Businesses take fright after Brexit vote, as Philip Green faces mounting criticism over collapse of BHS
Frank Field says Green worse than Maxwell
Farron: Knighthood must go
Union: BHS staff suffering consequences
What the papers say
Read the full report here
11.21am BST
Here’s some instant reaction to the tumble in UK business confidence:
Ouch. UK surveys not weathering Brexit storm so well, at least so far. CBI business optimism off 42 points to -47, low since Q1 2009.#brexit
For all the banging on about weaker sterling helping exporters, doesn't look like manufacturers are actually expecting that right now.
UK business confidence drops to lowest since financial crisis after Brexit - CBI https://t.co/M3SzMRFWTe pic.twitter.com/RY3E4nIY7I
Visual representation of the post Brexit CBI business optimism reading which came in at -47 pic.twitter.com/INburNBoFM
11.13am BST
Breaking away from BHS.... a new survey has shown that confidence among UK manufacturers has slumped sharply to a six-year low.
Total order books were broadly the same as in June (-4%, from -2% in June) but export order books deteriorated (-22%, from -14% in June).
CBI industrial trends survey shows output for manufacturers rise in Q2 - but biggest drop in biz optimism since 2009 pic.twitter.com/Tf6iCs6WMQ
It’s clear that a cloud of uncertainty is hovering over industry, post-Brexit. We see this in weak expectations for new orders, a sharp fall in optimism and a scaling back of investment plans.
“So, it’s important now for the new Government to steady the ship with a plan, and a clear timetable, for negotiating the UK’s relationship with the EU. This, along with a renewed focus on industrial strategy, will help give firms the confidence they need to grow and create jobs.
10.56am BST
BHS’s stores are a pretty depressing place right now, as hopes of a rescue deal continue to fade.
These photos from the Wood Green store shows how administrators are cracking on with the closing down process; even putting mannequins up for sale:
10.31am BST
Liberal Democrat leader Tim Farron has called on the Cabinet Office to speed up its review into whether Sir Philip Green should be stripped of his knighthood.
“Philip Green has exploited his way into filling his own pockets. It is clear that he tore off pieces of BHS to fund his lavish lifestyle at the expense of the business and those people who had put their lives into making the company a success.
“11,000 people are now significantly worse off because of one man’s greed.
10.28am BST
John Mann, Labour MP for Bassetlaw, has urged the government to begin the process of removing Sir Philip Green’s knighthood.
He argues that prime minister Theresa May must deliver on her pledges to make Britain a fairer country:
“In her first speech as Prime Minister Theresa May stated that her Government would be driven, not by the interests of the privileged few but by yours. She must now clearly show that was not just a soundbite by holding Philip Green to account for his actions and announcing the removal of his knighthood.”
“He left a company in dire circumstances and a pension scheme with a massive deficit of over £400 million. A very privileged few benefitted from BHS and due to their actions thousands will now be worse off through no fault of their own.”
10.25am BST
One of the many pieces of evidence uncovered by MPs is a handwritten note, outlining BHS’s balance sheet before the sale to Dominic Chappell.
Signed by Chappell and Green, it shows that the company would have £94.16m of working capital - just above the minimum needed – but also faced looming VAT and national insurance (NI) demands:
The parliamentary report on BHS includes a hand-written (and massaged) balance sheet prepped ahead of its sale. pic.twitter.com/LQJ1D0yNG4
9.47am BST
My colleague Graham Ruddick reckons Green’s knighthood is on the line:
The MPs report is brutal for Sir Philip Green. No holding back. Paints a picture of man who consistently exploited BHS for own ends
This could mean loss of knighthood: “little to support the reputation for retail business acumen for which he received his knighthood”
For anyone who wants to read the full BHS report, its here. Reads more like a novel at times https://t.co/FQcobCTAVB
9.42am BST
Today’s report finds that Philip Green “repeatedly resisted” requests from the BHS pension trustees to put more money into the fund, to prevent it sliding into a deficit.
It says:
Such contributions were not charitable donations: they were the means of the employer meeting its obligations for deferred pay. Sir Philip had a responsibility to be aware of the growth of the deficit and he was aware of it.
