Tuesday, 28 February 2017

Sir Philip Green and the Example He Sets: What ‘Justice’ Really Looks Like

This very short post is based on the news today that Sir Philip Green has, according to the general sentiment being displayed, delivered on his pledge to ‘sort’ the pensions crisis that had developed in the wake of the British Home Stores (BHS) collapse. In putting £363 million into a Special Purpose Vehicle, thereby allowing 19,000 employees of the failed high street giant to be put in a position, in relation to their pension, that they would have been in had BHS not collapsed, which is around 10-15% higher than they would have received if the pension-holders would have been entered into the Pension Protection Fund. Those with pensions of less than £18,000, around 9,000 of the 19,000, will be able to opt to take a lump sum and, if they choose to do so, Sir Philip Green may see up to £15 million returned to his pockets.

The general sentiment of the business press today goes along the line of the following: ‘Philip Green’s settlement… is a triumph for the regulator and for public pressure’; and Frank Field’s assessment of the settlement as an ‘important milestone in gaining the justice for BHS Pensioners’. For the pension-holders of BHS it is undoubtedly not negative news, but it is not a ‘victory’. The Guardian quotes a former worker of BHS who opined that the settlement was ‘the least Green could do’, as rather than be employed and be contributing to his retirement, the former employee is now unemployed and in receipt of state benefits. It is worth noting that the original deficit for the pension scheme was £571 million, which is over £200 million more than what was eventually paid and led the pensions regulator to reassess their own position and state that to value the deficit at £571 million was inappropriate on their behalf, because the figure takes into account the fact that the pension scheme would have had to pay an insurance firm to guarantee its liabilities.


So, whilst it is positive news that the pension holders who, through no fault of their own, have had to live with the stress of not having their future guaranteed for over a year, this saga paints a much more worrying issue when we widen our focus. Firstly, as far as Sir Green is concerned, the legal investigation into him and his conduct is now over. Also, as far as the saga itself, it demonstrated the absolute contempt that business elites have for the public, and their representatives, with Green slamming MPs for ‘excessive staring’ and conducting a particularly aggressive campaign against the questioning from democratically-elected representatives. If we look at the punishment for this whole ordeal, from depleting the resources of a British High Street fixture and then selling it to a bankrupt race-car driver for £1, to dragging the issue of recapitalising the pension pot that he himself had drained, it is quite remarkable what has been deemed to be appropriate. For this incredibly poor conduct, which is in breach of a number of sections of the Companies Act 2006, it was deemed that threatening to strip Green of his Knighthood be deterrent enough. In threatening legal action, and then settling for the £363 million today, the Government and regulators have demonstrated that financial white-collar crime is not ‘crime’ as we understand it. Putting this all into perspective, the Green family profited over £580 million from BHS, and have had to repay £363 million – £217 million is not a terrible ‘punishment’ to receive for ending 11,000 jobs; the retail tycoon’s £100 million Yacht and £46 million private jet can therefore be seen as trophies for profiting at the expense of the public. As discussed in a previous post, there was a feeling that there was a movement against this sort of venal abuse, a movement which may culminate in real and impactful changes into how a company may operate – the sentiment delivered today, that the settlement can be considered a ‘victory’, can almost stop those dreams in their tracks. Really, the sentiment in the popular quote from Samuel Johnson, that ‘the gallows doth wonderfully concentrate the mind’, in terms of real punishment via lengthy custodial sentences, are apt for people like Sir Philip Green, but in the world we live, just threatening to strip someone of their ceremonial knighthood is deemed punishment enough – the actual understanding of that difference is truly a blight on our ‘advanced’ society.

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