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Sir Philip Green to be called to face MPs over BHS administration – live updates Sir Philip Green to be called to face MPs over BHS administration – live updates
(35 minutes later)
4.21pm BST
16:21
Only two remaining companies in the US with a AAA rating are $JNJ and $MSFT pic.twitter.com/9bpGgrUYHn
4.19pm BST
16:19
Meanwhile US oil giant Exxon Mobile has had its credit rating cut by Standard & Poor’s to reflect the plunge in crude prices:
#BREAKING: @ExxonMobil credit rating cut to AA+ from AAA by S&P ($XOM had enjoyed the highest rating since 1930) pic.twitter.com/F4NonyoxLD
Updated
at 4.22pm BST
4.13pm BST
16:13
Back with the US consumer confidence figures, which come before the latest Federal Reserve decision on Wednesday and Thursday’s US GDP numbers. Dennis de Jong, managing director at UFX.com, said:
While remaining steadfast, American consumers don’t appear to be wildly optimistic about the future which will help inform [Fed chair] Yellen and Co.’s decision on interest rates tomorrow. All eyes now turn to the Q1 GDP figures on Thursday, where the first effect of Yellen’s December interest rate rise will be seen.
4.02pm BST
16:02
Conservative MP Richard Fuller, who on Monday described leaving the idea of the taxpayer picking up the bill for the BHS pensions shortfall as “the unacceptable face of capitalism”, has demanded Sir Philip Green clarify his involvement in the demise of the retailer. He said (quotes from PA):
Green and Arcadia need to put out a statement immediately clarifying their position. He has a responsibility, a duty.
Arcadia should be made to make public the documents and correspondence between themselves and Retail Acquisitions so that we can ascertain if the correct due diligence was undertaken in terms of there being enough cash left in the business and to cover the pension liability.
If it’s found that the correct due diligence was not undertaken, the Sir Philip will face serious consequences.
Updated
at 4.02pm BST
3.36pm BST3.36pm BST
15:3615:36
The Press Association have confirmed that a letter of invitation will soon be winging its way to Sir Philip Green.The Press Association have confirmed that a letter of invitation will soon be winging its way to Sir Philip Green.
Asked whether Sir Philip would be called before the committee, Mr Field told the Press Association: “I am sure he will be invited to give evidence.”Asked whether Sir Philip would be called before the committee, Mr Field told the Press Association: “I am sure he will be invited to give evidence.”
Philip Green asked to appear before cross party committee of MPs to face questions over BHS. - Frank Field. Should be worth watching.Philip Green asked to appear before cross party committee of MPs to face questions over BHS. - Frank Field. Should be worth watching.
3.15pm BST3.15pm BST
15:1515:15
MPs summon Sir Philip Green for questioningMPs summon Sir Philip Green for questioning
Breaking: Sir Philip Green is being called to parliament to be questioned by the Work and Pensions Committee over the collapse of BHS.Breaking: Sir Philip Green is being called to parliament to be questioned by the Work and Pensions Committee over the collapse of BHS.
This follows committee chair Frank Field’s decision to open an inquiry into the impact of BHS’s administration (see earlier post).This follows committee chair Frank Field’s decision to open an inquiry into the impact of BHS’s administration (see earlier post).
They will investigate how BHS’s 571m pension deficit will affect Britain’s Pension Protection Fund, a rescue scheme funded by contributions from other pension pots.They will investigate how BHS’s 571m pension deficit will affect Britain’s Pension Protection Fund, a rescue scheme funded by contributions from other pension pots.
Sir Philip Green to be called before MPs to face questions over collapse of BHS, Work and Pensions Committee Chair, Frank Field saysSir Philip Green to be called before MPs to face questions over collapse of BHS, Work and Pensions Committee Chair, Frank Field says
UpdatedUpdated
at 3.27pm BSTat 3.27pm BST
3.10pm BST3.10pm BST
15:1015:10
The Wall Street Journal has a good piece on how many pension funds are struggling right now.The Wall Street Journal has a good piece on how many pension funds are struggling right now.
The Collapse of BHS is a Warning for the U.K’s Faltering Pension SchemesThe Collapse of BHS is a Warning for the U.K’s Faltering Pension Schemes
Here’s a flavour:Here’s a flavour:
The problems for BHS’s pension scheme are particularly acute, but it’s not alone by any means. Schemes all across Europe are being squeezed by two pincers: an increasing number of elderly people relative to the working population, and shrinking interest income.The problems for BHS’s pension scheme are particularly acute, but it’s not alone by any means. Schemes all across Europe are being squeezed by two pincers: an increasing number of elderly people relative to the working population, and shrinking interest income.
