‘Bad bosses’ face jail under new protection plans
BY ANDREW WHITAKER
EMPLOYERS found guilty of abusing and exploiting their staff face jail under Labour plans aimed at protecting workers like those affected by the collapse of high street retailer BHS. Shadow chancellor John McDonnell, pictured, told the Sunday Herald that “firm new laws are now needed” in the wake of the treatment of the workforce at the chain.
McDonnell said the BHS case, where up to 11,000 jobs could be lost, showed there was a need for “criminal sanctions” to deal with rogue employers who have been convicted of what would be a “corporate irresponsibility” offence under Labour’s plans, where it has been proved that a firm’s employers were treated callously and recklessly.
The dramatic intervention came after Labour MP Frank Field, the chairman of the Commons Work and Pensions Committee into the demise of BHS, called on the Serious Fraud Office to launch a formal inquiry into the actions of the department store chain’s former owners. He wants to know whether tycoons Sir Philip Green or Dominic Chappell – who bought the store chain from Green for £1 – had broken the law. BHS went into administration in April, 13 months after Green sold it to former bankrupt Chappell.
A joint report published by Field’s committee and the Business, Innovation and Skills Select Committee concluded that Green had “systematically extracted hundreds of millions of pounds from BHS”. The retirement savings of 22,000 current and former workers have also been hit as the firm’s pension fund was left with a deficit of £571 million.
MPs found that Chappell’s Retail Acquisitions failed a number of tests set by Green’s retail business to determine his credibility. Nonetheless, Green arranged £25m in finan- cial assistance for the company to help smooth through the deal. He also helped Retail Acquisitions with a £10m contribution linked to a property deal, according to the parliamentary report. MPs concluded Green “was both sides of the deal”.
In his letter to the SFO’s director, David Green, MP Field wrote that “in the light of the extraordinary evidence” received by both committees, the investigatory body should examine whether money was “moved in such a way as to attempt to mislead people into believing Mr Chappell was a credible buyer for BHS”. McDonnnell, who is Jeremy Corbyn’s closest ally and is running his leadership campaign, said that the party in Government would legislate to prevent what he said was the danger of the UK slipping “back into the Victorian era” over the treatment of workers.
He said the next Labour government would change the law to allow the criminal prosecution of firms that have sought to “exploit their employees with impunity”. McDonnnell added: “We cannot allow our country to slip back into the Victorian era when employers could exploit their employees with impunity.”
Labour MSP Neil Findlay, welcoming the move, said: “Time and again we see the unacceptable face of capitalism rear its ugly head playing corporate games with the jobs of thousands of workers.
“Philip Green joins a rogues’ gallery alongside Fred Goodwin of RBS, Jon Moulton of City Link, and the directors of Farepak and Equitable Life as some of the worst examples of corporate irresponsibility. We should be doing all we can to promote good businesses which value their customers and employees but have very robust sanctions for those who don’t.”
The SFO has previously confirmed receipt of material relating to BHS which it is reviewing. It has not yet decided whether to launch a formal investigation.