Lib Dem source: "hell will freeze over" before Chris Rennard resumes roles

A party source rejects the former chief executive's suggestion that he could resume his roles after being cleared of sexual harassing female party members.

There's been outrage among Lib Dem activists this afternoon at the announcement that an independent party review has cleared former party chief executive Chris Rennard of sexually harassing female members and that no further disciplinary action will be taken. QC Alastair Webster said Rennard "ought to reflect upon the effect that his behaviour has had and the distress which it caused", and that "an apology would be appropriate, as would a commitment to change his behaviour in future". He added, however, that "it is my judgment, considering all of the evidence collected, that it is unlikely that it could be established beyond reasonable doubt that Lord Rennard had intended to act in an indecent or sexually inappropriate way. Without proof of such an intention, I do not consider that such a charge would be tenable."

In the statement he issued in response, Rennard went as far as to claim that he looked forward to resuming his "roles within the Liberal Democrats", prompting even greater anger among activists. But when I put this suggestion to a Lib Dem source, I was told that "hell will freeze over" before Rennard returns to his previous posts.

I'm told that a statement from Nick Clegg will be issued at some point this afternoon. Here's what party president Tim Farron has said on the subject:

"The Liberal Democrats have taken the allegations made against Lord Rennard extremely seriously, which is why we appointed an eminent and experienced QC to examine the evidence. As a party we have no choice but to accept Alistair Webster QC's conclusions, but that does not mean I am content. Lord Rennard is not a current employee of the party and therefore the threshold that must be met for disciplinary action is higher than if this was a company HR procedure. In Alistair Webster QC's view, that threshold was unlikely to be met.

"While this process has not found to a criminal standard of proof that Lord Rennard acted with indecent intent, it is clear that he did not behave in the way that a chief executive should behave. Lord Rennard must reflect on his actions and apologise to the women involved.

"These allegations prompted the party to take a long, hard look in the mirror. The Liberal Democrats are, and must always be, a party where everyone is treated with respect."

Update: Here's Clegg's statement: "People in positions of authority should never subject anyone to behaviour which is offensive or inappropriate. It is as simple as that. I want everyone to be treated with respect in the Liberal Democrats. That is why it is right that Chris Rennard has been asked in the report to apologise, to reflect on his behaviour and why he won't be playing any role in my general election plans for the campaign in 2015."

Chris Rennard with Ming Campbell at the Liberal Democrat conference in 2006. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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BHS is Theresa May’s big chance to reform capitalism – she’d better take it

Almost everyone is disgusted by the tale of BHS. 

Back in 2013, Theresa May gave a speech that might yet prove significant. In it, she declared: “Believing in free markets doesn’t mean we believe that anything goes.”

Capitalism wasn’t perfect, she continued: 

“Where it’s manifestly failing, where it’s losing public support, where it’s not helping to provide opportunity for all, we have to reform it.”

Three years on and just days into her premiership, May has the chance to be a reformist, thanks to one hell of an example of failing capitalism – BHS. 

The report from the Work and Pensions select committee was damning. Philip Green, the business tycoon, bought BHS and took more out than he put in. In a difficult environment, and without new investment, it began to bleed money. Green’s prize became a liability, and by 2014 he was desperate to get rid of it. He found a willing buyer, Paul Sutton, but the buyer had previously been convicted of fraud. So he sold it to Sutton’s former driver instead, for a quid. Yes, you read that right. He sold it to a crook’s driver for a quid.

This might all sound like a ludicrous but entertaining deal, if it wasn’t for the thousands of hapless BHS workers involved. One year later, the business collapsed, along with their job prospects. Not only that, but Green’s lack of attention to the pension fund meant their dreams of a comfortable retirement were now in jeopardy. 

The report called BHS “the unacceptable face of capitalism”. It concluded: 

"The truth is that a large proportion of those who have got rich or richer off the back of BHS are to blame. Sir Philip Green, Dominic Chappell and their respective directors, advisers and hangers-on are all culpable. 

“The tragedy is that those who have lost out are the ordinary employees and pensioners.”

May appears to agree. Her spokeswoman told journalists the PM would “look carefully” at policies to tackle “corporate irresponsibility”. 

She should take the opportunity.

Attempts to reshape capitalism are almost always blunted in practice. Corporations can make threats of their own. Think of Google’s sweetheart tax deals, banks’ excessive pay. Each time politicians tried to clamp down, there were threats of moving overseas. If the economy weakens in response to Brexit, the power to call the shots should tip more towards these companies. 

But this time, there will be few defenders of the BHS approach.

Firstly, the report's revelations about corporate governance damage many well-known brands, which are tarnished by association. Financial services firms will be just as keen as the public to avoid another BHS. Simon Walker, director general of the Institute of Directors, said that the circumstances of the collapse of BHS were “a blight on the reputation of British business”.

Secondly, the pensions issue will not go away. Neglected by Green until it was too late, the £571m hole in the BHS pension finances is extreme. But Tom McPhail from pensions firm Hargreaves Lansdown has warned there are thousands of other defined benefit schemes struggling with deficits. In the light of BHS, May has an opportunity to take an otherwise dusty issue – protections for workplace pensions - and place it top of the agenda. 

Thirdly, the BHS scandal is wreathed in the kind of opaque company structures loathed by voters on the left and right alike. The report found the Green family used private, offshore companies to direct the flow of money away from BHS, which made it in turn hard to investigate. The report stated: “These arrangements were designed to reduce tax bills. They have also had the effect of reducing levels of corporate transparency.”

BHS may have failed as a company, but its demise has succeeded in uniting the left and right. Trade unionists want more protection for workers; City boys are worried about their reputation; patriots mourn the death of a proud British company. May has a mandate to clean up capitalism - she should seize it.