BHS stores close today but pensioners face decades of pain

Former BHS owner Sir Philip Green has been traversing the tranquil southern European seas in his humungous new £100 million yacht, staffed by a crew to cater for his, his family’s and his pets’ every need.

That might be fine if the flagship High Street chain was still going strong and if the pension funds were in a healthy condition.

Instead, nine decades of retail history comes to an end today as the final stores close. 11,000 workers lose their jobs and many will be facing the consequences of what a committee of MPs described as “the unacceptable face of capitalism.”

The Commons Work and Pensions Select Committee really didn’t mince its words about the demise of BHS and the culpability of its leadership:

The evidence we have received over the course of this inquiry has at times resembled a circular firing squad. Witnesses appeared to harbour the misconception that they could be absolved from responsibility by blaming others. The worst example was Sir Philip Green, despite his protestations to the contrary. Sir Philip adopted a scattergun approach, liberally firing blame to all angles except his own, though he began his evidence by saying he would do the opposite. The truth is that a large proportion of those who have got rich or richer off the back of BHS are to blame. Sir Philip Green, Dominic Chappell and their respective directors, advisers and hangers-on are all culpable. The tragedy is that those who have lost out are the ordinary employees and pensioners. This is the unacceptable face of capitalism.

None of this is the fault of the mostly female, mostly low-paid staff who ran the stores, yet they will pay the biggest price. Those losing their jobs today will be 10% worse off in retirement. That’s a big hit. Imagine how you would feel if your income dropped by a tenth.

Green has of course told the MPs that he would contribute to the pension gap but so far no funds have been forthcoming.

Instead, associates of his have suggested that the funds could be conditional on an investigation by regulators being dropped. 

One ally of the Topshop billionaire said: “This would be a voluntary contribution, and it would be unrealistic to expect it to be made unless the anti-avoidance probe was discontinued.”

How have we managed to create a system where the extremely wealthy think it is reasonable for them to escape scrutiny?

It’s been good to see BHS employees fighting back, though. Former store manager Lin Macmillan, someone I’m lucky  to have as a friend, has been running a lively campaign in support of the pensioners. She’s been calling for Philip Green to sell his yachts and plug the gap in the pension fund. She’s been all over the media in recent months She told fashion industry site Drapers on Friday:

I have started the petition myself because I was so appalled at what was happening,” she said. ”Sir Philip Green has been on his yacht for over a month now and he says he will sort the pension deficit, but I think you need to meet with The Pensions Regulator to do that – it’s not something you can do remotely.

Yesterday, Macmillan visited the Glasgow store – which is one of the final stores to close – and described employees as “still working very professionally and cheerfully helping customers, trying to sort out the last of the stock, which frankly was a mess”.

“They did have it sorted as much as they could, but it looked like a complete jumble sale,” she said. “Around three-quarters of the store is empty because they’d moved all the stock into one place, so the rest of it felt like an aircraft hangar.”

Macmillan, who stopped working for BHS in 1990, said she first became worried about the chain around eight years ago when visiting stores that had far fewer customers than in her time at the retailer.

“I can remember days when you could not move in there for customers, particularly around Christmas time, but when I visited stores later there were often more staff than customers so you did start to think something was wrong,” she said.

“At the beginning of March this year, we got a booklet from the pensions trustees. It set out options if BHS did go into administration, which really got alarm bells ringing.

“The worry is that now this could drag on for a long time and the pensions of those of us who no longer work for the company don’t keep pace with inflation, and people working for BHS when it closed will only get 90%.”

Here she is giving a detailed interview ahead of Green’s appearance before the select committee. She’s also been on BBC today.

She’s a great, calm, reasonable voice for BHS pensioners and she is not the type to give up until she sees a satisfactory outcome.

Please sign Lin’s petition if you support her and the tens of thousands of retail workers who deserve the retirement they paid for. These pensions are not particularly generous as it is and they shouldn’t have to pay the price of the incompetence of super wealthy company owners.

* Caron Lindsay is Editor of Liberal Democrat Voice and blogs at Caron's Musings

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  • Eddie Sammon 28th Aug '16 - 10:59am

    Signed and shared the petition. The WASPI campaign is also a good one to defend women’s pensions. Some of these women will also be affected by state pension changes aimed at equalising the state pension age between men and women but not giving women enough time to plug the difference.

