Plug Arcadia pensions gap with your own cash, Sir Philip told

The Times - 24 May 2019

Frank Field has let fly a new tirade against Sir Philip Green, the embattled retail boss he doggedly pursued over the collapse of BHS, to demand that he puts up his personal fortune to guarantee the pensions of Arcadia staff.

In a letter to Sir Philip this week Mr Field asked him to pledge that he would personally plug a deficit in Arcadia’s pension fund if a proposed reduction programme did not protect its workers.

It comes just over two years after Sir Philip was forced to commit £363 million to the retirement pots of thousands of former staff of the department store chain BHS, which collapsed shortly after it was sold by the tycoon for £1. The pensions row triggered a reputation crisis for Sir Philip and led to calls from MPs for him to be stripped of his knighthood.

“I write at what I know must be an enormously difficult time for Arcadia staff,” Mr Field wrote this week.

“The pension schemes’ deficit remains worryingly high.” He told Sir Philip that he was giving him an opportunity to make a public commitment to protect workers. Mr Field also sought guarantees that the Topshop founder would not put the Arcadia pension scheme into a so-called “superfund”, an investment vehicle set up by City investors, the use of which has been criticised for presenting greater risks for pensioners than traditional schemes.

Sir Philip and his wife, Lady Green, offered this week to put £100 million into Arcadia’s pension scheme in an attempt to win backing from regulators for a radical restructuring of their retail empire. The Pensions Regulator rejected the offer, saying that it did not adequately protect the group’s 9,500 pension scheme members.

Arcadia wants to halve the £50 million sum it pays into its two legacy pension schemes, which have a deficit of about £750 million, as part of its restructuring.

“I welcome reports that you and Lady Green are making personal contributions to mitigate the reduction but the Pensions Regulator have said this is not sufficient to ensure adequate protection for scheme members,” Mr Field said. “Might I please ask you to offer a guarantee to Arcadia staff that you would do the same for them [as for BHS workers] and this time, without the need for the regulator or parliament to step in first?”

Arcadia’s restructuring plans come after weeks of fraught negotiations with landlords and the pensions watchdog to prevent the business, which owns the Topshop, Dorothy Perkins and Miss Selfridge brands, from falling into administration.

Sir Philip, whose family’s fortune halved last year to £950 million amid difficulties at Arcadia, has asked landlords to agree to a company voluntary arrangement in which 23 of his 566 shops in the UK will close and rents will be slashed at a further 194. The closures put 530 jobs at risk.

It follows a problematic year for Sir Philip, who has been accused of inappropriate behaviour, harassment and racist comments towards some Arcadia employees and of using non-disclosure agreements and large payments to prevent allegations being made public. Sir Philip has denied “unlawful sexist and racist behaviour”.

Mr Field and Sir Philip clashed repeatedly after BHS went bust in 2016. The MP, who is chairman of the work and pensions committee, investigated the collapse and the hole in its pension fund.

Arcadia did not immediately respond to a request for comment.

Tabby Kinder, The Times