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Retailers urged to offer work to thousands of BHS staff

Published 06/06/2016

Business minister Anna Soubry said the Department for Work and Pensions has intervened in a bid to help staff left unemployed after the high street chain collapsed
Business minister Anna Soubry said the Department for Work and Pensions has intervened in a bid to help staff left unemployed after the high street chain collapsed

The Government has asked major retailers to consider offering work to the thousands of BHS staff whose jobs are at risk.

Business minister Anna Soubry said the Department for Work and Pensions (DWP) has intervened in a bid to help staff left unemployed after the high street chain collapsed.

BHS's administrator Duff & Phelps announced last week that the business will be wound down and all 163 shops closed and sold off to other retailers after it failed to find a buyer.

Around 8,000 permanent jobs are at risk, as well as a further 3,000 not directly employed by BHS.

Making a statement on BHS to the Commons, Ms Soubry said: "The Department of Work and Pensions has written to major retailers asking them to consider what opportunities they may be able to offer the workers and local areas affected as the situation becomes clearer this week.

"DWP will also be monitoring the impact of redundancies locally on a continuing basis and will provide additional targeted support to any areas particularity badly affected."

She added support will be offered to workers not just as BHS but also to staff of Austin Reed, which also collapsed last week resulting in the loss of approximately 1,000 jobs.

Although offers were received by administrators for BHS, none was sufficient to enable a deal to be completed, Ms Soubry said.

She said: "This will of course be devastating news for workers at BHS and their families and also for those businesses who supply BHS, and our thoughts are with all of them."

The business minister stressed a number of investigations into the collapse of the high street chain are under way, including by the administrators and the Insolvency Service.

Retail tycoon Sir Philip Green, who sold the company for £1 last year, has been accused by Labour of taking out millions of pounds in dividend payments while the firm was heading towards a crash.

Careful not to name individuals, she said: "If evidence is uncovered that any of the directors' conduct fell below what is expected then action will be taken.

"This can include applying to the courts to disqualify the relevant parties from being a company director for a period of up to 15 years.

"If there's any indications of any criminal wrongdoing related to BHS we will ensure that the relevant investigatory body is informed."

The Pensions Regulator is also investigating the £571 million pensions black hole left by BHS and will publish a report on its findings.

Ms Soubry added: "If the regulator believes that an employer is deliberating attempting to avoid their pension obligations, leaving the PPF (Pension Protection Fund) to pick up their pension liabilities, the regulator may intervene and seek redress from the employer, rightly so."

Shadow business minister Bill Esterson said: "While Sir Philip's former workers contemplate redundancy with significantly reduced terms and a reduced pension, he awaits the delivery of a brand new £100 million yacht."

He described claims about activities at BHS, including alleged dividends of millions of pounds paid to Sir Philip's family, and the sale of the business for £1 to Retail Acquisitions as "beyond belief".

He asked Ms Soubry : "Do you envisage a change in the law so obscene profiteering by the likes of Sir Philip Green and Retail Acquisitions are made illegal?

"Do you think, as many people do, that Sir Philip Green should be referred to the police for his actions while he owned BHS?"

He added: "BHS, as with Comet before, is an example of wealth extraction, not wealth creation, a system that favours a very small number of people rather than the wider economy.

"The minister and her colleagues need to intervene and investigate in full what happened at BHS and make sure action is taken against the likes of Sir Philip Green, otherwise they will be complicit in allowing a system of exploitation by a few owners at the expense of the many staff and pensioners."

Senior Tory MP David Davis (Haltemprice and Howden) called on Sir Philip to pay money into the BHS pension pot to ensure employees do not lose out.

He said: "What matters now is that the employees who are dependent on the pensions scheme, if it goes into the Pension Protection Fund, will lose 10%.

"There are many on these benches who think the minimum that needs to happen is for Philip Green to pay back enough to save them from that."

He also raised concerns about the way in which the situation had unfolded.

"The problem is that much of this, I suspect, was legal and that puts a moral responsibility on every government over the last few decades that has allowed this sort of action to be legal," he said.

Ms Soubry stressed the need to wait for any and all investigations to finish "before we rush to any form of judgment".

"Let's wait for those full investigations to be concluded and then see if we need to take matters forward," she said.

The SNP's treasury spokesman Roger Mullin said: "If ever there was an unacceptable face of capitalism it comes in the form of Sir Philip Green and his like."

Mr Mullin said BHS employees had paid into their pensions over the course of their lives but "because of Green's failure as a business man and his naked greed, which may have been legal, they are facing both redundancy and great anxiety about their pension".

He also said that "many will be thinking Green is little better than a corporate crook".

Ms Soubry said BHS's fortunes have "not been good for some considerable time, perhaps that's the fault of all of us for not going and paying it a visit".

She said: "You make a good point about greed - it doesn't matter who it is.

"I'm helpfully reminded by the Deputy Leader (of the House, Therese Coffey) of course it is apparently a deadly sin.

"It's certainly not acceptable, whatever your faith may be."

Tory MP Richard Fuller (Bedford) warned of the "collateral damage which is being done to people's trust in business across the United Kingdom" as a result of the situation with BHS.

Ms Soubry replied: "It is very important that we allow these investigations to take place before we rush to judgment but it is fair and right to say that on the basis of what we have read in the newspapers, nobody could be in any way content with some of the allegations that have been made.

"They are very serious and you rightly make the point ... that does indeed damage the reputation in effect of all businesses and that can't be right either."

Ms Soubry later said: "We will not have British business's good name besmirched by the wrongdoings of others."

Frank Field, chairman of the work and pensions Commons select committee, asked Ms Soubry if she is satisfied with the way the company is to be broken up.

He asked: "Are you satisfied that the firm that is entrusted with the break-up will actually behave in the best interests of the whole network rather than perhaps selling some of the assets off rather cheaply to known figures in the whole of this terrible, sorry saga?"

Ms Soubry said: "I have to say to you that I do have faith in the workings of the administrators. They are under strict duties."

Robert Jenrick, Tory MP for Newark, suggested that Sir Philip had got rid of BHS "because it was a doomed business with a doomed pension scheme".

He suggested there should be greater scrutiny of businesses when they are sold in "instances where a seller has recklessly or knowingly sold their stake in a business to somebody who is completely unsuited and unable to meet the creditor's demands".

Ms Soubry was criticised by Labour MP Andrew Gwynne (Denton and Reddish) for failing to meet administrators, something he described as "shocking" and "a travesty".

Ms Soubry said: "We only found the situation whereby the administrators couldn't find a buyer in the last few days."

Labour MP Jim McMahon (Oldham West and Royton) called for Sir Philip's knighthood to be revoked.

He suggested that the tycoon is "not fit to lick the boots" of those who are losing their jobs "let alone be a knight of this realm".

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