Morning Call: pick of the papers

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

1. Miliband the illusionist must conjure up more with less (Daily Telegraph)

The Labour Party must convince the voters that saving money can produce social dividends, says Mary Riddell.

2. It's time the Tories learned to love the unions (Guardian)

Nostalgia for a tussle with the unions still excites some, writes David Skelton. But modern Conservatives need to befriend, not alienate them.

3. Austerity loses an article of faith (Financial Times)

The UK industrial revolution shows the Reinhart-Rogoff thesis on debt is not always right, says Martin Wolf.

4. Even if he loses, Alex Salmond will still win (Times)

Whichever way Scotland votes on independence, the First Minister will wrest more power away from Westminster, writes Alice Thomson. 

5. Shaker Aamer and the dirty secrets of the war on terror (Guardian)

The scandal of Britain's last Guantánamo inmate encapsulates the barbarity of a mutating conflict without end, says Seumas Milne.

6. Sovereign Scots may have to drop sterling (Financial Times)

Edinburgh should try to secure monetary union with England, but it would probably fail, argues John Kay.

7. France's meltdown is a stark warning to anyone who wants Red Ed as PM (Daily Mail)

Labour is promising precisely the same policies as Hollande’s socialists, writes Daniel Hannan.

8. If Abenomics works, Britain's leaders will look like monkeys (Guardian)

George Osborne should abandon the tribal morality of austerity and, like Japan, print money not for banks but for people, says Simon Jenkins.

9. A state-sector version of Eton is long overdue (Independent)

But it is not clear that the practicalities of the Durand scheme have been thought through, says an Independent editorial.

10. Our US protector is looking the other way (Daily Telegraph)

The free-riding nations of Europe are making a big mistake by slashing their defence budgets, argues David Blair.

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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.