Morning Call: pick of the papers

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

1. The Prime Minister's speech on the economy asserted the incredible in defense of the indefensible (Independent)

There are many credible alternatives to the current stance of economic policy, which would deal with the deficit while promoting growth, argue David Blanchflower and Adam Posen.

2. Theresa May-nia won’t become contagious (Times) (£)

The Home Secretary has the grit to be an accomplished PM but her lack of warmth will stop her reaching No 10, says Tim Montgomerie.

3. Cameron's days at No 10 may be numbered, but the national agenda is still set by the right (Independent)

The Prime Minister is surrounded by ideological crusaders and they've succeeded in turning the politically impossible into the politically inevitable, says Owen Jones.

4. Britain needs an activist chancellor (Financial Times)

The coalition government should do more to boost growth, says an FT editorial.

5. The Falklands: a vote with no purpose (Guardian)

Britain is alone in the world if it thinks that the Malvinas referendum will decide this dispute, writes Alicia Castro.

6. A good engineer who knows his own limits (Financial Times)

Ben Bernanke’s Fed has been the only serious US economic actor, says Edward Luce.

7. David Cameron may last even as he leads his MPs to their doom (Guardian)

Tory backbenchers fear a repeat of 1997 at the next election. But that doesn't mean any of them have the courage to act on it, writes Gaby Hinsliff.

8. Ed dreams of win... don’t let him in (Sun)

David Cameron has plenty of room for manoeuvre, says Trevor Kavanagh. But he cannot count on the unpopularity of Ed Miliband to hand him victory.

9. Justice is put to the sword by Moscow’s greed and corruption (Daily Telegraph)

The ludicrous 'trial’ of a whistleblower killed for his pains ranks among Russia’s darkest hours, writes Boris Johnson.

10. Liberal Democrats: heartlands (Guardian)

Nick Clegg still feels the sacrifices are worth it, but this is becoming an increasingly difficult line to sustain, says a Guardian editorial.

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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.