Sir Philip Green must deliver on his long-standing promise to sort out the gaping hole in the BHS pension fund, the chairman of the work and pensions committee, Frank Field, said this week.
“Sir Philip told us that he was going to ‘sort’ the pension fund,” said Field. “This is welcome but he has been giving similar personal reassurances for two years, including to Dominic Chappell. We expect him to deliver this time and ensure that his former staff get the pensions they were promised.”
New documents submitted last week to the parliamentary investigation into the collapse of BHS revealed that Arcadia warned BHS pension trustees as early as 2008 that trading conditions were difficult and likely to remain so for the next couple of years.
In 2009, the company it could not sustain any increase on its £6.5m-a-year contributions for future service accrual and past service deficit reduction.
The collapse of BHS has left a £571m deficit in the retailer’s two pension schemes on a buyout basis.
Green said he was working on a rescue plan for the pension fund with representatives from Deloitte, the Pensions Regulator and the Arcadia board but did not give any further detail when he appeared before a joint select committee hearing last week.
Field and Iain Wright, chair of the business, innovation and skills committee, said he must now dig deep into his pockets to satisfy the Pensions Regulator and save his reputation.
Field said after the hearing: “We are writing a huge follow-up on the amount of questions that were not answered.”
The MPs will seek more detail on the structure of various companies, particularly those owned by Green’s wife, the profits they have made and the tax they have paid.
They will also schedule a fresh programme of witnesses for the end of June, which may include Lady Green.
Wright said the hearings raised questions about corporate governance in the Green businesses.
“What was very clear is [Sir Philip Green] is not used to being questioned, which is why I made the comment about being thin skinned,” he said. “Quite reasonable and obvious questions said with some courtesy, he took offence at. From my committee’s point of view, what does this mean for British corporate life and corporate governance?
“Did the non-executive directors really challenge him? We need to identify what are the systems we need to put in place to minimise the risk of this ever happening again,” he added.
The committees expect to publish an initial report before parliament’s summer recess next month.