That there is a massive deficit is ultimately his responsibility.
The report exposes the tensions between shareholder and pension scheme member interests, and poses some important questions about how we manage these tensions for the thousands of other schemes which continue to operate under the shadow of substantial deficits.
The immediate future holds some significant threats. The possibility of an economic slowdown and increasing inflation could exacerbate an already unsustainable mismatch between the promises made to some scheme members and the ability of sponsoring employers ever to pay for those promises.
9.13am BST
The government has admitted that more needs to be done to avoid a repeat of the collapse of BHS.
A spokesman says:
“This case shows why the Government is determined to tackle corporate irresponsibility and reform capitalism so it works for everyone - not just the privileged few.
“Today’s report is very concerning, and the Insolvency Service is now carrying out an accelerated investigation. Job centres are also standing by to provide support and advice to those who were affected. But in the long run we need to do more to prevent this kind of irresponsible and reckless behaviour.”
9.09am BST
Philip Green is likely to choke on his cornflakes over some of today’s front-page headlines, says retail analyst Nick Bubb:
“The Shaming of Sir Shifty” trumpets the Daily Mail, “Sir Philip Green slammed in BHS Report” says CityAM (with a nice photo of a shifty-looking Philip Green), “Green’s reign at BJHS torn apart by MPs” in the Guardian and “Green must pay for BHS plunder” says the Telegraph, whilst the Committee’s assertion that Philip Green is “the unacceptable face of capitalism” is widely repeated.
The FT, however, takes a different tack, with the headline “MPs blame Goldman for lending credibility to doomed BHS deal”.
8.46am BST
Frank Field agrees that many other people and organisations are also to blame for the demise of BHS.
That includes Grant Thornton, Olswang and Goldman Sachs, who were all involved in the fateful sale of BHS to Dominic Chappell in 2015.
Unlike Maxwell, who was bankrupt when he threw himself off his boat [in 1991], this person [Green] has wealth beyond the dreams of avarice, and he should act.
Wow. Frank Field says Philip Green is "much worse" than Robert Maxwell, because Maxwell wanted to pay the money back. #r4today
8.37am BST
Sir Philip Green is “worse than Robert Maxwell” over his handling of the BHS pension black hole, Frank Field MP claims on the Today Programme.
Q: What must Green to do sort BHS out?
He keeps saying he’s going to sort it out.
He needs to get his chequebook out and write a cheque to cover the huge pensions deficit.
Maxwell, I’ve always thought, meant to pay the money back. He was just going all over the place, borrowing money to keep his companies going. When the music stopped, he had no money.
Now, the music has stopped [at BHS], and there’s someone there who’s managed to catapult themselves towards the top of the Sunday Times Rich List.
8.29am BST
Frank Field, chair of the Work and Pensions committee, is laying into Philip Green’s conduct on that Today Programme.
He borrowed billions against BHS and Arcadia, and a large part of that money went through his companies up to Lady Green.
He has a huge responsibility here.
This was a group of companies that were run by somebody who behaves like Napoleon, who has a collection of people around him who do what he wants. There is no corporate governance, as there would be in a public company.
8.19am BST
The Financial Times is struck by the criticism of Goldman Sachs in today’s report, for helping Green to sell BHS to Dominic Chappell last year:
The FT says:
Goldman Sachs has been blamed by MPs for lending a “lustre” of credibility to a doomed deal to rescue BHS, the retailer formerly owned by Sir Philip Green which subsequently collapsed with the loss of 11,000 jobs in one of Britain’s biggest corporate failures.
The MPs said the bank had been currying favour with its billionaire client by helping Sir Philip pull off the “otherwise questionable” sale, which it branded the “unacceptable face of capitalism”.
“We regret that Goldman Sachs underplayed to us the nature and extent of their role.
MPs finger Goldman Sachs for role in doomed deal leading to BHS collapse https://t.co/GfsGFiVL7a via @FT
8.11am BST
Over in the City, shares in William Hill have surged by 11% after rival bookmaker 888 made a preliminary takeover approach.
8.09am BST
Dave Gill, national officer at the Union of Shop, Distributive and Allied Workers (USDAW) trade union, has discussed the report on Radio 4’s Today Programme.
