BHS: Cameron faces ‘unpleasant & unacceptable face of capitalism’ test

In Uncategorized on April 25, 2016 by kmflett


In May 1973 following a Court case the then Tory Prime Minister Ted Heath referred in the Commons to the activities of London based southern African mining firm Lonhro as the ‘unpleasant and unacceptable face of capitalism’.

The phrase has entered the historical record as an example of a Conservative Prime Minister drawing a moral limit to how far free market capitalism might go.

With the news today that BHS has entered administration David Cameron faces a similar test.

Let’s accept for the moment that it was not that likely that BHS in its current form could be saved whoever ran it.

A bottom line issue now is how its 11,000 employees fare as opposed to those who were and still are running it.

The man who sold BHS Philip Green is a wealthy businessman who reportedly is currently in the process of buying his third luxury yacht. He has offered £80m towards pensions costs, given that the BHS scheme had a large financial hole in it when he sold it. So far the pensions regulator has not accepted the money.

The man who bought BHS, a venture capitalist with a rather mixed track record, Dominic Chappell, is reported to have taken substantial professional fees and other costs out of the Company he was meant to be trying to save.

The 11,000 BHS employees face the sack (their wages are only guaranteed for this month) and if their pension enters the Pension Protection Fund they will see that reduced as well.

Of course tough though this is they can do something about it. They may be able to get another job and will probably have to work longer to make up their pension shortfall.

Even less fortunate are BHS pensioners. They may also face a cut in their pensions currently in payment and frankly since they are retired there won’t be much they can do about it except see a reduction in their standard of living.

It seems rather unlikely that Philip Green or Dominic Chappell will face such problems.

The question for David Cameron now is whether he echoes the words of Ted Heath and accepts that this is another example of the ‘unpleasant and unacceptable face of capitalism’


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