Due Diligence, Deluded Ignorance or Damned Incompetence?

There was a wise old teacher who enjoyed his work even though his classroom was small and dark. OK – It was a long time ago, there was no Ofsted and this is my story! One hot Summer day he decided that he needed a change so he came up with a plan to take his class outdoors. He suggested to his students that he was prepared to conduct the lesson in the shade of the old oak tree on the edge of the school playing fields. He reasoned that the fresh air and change of scenery would help them to concentrate. As an added incentive he was prepared to buy them each an ice-cream but this offer could only take place if they all agreed to the plan. A casual inspection of the damp patches on many of my classmates shirts and their languid expressions I felt sure that the suggestion would receive a good reception. Even the class bully had given up flicking rubber bands at people’s ears as he too wilted in the heat.

To your average hormonally challenged teenager this proposal would be a no brainer but as I said this was a long time ago. Half the class immediately grabbed their books and headed for the door while others whooped in joy. Even those that had fallen asleep were stirred to investigate the commotion. We all ignored the one person who remained at his desk, stoney faced, with his arms folded. As the noise abated he announced to the world that ‘he did not like ice-cream’. In most schools with classes of around 25 you will usually find 1 or 2 pupils who will object to most things for no other reason than to draw attention to themselves. Invariably these pupils are soon tagged by their classmates and subjected to a mixture of scorn, contempt and indifference appropriate to their action. But this student was not one of the usual ‘troublemakers’ leaving the teacher with little option but to withdraw his offer and send a couple of us to retrieve the group that were already half way to the playing field. Despite the fact that there were quite a few of us who would have willingly eaten the spare ice-cream, we dutifully spent the rest of the afternoon cooped up in our stuffy classroom listening to the wonders of ancient Mesopotamia on account of one individual’s obstinacy.

For the past decade every month the MEPs tasked with running the European Community up sticks from their Brussels HQ to attend a 4 day session at their secondary base in Strasbourg. The cost of moving the 1000 MEPs plus equipment, translators, security teams, etc leaves the European taxpayers with a bill estimated to be around £130m per year. The cost of building the second parliamentary building in 1999 was £50m and there are 100 full time staff employed to maintain it for the 12 monthly visits. None of the MEPs see the need to decamp once a month and in a climate of economic austerity all are agreed that this is an unnecessary expense and would like to see it scrapped – except for the French, who have the power of veto on this subject. This is not surprising given the financial boost and prestige that it brings to the region whenever this circus comes to town.

Once again the wishes of the majority are scuppered by a lone objector.

Part of the success and/or failure of the EU is tied into its desire to appease everybody. Think how often a family sits in front of the TV unable to agree on what to watch that evening; compare that to a situation where representatives from 28 countries try to reach an agreement on a single course of action. In my head I see 2 conflicting images, ‘He that pays the piper calls the tune’ and ‘giving turkeys a chance to vote on the future of Christmas’. My head is full of conflicting images, but I am used to it and life goes on no matter my state of confusion.

This is not an article on the European Referendum, for which neither the Remain or Brexit campaigners have put forward a sufficiently good argument for their cause. I think most people will be aware of the key arguments on the debate by now but I’m not sure that anyone could explain the strategies that either camp would adopt were they to win the vote.

In the spirit of fairness I would point to another story that caught my attention this week which demonstrates the UK’s capabilities as a technological and economic power house. Only the British could build an international airport on an exposed hilltop. The new airport on the British dependency of St. Helena in the South Atlantic has taken 4 years to build at a cost of £285m to the taxpayer. Only upon testing the runway was it learned that the crosswinds have posed such a significant problem that it has been deemed unsafe and the opening that was due to take place in May has now been delayed indefinitely. Footage of a British Airways 737 attempting to land showed it lurching from side to side and the wings flapping like a drunken goose. My suspicion is that the preliminary testing was carried out at the same wind tunnel laboratory where the labrats demonstrated the inability of safety glass on high speed trains to survive the impact in collision with a frozen chicken.

