The case of Sir Phillip Green exposes how toxic capitalism has become
Sir Philip Green faces the indignity of a debate to strip him of his knighthood in the Commons on 20 October. Desperate to hang on to honorary status, Green has agreed to meet the pensions regulator by the end of the week.
Green, whose net worth is estimated at £5.2bn, is chairman of the Arcadia group, a retail company that includes Topshop, Topman, Miss Selfridge, and several others. Until March 2015, high-street stalwart British Home Stores (BHS) was also under his umbrella. But after several years of losses, Green sold the company to Retail Acquisitions Ltd for just £1. At the time, the company had 180 stores and employed 12,000 staff. After the sale, Green said:
I am pleased we found a buyer… who wants to develop the BHS brand.
Yet commentators noted that Retail Acquisitions Ltd was led by former racing driver Dominic Chappell, who had previously been declared bankrupt three times. Chappell took just 13 months to run the company into the ground, burning through more than £100m in that time. Mass redundancies and a staggering £571m pension deficit resulted in August 2016.
Former BHS workers were naturally outraged and have demanded action.
Unacceptable face of capitalism
A damning report published in July stated that leadership failures and personal greed led to the collapse of BHS. The report described:
the systematic plunder of BHS at the cost of the 11,000 jobs and 20,000 people’s pensions… Sir Philip Green, Dominic Chappell and the respective directors, advisers and hangers-on who all got rich or richer are all culpable, with the only losers the ordinary employees and pensioners.
With regard to Green’s time in charge, the report alleged:
Sir Philip systematically extracted hundreds of millions of pounds from BHS, paying very little tax and fantastically enriching himself and his family, leaving the company and its pension fund weakened to the point of the inevitable collapse of both. Lady Tina Green is still being paid tens of millions of pounds of tax free repayments on the loan that was engineered to sell BHS from one Green family business to another, and will be for some years to come.
A symptom, not the disease
Green decided to escape the furore by holidaying on his private yacht in the Mediterranean over the summer. He has made several vows to sort out the problems, yet with thousands of his former employees facing huge cuts to their hard-earned pensions, he is still yet to table a firm offer. His promise to meet the regulator, with the threat of losing his knighthood looming, must surely be seen as too little too late.
His actions may be reprehensible, as are those of bankers awarding themselves obscene bonuses; and it is to be hoped that the victims – BHS workers – receive what they deserve. But Green, whether he remains a ‘sir’ or not, is simply a symptom rather than the disease. The present capitalist model clearly does not work. And until it is changed, such cases will continue to occur.
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Featured image via Brian Robert Marshall and Financial Times/Wikimedia Commons
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