As long as those two trends continue, BHS isn’t going to be the last company to struggle under the weight of its pension liabilities.As long as those two trends continue, BHS isn’t going to be the last company to struggle under the weight of its pension liabilities.
And this graph underlines why the problem is getting worse:And this graph underlines why the problem is getting worse:
3.05pm BST3.05pm BST
15:0515:05
More disappointing US economic data:More disappointing US economic data:
BREAKING: Consumer confidence hits 94.2 in April, versus 96 estimate https://t.co/UKzx9ZP2s7BREAKING: Consumer confidence hits 94.2 in April, versus 96 estimate https://t.co/UKzx9ZP2s7
2.53pm BST2.53pm BST
14:5314:53
Christmas seems to come round earlier every year in the shops. But at BHS’s store in Friars Square, Aylesbury, staff are still trying to shift last year’s stock....Christmas seems to come round earlier every year in the shops. But at BHS’s store in Friars Square, Aylesbury, staff are still trying to shift last year’s stock....
End of April & still Christmas items on sale in #BHS - #endofanera? @WHS_Carpet pic.twitter.com/FbCS182k8KEnd of April & still Christmas items on sale in #BHS - #endofanera? @WHS_Carpet pic.twitter.com/FbCS182k8K
2.24pm BST2.24pm BST
14:2414:24
Michael White: Politicians in thrall to Philip GreenMichael White: Politicians in thrall to Philip Green
Back to BHS... and our veteran political commentator Michael White has written about how our elected masters have a blind spot when it comes to business bosses.Back to BHS... and our veteran political commentator Michael White has written about how our elected masters have a blind spot when it comes to business bosses.
Here’s a flavour of his latest Political Briefing.Here’s a flavour of his latest Political Briefing.
BHS paid Phil and Tina [Green] a lot of rent (£11m a year) on its 164 stores. Crafty or what! It’s the same story we heard when the Southern Cross care homes group collapsed in 2011. It had been financially re-engineered after being sold to Blackstone, the US private equity crowd. The homes were sold as a property business, then leased back at high rents by the care business. Together with falling local authority fees for elderly patients – that’s austerity for you – it bust the model.BHS paid Phil and Tina [Green] a lot of rent (£11m a year) on its 164 stores. Crafty or what! It’s the same story we heard when the Southern Cross care homes group collapsed in 2011. It had been financially re-engineered after being sold to Blackstone, the US private equity crowd. The homes were sold as a property business, then leased back at high rents by the care business. Together with falling local authority fees for elderly patients – that’s austerity for you – it bust the model.
The scandal at Boots exposed this month by the Guardian is quite different, but the idea is the same. Sweat the assets while loading the core business with debt, so you can move on and do it again.The scandal at Boots exposed this month by the Guardian is quite different, but the idea is the same. Sweat the assets while loading the core business with debt, so you can move on and do it again.
It’s the task of governments everywhere to hold the line, to see such activities are robustly regulated, their entrepreneurs honoured when they do well by society as well as themselves, jailed if they commit fraud, condemned when their legal manoeuvres are transparently immoral as some of King Phil’s have been – despite protests of injured innocence.It’s the task of governments everywhere to hold the line, to see such activities are robustly regulated, their entrepreneurs honoured when they do well by society as well as themselves, jailed if they commit fraud, condemned when their legal manoeuvres are transparently immoral as some of King Phil’s have been – despite protests of injured innocence.
Alas, Blair gave him the knighthood he wanted for “services to the retail industry”. And David Cameron? After King Phil repaid Labour for its obsequiousness by publicly backing the Tories in 2010, the new PM asked him to review government spending and procurement. Phil reported back that there’s a lot of waste. Angels wept.Alas, Blair gave him the knighthood he wanted for “services to the retail industry”. And David Cameron? After King Phil repaid Labour for its obsequiousness by publicly backing the Tories in 2010, the new PM asked him to review government spending and procurement. Phil reported back that there’s a lot of waste. Angels wept.
Here’s the full piece:Here’s the full piece:
Related: Philip Green: Blair gave him a knighthood, Cameron gave him a jobRelated: Philip Green: Blair gave him a knighthood, Cameron gave him a job
2.19pm BST2.19pm BST
14:1914:19
The latest economic data from America is a little disappointing, showing that the global economy may be weaker than hoped.The latest economic data from America is a little disappointing, showing that the global economy may be weaker than hoped.
Orders for durable goods, such as computers, kitchen equipment and even aeroplanes, rose by just 0.8% in March after a 3.1% slump in February. Economists expected a 1.8% recovery, so they’re now a little worried.Orders for durable goods, such as computers, kitchen equipment and even aeroplanes, rose by just 0.8% in March after a 3.1% slump in February. Economists expected a 1.8% recovery, so they’re now a little worried.
