With Emily Maitliss. Sir Phillip Green and the sale of BHS, the way Facebook chooses trending stories and has London become too separate from the rest of the UK?
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From high-street hero to retail tragedy -
what really happened at British Home Stores?
Did Sir Philip Green act responsibly when
You get really egregious cases, which I suspect this is one,
then it brings to light how casually the duties of directors
Facebook agrees to look into charges of political bias.
Did it remove right-wing stories from its trending list?
And should we worry that we are increasingly getting news
And on Artsnight, Tate director Nicholas Serota dares to ask -
just how important is contemporary art?
We stand here, on the point of opening the new Tate Modern,
the extended Tate Modern, with many people still doubting that
Just how did the tycoon dubbed the King of the High Street
become the "unacceptable face of capitalism".
Philip Green, the man behind many key fashion brands,
was lauded and loved - knighted indeed.
That was before he sold British Home Stores a year ago for ?1.
Last month, the retail chain went into administration,
and is likely to be sold again in coming days.
Crucially, the move left a ?571 millon hole in its pension fund.
The blame has been laid squarely at Philip Green's door.
Well, Newsnight has been trying to untangle what happened
with the business - and how much blame, if any,
Nothing scroomed British style more than British Home Stores, it became
a thriving chain of 160 odd shops nationwide.
That was then, now BHS is in administration, led by a man who has
been bankrupt three times, and lumbered with a hole in its pension
pot that seems to be ?571 million wide. And the fall out from this
could be immense. One of the BHS known retailers in this country, a
Knight of the Realm has been accused of recklessly selling BHS, even
though it has helped to make him a multiple billionaire, overnight a
man feted as one of our greatest entrepreneurs has been regarded as a
pariah. When you get egregious case, I suspect this is one, it brings to
light how casually the duties of directors are being taken by some
people, and I think we therefore need to remind people who work in
business, who have directored duty, that they do include more than
simply making money in the short run.
Sir Philip Green makes an almost pant mile villain, the ?100 million
superyacht, the models, the massive dividend, the tax haven. Feted by
some in the establishment, seen as vulgar in the eyes of others, but
how much is Sir Philip Green really to blame for all this? Newsnight has
heard the views from all sides in what everybody agrees is a sorry
tale. So what really happened to BHS?
Great value, good quality. It had all looked so hopeful. Money in one
side, money out the other. Friends have told us Sir Philip Green thinks
he should have sold it is a decade ago.
When he did sell in 2015, it went for just a pound. But the buyer
wasn't anyone you have heard of. It was a very little known businessman
called Dominic Chappell. A man with no retail experience at all, but a
very colourful past. So, who is he? Since his take over of BHS, it has
merged that Dominic Chappell has been made bankrupt three times,
although he insists that one of those bankruptcies is going to be
annulled. Newsnight has discovered that 15 years ago he was charged
with theft, and the handling of stolen goods in relation to the
disappearance of a 47,00 pounds sports car. When we spoke to him
about this, he invisited that the case had been thrown out, and that
he was innocent. -- insisted. But what about those bankruptcies?
Anyone wants to know about Dominic Chappell has to come here, to the
Isle of Wight. We have just come off the hovercraft. He used to make this
journey in his helicopter. This is island harbour, a unique and
historical area, a true jewel in the Crown for the Isle of Wight. Not my
words but those of this man. This is Dominic Chappell, the chief
executive of island harbour holdings. At least he was. Until his
development here went bust, seven years ago, owing more than ?20
million. Much of it to local businesses, who were and still are
absolutely furious, including the company that printed this brochure.
How many did you make of these? From memory about 5,000. Tim lost out on
nearly ?13,000. In this particular project we have to pay our paper
suppliers who gave us the paper, ink suppliers, our people that did the
Varnishing, we had to pay them as well. So a considerable amount of
money other than staff that is paid out by a company, and this type of
work happens. Would you say it was reckless the
behaviour? Yes. Damaging and reckless? It damaged me to the tune
of ?13,000. Hamilton's Fine Foods lost a similar amount If BHS phoned
you and say we are thinking of selling up to this man, what would
you have said? I would have been speechless they even accepted the
approach. I would have say there is to way you can do this Mr Green.
Well, there is a lot of prominent businessmen and women who have been
through bankruptcies and administration so there is nothing
wrong with selling a company to someone with a chequered financial
past but this feels a bit different. BHS, such a prominent name on the
high street but responsible for a lot of people's livelihoods and
pension, so the questions that arrive now are is who was checking
the credentialles of Dominic Chappell, and were enough questions
asked at the right time. Right at the top of that list, who was
vouching for Dominic Chappell? Sir Philip Green's lawyers ling laters
told us they got reassurances from MrChappell's lawyers Olswang.
