Collapse of BHS sets lords leaping to attack Sir Philip Green

Philip Green

The well-connected crossbench peer, who was appointed City minister under Gordon Brown, has tabled 11 questions in the House of Lords over the past couple of days, piling pressure on ministers to take action after the department store chain fell into administration on Monday.

In questions put to the Cabinet Office, business department and department for work and pensions, Lord Myners has urged the government to establish an inquiry into the circumstances surrounding BHS being placed into administration with an estimated pensions hole of £571 million The Times reports.

The Pensions Regulator said this week that it would carry out an investigation into whether Sir Philip and Retail Acquisitions, the little-known consortium that bought BHS last year for £1, sought to avoid plugging the gap in its retirement fund.

Lord Myners, who has carried out reviews into governance at the Co-operative Group and initial public offerings after the sale of Royal Mail, is calling for the pensions watchdog to appoint an investment bank and retail consultancy to support its investigation.

His intervention comes more than a decade after the two men crossed paths over Sir Philip’s attempt to take over Marks & Spencer.

Lord Myners was chairman of M&S in 2004 when the high street stalwart was pursued by Sir Philip. At the time he called the rebuff of Sir Philip a “victory for polite, calm and diplomatic people against irrational, erratic, rude, crude, volatile and offensive people”.

Stuart Rose was parachuted into M&S to stave off Sir Philip’s £9.1 billion bid and their rivalry was so intense the two were said to have had an altercation outside M&S’s head office in Baker Street, London.

The retail tycoon was forced to drop his bid, which followed an approach four years earlier, after it became apparent that he had failed to obtain more than 90 per cent support from investors.

Lord Myners declined to comment yesterday on whether Sir Philip had contacted him about the flurry of questions but said he did not believe that the billionaire should lose the knighthood, given in 2006 for “services to retailing”, as some MPs have suggested.

The head of the Arcadia empire, which includes Topshop, has come under fierce criticism from MPs this week.

The work and pensions select committee said yesterday that Sir Philip would be called to appear before it as it announced the scope of its inquiry into pensions regulation, the Pension Protection Fund and the impact of BHS’s pension liabilities on its sustainability.

Lord Myners is also concerned about the financial strength of the fund. He asked the government to review it and has asked ministers to consider the risk to the solvency of the fund “of owners of companies with funding deficits selling the business for a nominal consideration or to an unsuitable purchaser”.

Additionally he is putting pressure on the government to review legislation protecting creditors in the event of a business failing and has called on Westminster to publish an “estimate of the likely impact of the additional levy that will be imposed on well-managed and solvent pension schemes in relation to the BHS pension schemes”.

Other questions include whether the government has held talks with the owners, managers or advisers to BHS and “whether they will order an inquiry into actions taken by the trustees of the BHS pension schemes in agreeing revisions to funding rates and supporting the sale of the employer”.

He also asked ministers to review the effectiveness of recommendations on public sector procurement made by the entrepreneur.

Sir Philip had carried out a review of government spending in 2010, concluding that the government could save billions of pounds if it improved “shocking” spending processes and found that no business could survive the level of money that was wasted in government.

 

 

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