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Philip Green and bad business – Lib Dems must act firmly

by Ian Shires on 2 December, 2020

Philip Green and bad business – Lib Dems must act firmly

The collapse of Philip Green’s retail empire, Arcadia is a sad case of history repeating itself. It is only 4.5 years since BHS went into administration, and whilst Green was no longer the owner then, having sold it for £1 in 2015 to the serial bankrupt Dominic Chappell, it was under Green’s ownership in the previous 15 years that the under-investment and plundering of profits led to the situation where the chain was no longer viable.

Retail analysts are commenting that a similar set of circumstances mean Arcadia is now not fit for purpose. The shops look tired, and there has been a failure to embrace online technology at a time when going to physical shops is difficult for many customers. Additionally, Green is reputed to have taken huge dividends out of Arcadia – £1.2billion in 2005, all of which is safely secured in his wife’s name in the tax haven of Monaco.

Of course, this is an unparalleled time of difficulty for the retail sector, but as in all challenging situations, it is the strong who have the best chance of surviving.

Sadly, as in the case of BHS, it is not just the 13,000 employees of Arcadia – many of whom are also carers – facing possible unemployment who will suffer. The ripples spread widely to the supply and distribution network, at a time when so many people are facing huge financial uncertainty and difficulties. Moreover, then, of course, there are the pensioners. Like BHS, Arcadia has a big hole in its pension scheme – probably in the region of £350m. Earlier this year the Greens came to a shameful agreement with the Pension Regulator to cut the deficit reduction payments that the company was making to the Pension Scheme. However, the Regulator is believed to have insisted that Green’s wife Tina, the nominal owner, must pay a relatively paltry £100 million over three years to help plug the hole.

Meanwhile, some press reports indicate that the Greens will be spending Christmas in a luxury resort in the Maldives, that can cost up to £30,000 per night. Contrast that with the gross pay of an Arcadia employee on the minimum wage – just over £18,100 per year. The Greens are both heartless and shameless.

LibDems must use Parliament to call out bad business practices like this. For a start, what about holding de Pfeffel Johnson to account? A PMQ or other mechanism to demand he condemn the Greens, and a motion insisting that they fill the entire pension deficit before relinquishing the businesses would be a good start. And what about a referral to the Honours Committee to re-examine whether he should be stripped of his knighthood? It would also demonstrate clearly whose side we are on. This is not a time for half measures.

 

* Nigel Lindsay is a former Liberal councillor in Aberdeen and a longtime activist in the party, but consider himself an internationalist first and foremost.

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