Q: This report must make the grimmest of grim reading for BHS’s workers?
It’s a damning report. The consequences of the actions of a handful of people running BHS is now being felt by 11,000 hard working, dedicated and loyal staff.
It’s still ongoing. 20 stores closed last Saturday, and 30 are due to close next Saturday.
We’re in constant contact with the administrators, and they are still looking for buyers for another 120 stores.
I hope not, not to the level at BHS. But I hope the government will take this report on board and learn from it.
Whether he keeps his knighthood or not isn’t relevant from our point of view....
The issue for people who work at BHS now is the pension deficit, and their employment.
7.57am BST
The BHS scandal has tarnished the reputation of British business, according to Iain Wright, chair of the BIS committee (which co-produced the report).
Writing in the Daily Mirror, Wright calls for a shake-up of ethics and accountability to avoid a repeat.
Just a few weeks on from his rude, unprofessional and bad-tempered appearance at our inquiry, Sir Philip has been pictured on board his multi-million pound superyacht.
Back in Britain, the demise of BHS has left a trail of destruction of job losses, squeezed pensions and uncertain futures for companies reliant on the once great retailer’s supply chain.
My article in @DailyMirror on the sorry and tragic #BHS story - Sir Philip Green has tarnished business reputationhttps://t.co/bGjGddoNXp
7.53am BST
The BHS report is the lead story on many of Britain’s newspapers today:
The Guardian front page, Monday 25 July 2016: Green’s reign at BHS torn apart by MPs pic.twitter.com/BppxkDoHyy
Monday's Daily Mail front page:
The shaming of Sir Shifty#tomorrowspaperstoday #bbcpapers pic.twitter.com/crbny7Rsez
Monday's Times front page:
Billionaire’s greed led to collapse of BHS chain#tomorrowspaperstoday #bbcpapers pic.twitter.com/Tb7MCGcps9
Monday's Metro front page:
Philip Greed#tomorrowspaperstoday #bbcpapers pic.twitter.com/dGvH7mUZG3
Monday's Daily Telegraph front page:
'Green must pay for BHS plunder'#tomorrowspaperstoday #bbcpapers pic.twitter.com/BmEClNlsQ0
7.48am BST
You can read the full parliamentary report into the failure of BHS here:
The report documents the systematic plunder of BHS at the cost of the 11,000 jobs and 20,000 people’s pensions now at risk. Sir Philip Green, Dominic Chappell and the respective directors, advisers and hangers-on who all got rich or richer are all culpable, with the only losers the ordinary employees and pensioners.
The Committees say this is “the unacceptable face of capitalism” and that the story of BHS begs much wider questions about the gaps in company law and pension regulation that must be addressed. The two Committees will now turn to those question in new inquiries.
The headline figures that Sir Philip bought BHS for £200 million and sold it 14 years later for £1 cannot disguise the true picture. He did not invest in the company and then unfortunately fail to make it succeed. Sir Philip systematically extracted hundreds of millions of pounds from BHS, paying very little tax and fantastically enriching himself and his family, leaving the company and its pension fund weakened to the point of the inevitable collapse of both. Lady Tina Green is still being paid tens of millions of pounds of tax free repayments on the loan that was engineered to sell BHS from one Green family business to another, and will be for some years to come.
7.41am BST
Labour MP John Mann is leading the calls for Green to lose his knighthood:
It remains an outrage that Philip Green has not been stripped of his knighthood and forced to pay back into the pension fund of BHS staff
Re Philip Green etc: What an impressive politician Frank Field is. Thank goodness someone is getting on with the job.
7.30am BST
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
The big news this morning is that Sir Philip Green has been eviscerated by MPs over his handling of the BHS retail chain, which collapsed earlier this year.
“[Green’s] reputation as the king of retail lies in the ruins of BHS. His family took out of BHS and Arcadia a fortune beyond the dreams of avarice and he’s still to make good his boast of ‘fixing’ the pension fund.
What kind of man is it who can count his fortune in billions but does not know what decent behaviour is?”
Related: Sir Philip Green's reputation ripped apart in damning report on BHS demise
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