Philip Green: Blair gave him a knighthood, Cameron gave him a job
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Version 0 of 1. Fair-minded Guardian readers who understand that not all rich people are tax dodging, undeserving parasites (they’re not) will have known for over a decade that Phil “king of the shops” Green, the dealmaker at the centre of this week’s BHS scandal, is a bit of a market trader, despite the private education and the cutlery canteen full of silver spoons from mum and dad. Why so? Because when, in 2003, then Guardian City reporter, Ian Griffiths – a qualified accountant – published a challenging analysis of the great man’s finances, he unleashed a foul-mouthed tirade against the reporter and the paper which is still worth reading. You’ll especially love the bit about the then financial editor, Paul Murphy, being unable to read English “because he’s a fucking Irishman”. These days the illiterate Murphy is back at the FT running its Alphaville column. In 2003, he printed the exchanges. Suddenly the “colourful” Green, famous in the grey world of the City for his verbal flamboyance when courting the press, looked a much darker colour. When 11,000 jobs and a lot of pensions are at risk over the collapse of the ailing store group from which he extracted £586m, let’s not waste any more time on King Phil (I’ve informally stripped him of his knighthood), his hurt feelings or embarrassingly vulgar yachts, except to say that – yet again – that Tony Blair was a credulous sucker for a rich man with tax-shy habits. Blair recommended him for a knighthood in 2006. Here’s what tax expert, Richard Murphy, briefly a star in Jeremy Corbyn’s leadership firmament, said at the time about Phil and his tax arrangements. Here’s what Prem Sikka, professor of accountancy (what would he fucking know, eh, Phil?) says now about the wider complicity of UK company law (not the fault of Brussels, eh Boris?). And here’s Nils Pratley’s verdict on the firm which Green sold to an ex-bankrupt, boy racer for £1 in 2015. It’s not just illiterate or Irish Guardian lefties who are on the case now, as the Green stable door bangs in the wind. Alex Brummer, City editor at the Mail (ex-Guardian too from way back) is pretty rude, as is his paper. I can only find one columnist, FT City editor, Jonathan Guthrie, who writes in the Lombard spot, making a half-hearted attempt (paywall) at a defence (he should have sold BHS earlier to avoid opprobrium). Even Guthrie says Phil should cough up half the £560m hole in BHS’s pension fund, not the reported £40m he’s offered to the hard-pressed Pension Protection Fund. Over at FT Alphaville the illiterate Murphy is much tougher (paywall). By coincidence the Sunday Times’ grisly annual ritual of materialistic prurience – the Rich List 2016 – was published just as the shadow finally fell across those low-paid BHS workers’ jobs and pensions. King Phil and his wife, Queen Tina – she’s a businesswoman who conveniently owns a lot of the family’s wealth – come in at No 29 this year, their £3.2bn total was £280m down on the previous year after the sale of exhausted BHS for the price of an ice lolly. I checked the Rich List to see if Tony and Cherie Blair had finally made it. There was no sign of them but one unhappy feature of Blair’s and Margaret Thatcher’s legacy is that Britain now has 120 billionaires. With 77, London is ahead of New York with 61 and has more than the whole of Germany (66). They’ve had a tough year, you may be sorry to learn. Do they live here for tax purposes? I’m afraid it’s not that sort of list. There’s a wider issue of corporate governance here. Green is a tough and ruthless businessman, now based in low-tax Monaco. Most of his £3bn is based on his shrewd purchase of BHS in 2000. He failed to save it, taking more out than he put in, but it was the key to his later success with the Arcadia group – Topshop and the rest – along with clever financial engineering of real estate. BHS paid Phil and Tina 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. 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. |