Had a Martian landed in London last Wednesday, they would have been flabbergasted watching Sir Philip Green clash with MPs over his role in the BHS collapse. Here was the retail chain’s former owner, knighted for services to the industry, arguing about it with MPs.
It is worth reading the transcript of the raucous six-hour hearing between the billionaire and the parliamentary committee. Green comes across even worse in print than he did in person.
He was evasive, obtuse and arrogant. MPs were left without answers to key topics because Green bullied them off the subjects. “Sir, which bit of ‘don’t remember’ is difficult for you to listen to,” he told Richard Graham at one stage.
Although Green started the hearing by apologising to BHS staff, the fact that 11,000 people are set to lose their jobs and part of their pensions appeared lost on him. “I want to try to get back to work after this. I’ve been out of work for four weeks,” he said.
Green was visibly frustrated when the discussion moved away from the agenda he was trying to set, or in an “uncomfortable” direction.
The tycoon pleaded ignorance over some issues and constantly tried to second-guess the motives behind the questions being asked. Green appeared wary of being caught out by MPs and frequently insisted he did not tell lies.
Perhaps his attitude was a result of the fact that “life’s moved on”. Those were the words he used when asked if he would consider buying BHS back.
When challenged by Frank Field, who said life had not moved on for the 11,000 losing their jobs, he replied: “With respect, hopefully, 7,000 or 8,000 people are part-time in the retail business. I am not … saying it’s acceptable, but I think – hopefully – the part-time people will get a job.”
Only time will tell whether that is accurate, but it seemed a casual remark to make about people’s livelihoods.
Green clearly does care about the BHS situation – even if it is just because he fears for his knighthood. (Towards the end of the hearing, he gave MPs an unprompted description of his contributions to the Retail Trust charity and the Fashion Retail Academy, a shameless attempt to protect his reputation.) If he had made no commitment to sort out the pension situation, calls to strip him of the honour would have become deafening.
As it is, we must wait to see what Green comes up with. Given that BHS collapsed nearly two months ago, and he sold the business a year ago, the lack of detail about his rescue plan suggests it has been rustled up quickly as criticism has mounted. But given Green’s insistence on his truthfulness and that he will not run away from the BHS debacle, he should be given the chance to come up with something.
Green’s evidence raised further questions about BHS’s demise and the role of advisers. Despite saying he did not want to shift blame for the collapse and the decision to sell it to Dominic Chappell, he has rightly dragged Chappell’s advisers into the scandal.
Olswang and Grant Thornton have made £8m from acting for Chappell’s consortium, RAL, according to Green, and should be forced to explain why they represented a man who has been made bankrupt three times. Green suggested the firms were employed “on contingency”, meaning the size of their fees depended on RAL managing to buy BHS. As a result, he is implying, they had little incentive to stop the deal.
The BHS saga has shone an unflattering light not just on Green, but also on the way business is run in Britain today.
Why pile on the agony? Greece needs its debts written off now
Greece finally gets its money this week. After the usual shilly-shallying, Athens will receive its latest €7.5bn loan tranche and thus be able to keep paying its bills. For once the old lie is true: the cheque really is in the post.
But it would be a mistake to think the Greek crisis is over. Youth unemployment is above 50%, the banking system is shot and the chances of the Syriza-led government embarking on meaningful structural reform are slim.
The 30% contraction of the economy in the past six years has saddled Greece with a colossal debt problem. The national debt as a share of GDP has risen from 100% in 2007 to 180% and according to the IMF will carry on rising to 250% by 2060.
Eurozone finance ministers have agreed to measures designed to smooth Greece’s debt payments over the coming years. They also dangled the possibility that Athens would be given more time to pay its creditors and have the interest rate on its debts reduced.
The theory is that this package will gradually reduce Greece’s debt burden provided the country keeps to its side of the bargain – namely to run budget surpluses, excluding interest payments, of 3.5% of GDP every year. Greece would also have to grow at the levels projected by the IMF, with nominal GDP growth – before inflation is taken into account – of 4% a year for the next four years and 3.2% a year thereafter.
In reality, there seems little prospect of these forecasts being met. Against a backdrop of the refugee crisis and Britain’s EU referendum, and with elections in Germany looming next year, the Greek problem has been parked for the time being. There will be a short-term reduction in debt payments but the long-term picture has not changed.
The fact is that, bit by bit, Greece has turned into a third world country inside the EU. And as a third world country it needs a generous debt write-off, not in 20 years’ time but right now.
VW hopes electricity will power it back into pole position
It is quite a bright move by VW, one of the world’s top three carmakers, to try to reposition itself as a leader in “green” transport with a new 30-strong range of all-electric cars.
Traditional car sales at VW have stalled recently, following revelations it had been cheating on diesel emission tests. So it needs a new start, and you cannot cheat on electric vehicle (EV) emissions because there aren’t any.
It is also wise for the German auto manufacturer to accelerate into the EV market because volumes are growing fast after a slow start. Around a quarter of all car sales in Norway are now either EV or hybrid models, which combine electric power with conventional fuel.
VW says that it hopes that all-electric cars will account for between 20%-25% of its total annual sales within a decade. It will cost billions of euros of new investment: but it could just light up sales again.