Separately, US house price growth has cooled to a 5.4% annual rate in February, down from 5.7% in January.Separately, US house price growth has cooled to a 5.4% annual rate in February, down from 5.7% in January.
1.31pm BST1.31pm BST
13:3113:31
Downing Street: Worrying time for BHS staffDowning Street: Worrying time for BHS staff
Prime Minister David Cameron’s official spokeswoman has declined to comment on criticisms of Sir Philip Green:Prime Minister David Cameron’s official spokeswoman has declined to comment on criticisms of Sir Philip Green:
She told today’s Lobby briefing that the government is concentrating on helping BHS staff.She told today’s Lobby briefing that the government is concentrating on helping BHS staff.
I’ve taken the quotes from the Press Association:I’ve taken the quotes from the Press Association:
“It is a worrying time for BHS staff and their families. We have now got the Pensions Protection Fund carrying out an assessment. It’s usual in this type of case for the Insolvency Service to also look into what’s happened. I think we need to let these assessments take place first.“It is a worrying time for BHS staff and their families. We have now got the Pensions Protection Fund carrying out an assessment. It’s usual in this type of case for the Insolvency Service to also look into what’s happened. I think we need to let these assessments take place first.
“We are currently focused on what this means for BHS staff moving forward and what the Government can do to support them.”“We are currently focused on what this means for BHS staff moving forward and what the Government can do to support them.”
12.52pm BST12.52pm BST
12:5212:52
It’s official: high street tailor Austin Reed has followed BHS into administration.It’s official: high street tailor Austin Reed has followed BHS into administration.
The move leaves around 1,100 workers facing redundancy. Administrators are hoping to sell the company as a going concern, so the stores are staying open for now.The move leaves around 1,100 workers facing redundancy. Administrators are hoping to sell the company as a going concern, so the stores are staying open for now.
Here’s the full story:Here’s the full story:
Related: Upmarket tailor Austin Reed goes into administrationRelated: Upmarket tailor Austin Reed goes into administration
The company is offering some chunky discounts today....The company is offering some chunky discounts today....
"Shop before it's too late", says Austin Reed's website https://t.co/ROxdHlGBh6 pic.twitter.com/kT98WB9c3n"Shop before it's too late", says Austin Reed's website https://t.co/ROxdHlGBh6 pic.twitter.com/kT98WB9c3n
12.23pm BST
12:23
Bad news for BHS: property agents have warned that a quarter of its high street stores would be hard to let to new tenants, while only 8% are in ‘prime’ locations.
That undermines the chances of a white knight buyer snapping up the whole company, argues Joanna Bourke of the Evening Standard. More here.
More than a quarter of BHS stores would "struggle" to be let in current property market, @CushWakeUK numbers show https://t.co/URjDtRQWEy
12.18pm BST
12:18
John Mann’s call for Sir Philip Green to lose his knighthood, unless he hands back £400m of dividend payments, puts more pressure on the Arcadia boss.
Julie Palmer, regional manager at business restructuring specialists Begbies Traynor, says it is becoming an issue of fairness and morality, not just legality.
She told the BBC earlier today that:
“[Sir Philip] is an astute businessman, I imagine he was advised and that all of that was done properly. There’s a moral issue that if we are facing a pensions deficit of £571 million do we look beyond the boundaries of legality at propriety instead? I understand he already is in discussions to make a voluntary payment which suggests he is aware.
“I don’t think the administrator will [bring moral pressure into it] but there are MPs already on the case. There are calls about whether he should be able to keep his knighthood. That’s all part of the pressure that is beginning to build.”
Via the Independent.
11.48am BST
11:48
Cameron visits Port Talbot steelworks
Breaking away from BHS again, Prime minister David Cameron is making a surprise visit to the troubled steelworks in Port Talbot, South Wales, today.
BREAK: PM David Cameron to visit steelworkers in Port Talbot shortly. Avoiding fire of #doctorsstrike but still into the furnace
BREAK David Cameron is Port Talbot now meeting unions and Tata management with Welsh Secretary Alun Cairns. Sajid Javid is not there.
More than 4,000 jobs are still at risk at the Port Talbot side, following Indian conglomerate Tata’s decision to sell up.
The government is offering to take a 25% stake in the steelworkers, plus debt relief, in an attempt to find a buyer. Cameron’s visit may be designed to show that Westminster hasn’t forgotten about the steel crisis.
As it happens, there’s a BHS store up the coast in Swansea - perhaps the PM could pop in there afterwards and offer workers his support....