  • An important article. The BHS pension fund has a deficit of £571. Green and his wife (who was actually the owner of the company) have combined wealth of over £11bn according to Wikipedia. So they can afford to do the right thing by these pensioners while still having over £10bn to spend on superyachts. Why would you not do that? This is the kind of behaviour which is completely incomprehensible to those of us who are not billionaires.

  • A classic case of why light touch regulation is dangerous, if people can get away with cutting corners they will. We have government to prevent the anarchy of anarchists and liberternaism, however too much government is equally bad and that I suppose is why I’m a liberal.

  • Eddie Sammon 28th Aug '16 - 1:11pm

    Defined benefit pensions are the employer’s responsibility. Deficits are understandable, but Philip Green had been taking mega dividends out of the company.

    Yes it’s true that the company can’t dip into employee contributions, but the main point is Philip Green took millions out of a failing company in dividends when he should have secured the worker’s pensions or at least their jobs.

  • Ed Shepherd 28th Aug '16 - 1:27pm

    Theories about “free markets” seem just as reliant on illusions about the essential goodness of human nature as theories in favour of “communism”. Phil Green and Dominic Chappell appear to see no reason why they owe anything to the employees of BHS.

  • Jenny Barnes 28th Aug '16 - 2:04pm

    ” I think the workers are getting the pension that they paid for, not just all the pension that their employers did or should have paid for.”

    Defined benefit pensions are effectively deferred pay. So is it ok for people not get their pay either?

    As to PG’s 3 yachts, what, one must ask, is the Royal Navy for these days?

  • Lorenzo Cherin 28th Aug '16 - 2:04pm

    Excellent article from Caron

    This is the sort of issue where our stance can really emerge , Caron rightly alludes to it being fine him being in his yacht, if his company were solvent , not the politics of envy that at all, and all the better for it being the politics of responsibility, personal and social, truly Liberal !

    We are in an era when individual and corporate responsibilities are facing in opposite directions at times , and any of us who care about such things , and we do , are a little like Doctor Dolittle faced with a site of the ” Pushmepullyou”!

  • Ed Shepherd 28th Aug '16 - 2:08pm

    As Jenny Barnes correctly points out, pensions from salary-related schemes are deferred wages.

  • Stevan Rose 29th Aug '16 - 1:56am

    I have tried to find sources that explain in plain language where the deficits came from and all I can find is that BHS didn’t pay dividends after 2004, and the fund was in surplus after then. Plus a connection with long term near zero interest rates. Sir PG does not cut a sympathetic figure, the words I would use to describe him would not get through the filters, and he should have his knighthood removed given mismanagement and collapsing businesses do not signify a role model to be rewarded. I hear what the Select Committee said but they are a bunch of politicians with agendas beyond justice. So pinch of salt.

    What this needs is an independent judge-led Inquiry and not one that lasts 10 yrs , more of a trial of the facts taking no more than 3 months. It should look at the early years of PG’s tenure and whether the money taken out was legit and reasonable, then any later shenanigans. Was there criminality, negligence, incompetence, and what sanctions should be taken from pursuing deficits and recovering inflated rents and services payments, to the potential for custodial sentences for wrongdoing.

  • @Stevan Rose – “I have tried to find sources that explain in plain language where the deficits came from and all I can find is that BHS didn’t pay dividends after 2004, and the fund was in surplus after then.”

    I fully agree that real information about BHS and it’s pensions deficit is hard to find.
    From my perspective, I think a 10% reduction in pension received isn’t bad, given the circumstances!

    Since circa 2004, I seen the value of one of my defined benefits pension pot’s fall to the point where I am currently guaranteed to receive around 38% of my pension – if that company were to cease trading. There are various reasons for this, most notably investment performance and an over optimistic view of funding (basically it is clear that since circa 2008 unless total contributions were 20~25% of annual pensionable salary, your pension is under-funded). However, in this case, there has been no evidence or rumours of excessive amounts of money being removed from the company or that the company was deliberately underfunding the pension scheme.

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