When the big names screw up we all foot the bill

By Neil Patrick

When ordinary people lose their jobs, it’s usually not their fault. When the great and the good lose theirs, it nearly always is and it costs the rest of us a small fortune.

Usually, this blog is about the world of work experienced by normal people. But this week has seen some astonishing events unfold in the UK, involving some of the most senior, highly paid and high-profile people in the land. It’s been like watching three train wrecks at the same time. If they were just fools wrecking their own careers, it would simply be amusing. But it’s not. These people’s actions are destroying the lives of others who are entirely without blame. And costing us all a fortune in the process…

The prize for this week’s biggest contribution to job destruction in the UK must go to Dominic Chappell (he insists this is pronounced ‘Shap-elle’) boss of Retail Acquisitions, the latest owner of BHS. Formerly a stalwart of the UK high street, British Home Stores (presumably pronounced ‘Breeteesh Ohm Store’) has been struggling for years to reinvent its business to function in the digital age. On 25 April 2016, BHS was put into administration.

Chappell’s outfit bought BHS from Philip Green for just £1 in 2015. During his 15 year ownership, Green’s family took an alleged £586m in dividends, rental payments and interest on loans. At the same time, the BHS pension fund went from a surplus to a deficit of £571m. Green has now been summoned to account for this in front of a cross-party parliamentary panel of MPs.

Monaco-resident and retail supremo Green has lost some of his lustre lately as the efficiency of his tax avoidance tactics have come under media and government scrutiny. It’s a tough call to decide whether Chappell or Green is the greater enemy of the Treasury and taxpayer.

Chappell meanwhile has incurred the ridicule of many in the business community by lodging a bid to buy back the business he bought for £1 in 2014. During his period of ‘leadership’, he successfully put BHS into administration, and then sought to offload its pension deficits to the Pension Protection Fund. Himself twice bankrupt and a former racing driver, a BHS spokesperson said of Chappell, ‘…he’s living in cloud cuckoo land’. Whilst he may no longer be the owner of BHS, unless he’s spent it already, he’s got a sizeable war chest filled with ‘professional fees’ of over £25m that he and his mates have charged to BHS during their 13 month period of control.

So at this point, BHS has £571 million in unfunded pension liabilities and 11,000 jobs are now seriously under threat. If BHS collapses, the losses for its creditors (and that’s almost everyone in the UK thanks to pension fund investments) will be around £1.3bn.

Next on this week’s wall of shame is the now former Chief Constable of South Yorkshire, David Crompton, who was told to pack his bags after the final verdicts of the inquest jury at the about the culpability of the South Yorkshire Police for the Hillsborough disaster in April 1989 in which 96 football fans were crushed to death. The jury found the police to have been guilty of unlawful killing in what the Labour Party called ‘the greatest miscarriage of justice of our times.’ Further legal actions against Crompton and other senior police chiefs are being pursued after the enquiry uncovered a deliberate attempt by South Yorkshire Police to cover up the evidence of their failures. Costs to date of the 18 year legal investigations are estimated at over £14m by the BBC.

Last but hardly least, Ken Livingstone, former Lord Mayor of London and one of the most high profile members of the Labour Party was suspended from the Party pending investigation after he tried to defend Labour MP Naz Shah’s idiotic social media post from two years ago when she posted on Facebook the statement, “problem solved” showing a map of Israel imposed on the USA.

Livingstone amazed everyone, not least others in his party, by attempting to defend Shah’s actions by claiming that it was not anti-Semitic, merely anti-Zionist (that’s OK then?). He may be technically correct, but that matters not. Such a distinction is lost on most of the public and in any case anti-Zionism is often a symptom of an anti-Semitic mindset.

Whilst completely unconnected, these three events reveal the circumstances in which the great and ‘good’, routinely commit career suicide through their ill-judged actions. But I don’t care about their careers. What I care about is that their actions inflict untold collateral damage on the lives and wealth of thousands of innocent people who haven't screwed things up. And that the rest of us have to pay for their incompetence.

Over 11,000 jobs are likely to be lost at BHS unless a buyer is found swiftly. Even if this is achieved, largescale restructuring and redundancies seem inevitable. The cost to the UK of this failure will be £1.3bn and directly or indirectly, we will all carry our share of this cost. And that’s before we add in the benefits cost of all those employees who will struggle to find new jobs.

The South Yorkshire Police are almost obliged to implement a complete change of leadership. Plus they will continue to run up huge legal bills in the coming years as subsequent legal actions against them are defended. Given what the costs to date of this shameful episode have been, it seems likely that this will inevitably run into millions.

Shah and Livingstone’s stupidities might not cost us much from our pockets, but it has distracted Jeremy Corbyn’s Labour Party from concentrating on being an effective opposition, whilst the Party squabbles and argues within its own leadership. So no bill to pay, but a minor catastrophe nonetheless. With the Labour Party in disarray, we have a government which will be rubbing its hands with glee whilst the essential counter balance of the opposition is focussed on its internal bickerings instead of doing its job.

There is much debate about CEO’s salaries and compensation, but CEO’s are not the only ones getting away with daylight robbery. Our senior public servants are too.

Each of these three cases can be traced back to bad decisions made by people who ought to know better. People who are in positions of trust. And people who have been massively financially rewarded for their failure. Sound familiar? Yet none of them are CEOs…

If a normal employee committed any of these acts, they would be in the dole queue in the blink of an eye. But no normal person who screws up and loses their job as a result, can match the costs to society of these examples of comical cock-ups, gutless greed and shameless self-interest.

It really does seem that power just doesn’t just corrupt, it turns people into idiots.