By Dave Stockton High street staple BHS has gone bust with debts of £1.3 billion, a £571 million pensions black hole and nothing to show for its 88 year history other than a tidy profit for retail billionaire Sir Philip Green.
With 164 stores slated for closure, 11,000 jobs are at risk and 20,000 people face the prospect of having the value of their pension slashed.
Philip Green is the “wealth creator” behind this disaster. A former advisor to the government, the owner of Arcadia Group is also the proprietor of Topshop and Dorothy Perkins. He and his wife are regulars on the Sunday Times rich list, clocking in at £3.2 bn this year, even after dropping £100m on his third yacht.
Knighted by Tony Blair (who else) for “services to the retail industry”, the Sun reports that many of his fellow tycoons regard him as a “belligerent bully obsessed with money who tramples on anyone who gets in his way.”
Having backed the blue horse in 2010, he was tasked by Cameron with reviewing “government spending and procurement.” In a surprise twist, he reported there was a lot of waste. There is certainly no one better qualified for the job than the owner of three yachts.
Green spent 16 years as the wealth creator behind BHS, during which time its pension fund went from a £5m surplus into a £571m deficit. Between 2002 and 2004, shareholders took out just over £422m in dividends, the bulk of this pocketed by the Greens. In 2005, he paid his wife (resident for tax purposes, along with his yachts, in tax haven Monaco) a reported £1.2 bn in BHS dividends. Monaco’s “limited fiscal laws” allowed them to dodge £285m in UK taxes.
The Financial Times’ coverage peddles the usual bosses’ argument for all failing retail outlets: that it had out of date stock, didn’t keep up with the times, had old fashioned stores that people only visited to use the toilets, etc. But even it has to admit that, with its owners milking its profits and failing to reinvest them in upgrading, a collapse was inevitable. With BHS billions in the red, Sir Philip got out just in time.
As the company steamed towards bankruptcy in 2015, enter twice-bankrupted asset-stripper Dominic Chappell. He bought BHS for the princely sum of £1 from Sir Philip, through the Retail Aquisitions consortium. Just days after purchase, Retail Aquisitions used their prize as collateral to secure an £8.4m loan.
More than a third of this loan ended up as a multi-million pound windfall to four directors of the consortium. Chappell paid himself a £540,000 salary and reportedly bought himself a yacht, while having change left over to lend his father £1.3m to pay off a mortgage on a home.
Members of shop workers’ union Usdaw, angrily denounced BHS owners past and present at their annual conference in Blackpool. Labour has accused Sir Philip of extracting hundreds of millions of pounds from the company and making off “to his favourite tax haven”. Other MPs repeated 1970s Tory Prime Minister Edward Heath’s phrase about the “unacceptable face of capitalism”.
In fact, this is the face of capitalism. These parasites are not wealth creators, except in so far as they accrue wealth to themselves. They use every means at their disposal to rip off their employees, their customers, and the taxpayer. When their businesses go bust, they throw workers on the scrapheap and make the rest of us pay the social and economic cost.
With a new economic crisis on the horizon, the only way to protect the enormous number of jobs under threat would be for a Corbyn-led Labour government to take over collapsing companies - and pay no compensation to the owners who run them into the ground. Or perhaps we could stretch to £1.
Meanwhile, the workforces should occupy the stores if any move is made to sack employees, just as the steelworkers faced with the devastation of their communities should. Sir Philip should be made to fill the hole in the pension fund and pay back all the taxes he has dodged.
To get a government that will intervene and protect people’s jobs, we need mass mobilisations to kick out the Tories and start the fight to strip the billionaires of their unearned wealth and use it to provide jobs, healthcare and education for all.