At least the choice between Hillary Clinton and Donald Trump is out of our control. Unedifying as each of them is we Brits can do little but sit back and await the outcome of the US elections in November.

June is usually such a genteel month; the sound of leather upon willow, the trooping of the colour, the smell of the barbecue as thoughts turn towards holidays. This year seems to be particularly busy for all sorts of reasons.

I must admit that the build up to the European Football Championship has been far more entertaining than the political posturing on either side of the pond. This is not simply because for once we have a strong representation by the home countries but it is rarely that I have felt that the English have had a squad with such potential – not being given to bouts of over-enthusiasm it could be ‘the Leicester effect’ or maybe I have OD’d on my hayfever medication.

This weekend sees the climax (or yet another climax) to the Queen’s 90^th birthday celebrations as well as the funeral of Mohamed Ali. Thankfully both stories have managed to force the political rhetoric off the front pages, if only for a few hours. Arguably they are 2 of the most recognised icons of the 20^th century and it is right that we should honour their contributions and achievements. As role models go you can only admire the dignity with which they have lived their lives.

In the background there is also the build up to Wimbledon as well as the Olympic Games in Rio starting in August. The England have already demonstrated their usual inconsistency, doubtless the footballers will follow suit and Andy Murray will put us all through the mental wringer as he frequently has.

With so much going on it would be easy to overlook a story that personally I find quite alarming and significant. One that I feel will run for some time to come – that is the fall out from British Home Stores.

The department store has been a staple of the British High Street since 1928 but has been in decline for many years. Sadly, the company could not live up to their slogan of ‘Modern living, made easy’ and in April they were placed into administration with debts of £1.3bn, which included a £571m pension fund liability and puts 11,000 jobs at risk. With no buyer in sight it will almost certainly mean that the remaining stores will disappear within weeks.

What has emerged since the announcement for liquidation has been the turmoil over the past couple of years that has brought down this company.

Like many department stores their fortunes had fluctuated over the decades but since the start of this century their path had been plotted by serial entrepreneur and City darling, Philip Green. Having bought the company for £200m in May 2000 the then owners sold it in March 2015 to Retail Acquisitions for a nominal value of £1, shortly after which it was announced that 51 of the 171 stores were at risk of closure.

It is only this week that a parliamentary committee has been able to ask some of the questions that seem to have escaped anyone’s attention during this period. Ultimately, responsibility for filling the pension blackhole will fall on the taxpayer, which perhaps explains the government’s belated interest.

What has emerged this week is that Dominic Chappell, the owner of Retail Acquisitions is a former racing driver and entrepreneur who has been declared bankrupt on 3 occasions and had very little experience of the retail sector.

BHS chief executive, Darren Topp, described Dominic Chappell to the parliamentary committee as a "premier league liar" and "Sunday pub-league retailer" who had his "fingers in the till". He went on to explain to MPs that when he objected to a £1.5 million transfer to a company owned by a friend and fellow board member of Dominic Chappell, Mr Chappell threatened to kill him if he made the information public.

Mr. Chappell was quick to point the finger at Philip Green for the failure of the company and Mr. Green is scheduled to give evidence to the committee on Wednesday.

Philip Green’s financial dealings could hardly be described as transparent given that his Arcadia group, the former parent owner of BHS, is owned by Taveta Investments, the company owned by his wife, Lady Tina Green.

Into the mix we can also add yet another billionaire pantomime villain, Mike Ashley, whose efforts to rescue the company amounted to nothing. Just days before, he had agreed to attend the same parliamentary committee to answer concerns about some of the working practices at his own firm, Sports Direct.

It has not been a good week for British business, especially when Brexit have been banging the drum for British industry.

Following the exploits of Robert Maxwell in the 1980s pension rules were changed to ring fence pension funds giving them more protection.

Asset stripping has always been a tawdry part of business life, I am not sure whether the BHS débâcle constitutes pantomime, farce or has the makings of a suspense movie. There should be serious questions about the role of the pensions regulator in this case as well as the need to review a business system that allows someone with a poor track record to take control of a company and devastate so many people’s lives.