11.28am BST
11:28
MPs to investigate BHS pension issues
The House of Commons Work and Pensions Select Committee has announced an inquiry into BHS’s pensions deficit.
The committee will examine how the UK’s Pension Protection Fund will cope with BHS’s £571m pension deficit.
The PPF steps in when a company cannot handle its pension liabilities, and is funded by levies on other pension schemes. So BHP’s costs will
Committee chair Frank Field says the BHS crisis has raised serious questions:
“We need as a Committee to look at the Pension Protection Fund and how the receipt of pension liabilities of BHS will impact on the increases in the levy that will now be placed on all other eligible employers to finance the scheme.
We will then need to judge whether the law is strong enough to protect future pensioners’ contracts in occupational schemes.”
Yesterday, MPs on all sides of the House of Commons expressed concern over the BHS crisis, particularly the pensions issue.
Conservative MP Steve Baker argued that the free market was seriously undermined when vast profits are privatised, and then similarly larges losses are swiftly dumped on taxpayers or pensioners.
And fellow Tory Richard Fuller said dumping pensions obligations on others was “the unacceptable face of capitalism”.
Updated
at 12.11pm BST
11.21am BST
11:21
Sir Philip Green has not enjoyed reading today’s newspapers:
Oh dear, looks like @DailyMirror has annoyed Philip Green. He's just told our biz ed that he plans to wipe his a*se with today's copy...
What did the Mirror do to earn such shocking opprobrium?
Well, today’s edition describes Green thus:
He’s the epitome of a self-made man or, depending upon your point of view, an icon of unmitigated greed. A foul-mouthed, tough-talking billionaire whose number-one aim is making money, and woe betide anyone who gets in his way.
Later adding.....
When he turned 50, his wife Tina reportedly gave him a solid gold Monopoly set. He celebrated the birthday by flying 200 pals to Cyprus for a lavish toga party, with Tom Jones entertaining them.
Green himself was dressed, according to business journalist Jeff Randall, as “a physically challenged Nero”. And for his 60th, he flew 150 guests to Mexico, allocated each 15 bottles of Pol Roger – worth £250 each – and had Stevie Wonder and the Beach Boys perform.
Here’s the full story: BHS boss Philip Green built his empire on cost-cutting and ruthless deals
10.49am BST
10:49
Here’s a reminder of just how much money the Greens received from BHS during their 15-year ownership:
10.24am BST
10:24
Labour MP: Green Must Repay BHS Dividends or Lose Knighthood
Labour MP John Mann has called for Sir Philip Green to be stripped of his knighthood, unless he returns the dividends paid to his family from BHS.
Mann argues that Green should hand back the £400m which he received from BHS, to help cover the £571m pension black hole.
In a statement, Mann says:
“Sir Philip Green and his family have made millions out of BHS and its hard working staff. He took over a company with a healthy pension pot, yet when he sold BHS a black hole had appeared in its fund.”
“Sir Philip Green has taken over £400 million out of the company and now must be held responsible for the actions that were taken under his stewardship.”
“There is a very simple and honourable solution to this crisis; repay the dividends, live up to the name he has chosen for his new yacht, ‘Lionheart’, or lose his knighthood.”
It’s rare to see a Labour MP agree with the Daily Mail, but on this issue Mann is in complete agreement with the mid-market paper (see earlier post).
A simple & straightforward way to deal with the BHS crisis, Sir Philip pays up or loses his knighthood. https://t.co/heJJKXKgoq
Updated
at 10.53am BST
10.18am BST
10:18
The pound hit a 10-week high this morning, as bookmakers slash the odds of Britain remaining in the European Union.
Sterling has gained almost a cent against the US dollar, to $1.457, as traders anticipate that the Remain campaign will win the June 23 referendum.
Client from Southend has staked £6000 on Brexit, but Remain now a shortest yet 1/4 to be outcome of EU Ref, with Brexit longest yet 3/1.
9.42am BST
09:42
Another high street name, fashion retailer Austin Reed, is collapsing into administration this morning.
Revealed: Austin Reed to call in AlixPartners as administrator this morning, risking 1000 more British high street jobs. Full story up soon.
The announcement could come at 11am, we hear.
Updated
at 9.45am BST
9.38am BST
09:38
In another triumph for free market capitalism, Scottish Power has been slapped with an £18m fine for unacceptably poor customer service.
Angela Monaghan explains:
Dermot Nolan, Ofgem’s chief executive, said Scottish Power’s treatment of gas and electricity customers had been “discernibly worse” than its peers.
Speaking on BBC Radio 4’s Today programme, he added: “This is a significant amount of money. It’s basically because Scottish Power failed to treat its customers fairly over a sustained period of time.”
Related: Scottish Power fined £18m for poor customer service