BHS

Debate between Richard Graham and Andrew Bingham

Thursday 20th October 2016 Commons Chamber

[Richard Graham]

I do not remotely accept the argument in that intervention. This is not a debate about the Bank of England’s monetary policy. The hon. Gentleman would be well advised to read the transcript of the Work and Pensions Committee’s hearing with the Bank of England Deputy Governor three days ago, which I chaired in the absence of the right hon. Member for Birkenhead—[Interruption.] The hon. Member for Ross, Skye and Lochaber (Ian Blackford) is not paying attention, as usual. He would be well advised to read that evidence. Getting rid of quantitative easing will not solve the pension scheme problems, and, in particular, will not solve the problems of the BHS pension scheme. With his approval, I will return to the subject we are discussing.

Before the hon. Gentleman intervened I was remarking that the circumstances of the BHS pension deficit were extraordinary, and that is what I want now to come on to. The BHS scheme went from surplus to large deficit in about 10 years, without any clear plan or any really significant action by the sponsor, without decent relationships between the trustees and the sponsor, with conflicts of interest between some of the trustees appointed by the sponsor that they largely did not recognise during our inquiry, and with contribution holidays in the years when Taveta Investments, the owner of BHS, was taking out large dividends. All that cannot, by any stretch of the imagination, be described as best practice. The plan put forward to resolve the deficit—a staggered series of injections over 23 years—without any evidence of a long-term commitment by the owners to the company, is also not best practice. Our report highlighted that there was an issue with the regulator approving very long-term solutions.

Then we come to the moment of the sale of BHS, when information was withheld both from trustees and from the Pensions Regulator. There was a certain amount of dispute between the seller and the buyer about pressure on the buyer not to communicate with the Pensions Regulator at all, which was reiterated in further evidence submitted to the Select Committee only yesterday by RAL, the buyer. Most significantly, there was no attempt whatever at pre-clearance of the sale with the Pensions Regulator. Most shocking of all to many of us is the concept from both the buyer and the seller that in effect BHS was being sold debt-free, yet it had such an enormous pension deficit. That is at the very least disingenuous. It was naive of the buyer and cynical of the seller.

That brings us to Sir Philip Green himself. He said on 15 June:

“I want to respond to Mr Graham…We want to find a solution for the 20,000 pensioners. We still believe that money into the PPF does not resolve it. Without getting into it…the schemes are quite complex…We will sort it and we will find a solution. I want to give an assurance to the 20,000 pensioners—I am there to sort this in the correct way.”

With that, none of us could disagree. The question, of course—and this is why today’s motion and debate are important—is what has happened in the four months since. There has been some dialogue with the Pensions Regulator. That is absolutely clear. But the public want to know when this is going to be resolved. They are worried that after our report nothing is really going to happen and that an important and powerful man will not be held to account. Today is an opportunity for this House to stress our commitment to holding Sir Philip Green to account.

[Andrew Bingham (High Peak) (Con)]

I had a pension scheme collapse in my constituency about 12 years ago, the Federal-Mogul scheme. Schemes go into the PPF and there are assessments, and all the while that that is going on there is uncertainty. Does my hon. Friend not agree that Philip Green should deal with the situation as he has said he would—well, first of all he should have his knighthood taken away—because all the uncertainty impacts on those poor BHS pensioners?

[Richard Graham]

I am grateful to my hon. Friend, and that is why—I intend to finish my remarks on this note—today’s debate matters. It is not about grandstanding. It is not about Parliament trying to demonstrate moral superiority over the behaviour of individuals. What it is about, I believe, is to say three important things.

First, to Philip Green we are saying, “You made a commitment. We accepted it in good faith and we expect you to fulfil it.” I believe that waiting too long is damaging to his reputation, whereas a quick resolution would be extremely helpful to him. Secondly, the debate is a chance to say to the pensioners and the future pensioners of BHS, “We held this inquiry and we will not let you down.” Finally, it is a chance to say to the employees of other large businesses and the people of Britain in general, “We understand your resentment of businesspeople who run their businesses in cavalier fashion without due regard to your interests.” We have held a complicated inquiry that has held to account the powerful owners of BHS and their advisers. I believe the consequences of our findings will be heard by businesses and echo as cautionary tales for years to come.