That pels lawyers told us: -- Dominic Chappell.
What is clear, is that everybody involved in the sale of BHS knew
about Dominic Chappell 's bankruptcies but nobody thought they
were a deal breaker. So a very rich Mansells his shops to
another man, who has no retail experience. On paper that looks odd.
Is there anything legally wrong with what happened? If you want to sell
the asset and you own this company, you are entitled to dispose of it as
you wish, and you don't have to ensure that the person purchasing
the asset can comply with his or her own obligations to the company, that
is after the event. You are entitled to dispose of your shares as you
wish. The single most controversial part of the collapse was the hole in
the staff pension scheme, valued at of ?570 million. Controversial
because those pensions are being paid out of a rescue fund, that
millions of workers have paid into. And not by Sir Philip Green, by
Dominic Chappell, or by anyone else who has made money out of BHS.
What has never before been revealed, is that two years ago, Sir Philip
Green planned a massive restructuring of BHS called Project
Thaw. One of the main things it would have achieved was putting more
money into the pension fund including 80 million from Sir Philip
Green himself. It needed approval and that is something the regulator
wasn't prepared to give. At months of discussion the global economy had
changed and project thaw was shelved. Could the regulator have
saved the scheme? On Monday the boss suggest it had kept in the dark
about plans to sell to Dominic Chappell 's group. They discussed
propositions with us and the next we heard that there was a specific
development, was the sale. Not so says the man who oversees the BHS
pension fund. My recollection is clear, that all of the key
stakeholders were involved in that sale process and we were all
involved in regular dialogue and discussions Once it learned of the
sale the pension regulator launched an immediate inquiry known as an
anti-avoidance case, I spoke to Dominic Chappell at lent today and
he said that inquiry had a huge impact on his ability to borrow
money from banks at a competitive rate. He said the inquiry was, in
his opinion, one of the main reasons that BHS had gone into
administration. But others say there was one very
simple option available to Sir Philip Green, but he failed to take
it. It. John Ralph has been asked to provide specialist briefing on
pensions to their inquiry If you are thinking about selling, and that
could you know, that could increase the risk of the pension scheme,
there is a very straightforward mechanism you can use, it is called
preclearance, you go to the regulator you fill in a form, it is
on the website, it is straightforward. You explain what
the facts you are doing are, you explain the impact on pension scheme
and what you are doing to mitigate that impact. That might involve
putting in an amount of money, you then can get a sign off from the
regulator, that they will not pursue you, and I think I would like to ask
however strong your legal advice was, what was the commercial reason
for not taking a bit of time and effort and trouble, and getting that
preclearance. There are senior executives within
BHS who believe the brand can be saved, but even if it is, the
pension scheme won't be. That lifeboat fund will now prop it up.
That raises bigger questions, some see this as an corporate equivalent
of a get out of jail free card. Let us be clear, setting up the
Pension Protection Fund was a progressive step forward, because it
was wrong that if somebody lost their job in a company failure they
should lose their pension. It is right to underwrite pensions in
those situations but clearly it is open to abuse, by employers, taking
money out of a company and then dumping responsibility on the
taxpayer. There is every chance Sir Philip Green hasn't broken any rules
at all to do with the sale of BHS, he stuck to the letter of the law,
that he followed advisers' recommendation but there is a chance
he will still have to write a big fat cheque to the pension fund? Why?
Because his reputation really is at stake here. This whole complex story
is about more than who is legally or technically right, it is about
perceptions of fairness, about what we as a society think of as fair.
At the marine that it was a new develop ever who pecked up the
recommend napts of the failed venture, with BHS, it is now down to
the Pension Protection Fund to help pensioners and the administrator to
try to sell the company. He is analysing five or six separated by,
one of which involves Dominic Chappell.
Joining me now, the Labour MP Frank Field, who chairs the Work
He has suggested Philip Green should hand back his knighthood
if he doesn't cough up the money to cover the pensions scheme.
Thank you for coming in. Let me ask you to help us unpack this, first,
did you know that Sir Philip Green tried to plough back the profits,
from BHS into the pensions fund, and that he was stopped from doing that?
