Morning Call: pick of the papers

The ten must-read comment pieces from this morning's papers.

1. Miliband needs to be bolder on EU and immigration (Daily Telegraph)

Instead of offering a strong lead, the Labour Party leader risks giving the initiative to the Tories, says Mary Riddell.

2. Europe: no more talk of in-or-out. Let's think opt-outs (Guardian)

The EU treaties are not fit for purpose, but leaving makes no sense, says Simon Jenkins. Negotiation is possible without risking free trade.

3. Don’t be the PM who takes us out of Europe (Times) (£)

David Miliband imagines what advice John Major might offer David Cameron.

4. Japan should rethink its stimulus (Financial Times)

The real problem is a return to deflation and an overvalued currency, says Adam Posen.

5. The big chains simply cannot rival the choice or the price of online retailers (Daily Mail)

The high street as we knew it, and perhaps in some cases even loved it, is becoming history, writes Simon Heffer.

6. Towards a fairer capitalism: let's burst the 1% bubble (Guardian)

Talk of a more moral capitalism is just hot air unless we rehabilitate and reward the idea of value creation, writes Mariana Mazzucato.

7. Don't let HMV drown in the Amazon (Independent)

A scaled-down operation that adopts more of the "niche" principles of modern business thinking could yet thrive, says an Independent editorial.

8. Berlin slows down (Financial Times)

It is time for German companies to end pay restraint, argues an FT editorial.

9. The BA Christian case was judged rightly, and a true test of tolerance (Guardian)

Nadia Eweida's religious reasons for wearing a cross at work should not have been trampled on by BA's uniform policy, argues Andrew Brown.

10. We should not pay a penny of RBS’s fraud fine (Independent)

The cost, which could rise above £300m, should come out of the bankers' bonus pool, writes Andreas Whittam Smith.

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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.