS. But for those people it was not just about losing their job; it was about the impact on their lives and that of their families. Many of those people have mortgages to pay and are worried about whether they can keep a roof over their head and that of their family.

[Richard Fuller]

May I echo what my hon. Friend is saying? My right hon. Friend the Minister for Apprenticeships and Skills, who cannot be here today, mentioned to me that the BHS store in his constituency was for many years one of the most profitable BHS stores, but no due regard was given to those employees or pensioners. They were essentially cast aside, as everyone else was. The impact is being felt throughout the country—in town after town, store after store.

[Amanda Milling]

I thank my hon. Friend for his intervention. He makes an important point. The stores are across the country. I do not have one in my constituency, but many right hon. and hon. Members do. Hundreds of people were employed at each store.

As I said, this is not just about the employees; it is also about their families. Far more people than the 11,000 employees have been affected by the collapse of BHS. As the hon. Member for Rutherglen and Hamilton West (Margaret Ferrier) mentioned, the effect has been devastating. This has been a horrid period for the people who no longer have jobs at BHS and are facing difficulties in finding new employment.