No. But quite a lot is emerging, and one of the roles of both business
Select Committee and Work and Pensions Select Committee, coming
together, is be able do a number of audits, so those audits, we hope
will be tested but published by Parliament. There is some obvious
questions that we need answering, first of all when was as Adam was
suggesting there, when were the profits generated? And was it by
book-keeping or by other arrangements? Real improvements in
the firm? And to whom did they go? Let me go back on this one, if it
turns out that he did in fact try and plough those profits back, from
BHS, into the pensions fund, including that 80 million of his own
money and he was stopped by the regulator, would that concern you
and if so, where would you be looking now? Well, we are looking in
lots of places, Would you question the regulator? Is the pensions
regulator in your perview. We have questioned the regulator
without knowing this and immediately companies on behalf of Sir Philip
Green came back to disputing many of the key thing she said and again
another audit which we will be doing to publish is, was this a failure of
the existing law, or is the law adequate, but people trusted with
enforcing it did not match up to the job? Are you clear what Philip Green
has done wrong? No, that is the point of our inquiry. Do you think
he has done anything illegal? We are not starting from a basis of
anything illegal. Do you think he has been a moral? I am answering the
first question. That side of whether nor has been broken is being looked
at by the Serious Fraud Office. We have been in contact with them. I do
not want to do anything that would allow inadvertently somebody to
shout they cannot get a fair trial. Why would you say so clearly that
Philip Green has a moral duty to make good the pension scheme, or I
would personally recommend he should lose his knighthood? Why would you
go back far if you do not know he has done anything wrong? He was in
charge of the stewardship over a period where considerable dividends
were paid. We want to look at to whom they went and also he was
Stuart ineffective the pension fund. You know now he may have tried to
put into that fund and been stopped. Why would you come out with a phrase
that sounds like you are prejudging him? When you asked me on here you
said you would mention this and we would pass on because there are
important issues I would like to discuss. Let me have another go at
answering. I think there is one in moral case. Those who are developing
unacceptable face of capitalism. If you are a Steward, take the rewards
and then walk away and find there is a mega some of money, that people
will not get in full. Did he do bronchi think by selling it to Vista
Chappel? He has not sold it to Dominic Chappell. I'm sorry, he did
for ?1. Mr Chappell is up for buying it again. He is a businessman who is
trying to make good. What was the thing that you think he actually did
wrong that would lead you to say maybe we should rescind his
knighthood? You do not have to rely on your lawyers whatever they are
paid and that is part of the business inquiry. Who does advise
for these deals and what are they paid, what do they take out of it?
We have to go on the internet and find the man is three times
bankrupt. To think he is a serious player with no retail experience, to
whom you entrust the livelihood of a large workforce, the destiny of the
foregone wages and salaries in the pension scheme, I would have
thought, if the BBC was run like that, do you think it would have
such an easy run from the government this week? Frank field, thank you
very much. To those that live there,
and those that don't, London often feels like a different
country to the rest of the UK. Londoners seem to dress
differently, live differently, think differently and -
increasingly - vote differently. Polling suggests Londoners are more
for the EU then the rest of the country.
But what does that mean for the future of the capital?
And more importantly, you'll no doubt be shouting at
David Grossman offers us his thoughts.
London has always been a bit different.
It's not just its scale that makes it unique, but demography too.
It's younger, better qualified and richer.
Londoners are more likely to rent, more likely to live
in a flat, and more likely to use public transport.
And London politics has diverged from the UK as well.
My name is Sadiq Khan, and I'm the Mayor of London.
Sadiq Khan's victory in London was as emphatic as it was welcome
It's been building since the late '90s.
1997 was the first general election when Labour pulled substantially
ahead of their national average voting figures -
at least in London, compared with the rest of the country.
It has continued since then, and in 2015, further ahead again.
Now, whether this is because of changing Labour politics in the '90s
and 2000s, the late '90s and 2000s under Tony Blair,
or a change in the make-up of the London population -
to be honest, nobody really knows, but the effect is obvious.
It's not that the Conservatives are doing worse, it's that Labour
is doing better at the expense of lots of smaller parties.
One reason is that London has expanded well beyond its formal
Early morning commuters crowd on to packed trains.
As London has grown, many of the Conservative-voting
middle classes have moved to the surrounding counties,
driven by the search for affordable housing.
The people who used to vote Conservative in places
like Greenwich and Lewisham, they haven't stopped
voting Conservative, they just don't live
They are now voting Conservative out in Essex and Kent.
In place of the middle classes have come migrants, from all
Nearly 40% of Londoners were born overseas.
It is totally different from anywhere else in the UK.
No other region has anything like it, and that does make it look
It has links to all sorts of parts of the world, not only personal
links, but business links, and it simply and inevitably means
that the way people think in London is always going to be a little
different from middle England or middle Britain.
We can see that difference in polling.
In the UK as a whole, 60% put immigration and asylum
in their top three issues facing the country.
Housing is the most important issue, on 44%.
But housing only rates 20% in the UK as a whole.
Not only that, but when Londoners say they are concerned about asylum
and immigration, they can mean something very different.
Because an awful lot of people in London,
immigration is important because they have come here to live,
and they want to have the freedom to work and to live in London.
If they are from elsewhere in the world they may
want to have the right to bring their extended family
here and come and live here, London works very different,
immigration works differently in London because a lot
And this different view of course feeds into the debate
In the UK as a whole, one recent poll found
that the Remain side was just two points ahead of the Leave side,
whereas in London the Remain side was ahead by 12 points.
It may be that Labour's dominance over the capital is shortlived.
As the new luxury investment apartments go up, poorer Londoners
may follow the struggling Conservative-voting middle classes
The Boris boom created this sort of Dubai on Thames landscape we can
If we see the sort of policies we have in London at
the moment continuing, where you have on the one hand,
up to 100 council estates are up for demolition, and on the other
hand, you have 300 towers being built of predominantly luxury
apartments all over the city, you have that twin track process.
If that continues, what we are going to see is this
hollowing out of the city, where it really is going to become
a very, very different sort of environment,
and in five to ten years' time you will have a very
different population, and a very different demographic.
Part of London's abrasive charm is it doesn't seem to care
It is always been slightly detached from the UK as a whole,
but there is perhaps a danger this remoteness turns into isolation -
Mark Zuckerberg has today announced plans to invite
from across the political spectrum to discuss accusations
The Facebook founder and CEO has always denied allegations that
Facebook routinely suppressed news stories of interest to conservative
readers and that the company would artificially inject stories
into what appeared to be user-generated trending topics.
Launched in 2014, the topics appear for the right of the news feed
The question is, has Facebook deceived its users by chosing
And crucially, have they played to a left-leaning
audience's preference for news in their choice of story?
the head of social and trending content for the Independent.
And Louise Mensch, the editor of Heat Street, who is in New York.
Gina Rik Mayall, many people I think would be surprised to know Facebook
is in the news game and it is such a big player. I would not say it was
in the news game traditionally, in the way you and I understand it, but
what people need to realise is that many people get their news via
Facebook and that would be the Facebook news feed rather than what
is generated in trending topics that only appear on desktops. Most people
who use Facebook do it on mobile. Louise, do they have that much
influence, does it make such a difference? Of course it makes an
enormous difference. Facebook brings the world together and brings the
world it's news. I think we have seen Facebook admit and Mark
Zuckerberg admit that they have been suppressing conservative news. They
issued a statement from a PR firm, a non-denial denial, saying we allow
Facebook trending topics that are well supported. The question is,
what is well supported? . We had a list yesterday. One right wing news
source which was Fox News, the others were left wing including the
Guardian, the BBC and New York Times. To be fair, Facebook says it
monitors thousands of websites per week. There were right wing
publications. It is not saying it feels it is left-leaning, it is
saying it will invite Conservatives. It acknowledges it has relied for
what is good enough to support a trending topic. If you are not
supported by these sources, including the BBC, Guardian and New
York Times, your trending topic is not good enough. I think you are
being deliberately disingenuous. You are running a right wing leaning
website and it looks good for you to say you are suppressed. I have not
seen evidence of right or left-wing contents doing better or worse
online. These are trending topics. Not news publications. The basic
technological... We are not discovering which news publications
are suppressed by Facebook and my publication only launched in the
last couple of weeks. They are talking about trending topics, not
news publications. Can we step back from this? Right wing sites, if they
are suppressed, why are they successful on Facebook? The question
is trending topics, not news sites. It is amazing you have a basic lack
of knowledge on the issue at hand, it is topics, not news sites. Is it
the political bias allegations that concern you all the idea that anyone
is editing what we think of as a trending topic? Does that worry you?
You have to have an element of human duration otherwise it would be easy
for Isis to make a trending topic out of an execution video. The
sources on which they rely are far too left wing. And that is why, and
to give Mark Zuckerberg credit, he is willing to meet with conservative
leaders and changes ways, which has to be a good thing. Did you hear
that as an admission, that they think they have been biased? No. In
the same statement he said he did not think the allegations were true.
When you look at where they came from coming they came from one
contract working with Facebook. They said that certain sites were not
trusted. Like the one we mentioned before. What do you define as a
right wing topic? Let's take all lives matter. They would promote
black lives matter and the socially conservative response all lives
matter would be suppressed. You think that is wrong? Yes, as long as
something is not completely it... It is not child abuse, something like
that, you have to treat topics equally. Your guest is confused.
Should they treat all lives matter, a rival campaign setup in the wake
of black lives matter, equally? I have no evidence Facebook have been
treating all lives matter, black lives matter, unequally. When I look
at the trending topics and what is there, I do not have a look and
think, there is something that is not there or artificially. We have
run out of time. I am sorry we have to end it there but thanks to both.
I'll be back on BBC Two with This Week's World,
Next on Artsnight, in a crisis-ridden world,
with our national economy on the ropes, Tate director
Nicholas Serota dares to ask, does contemporary art really matter?
He visits Los Angeles and Middlesbrough, and talks
to the Chancellor of the Exchequer, George Osborne.