British Home Stores in administration
Image: © Yui Mok / PA Wire/Press Association Images

The media has got its coverage of the BHS scandal all wrong. Here’s why

As the media follows Philip Green's Parliamentary Committee hearing today over the collapse of BHS, the voices and experiences of the 11,000 employees affected remain underrepresented, says Joe Earle

"It's all a bit raw," says a BHS employee in Oxford Street. Knighted business tycoon Philip Green is in a parliamentary hearing today to establish the extent to which he is responsible for the collapse of BHS. Let’s just step back from this story for a minute, and let the numbers soak in.

A billionaire (Philip Green) sold a company he’d bought for 200 million pounds for a single pound to a former race car driver who’s been bankrupt three times. Even if Philip Green paid £280 million into an emergency pension fund for BHS employees, that’s still only 12.5% of the value of everything he owns, minus his debts (his net worth) – so financially, he’s probably going to be fine whatever happens. And yet 11,000 people are set to lose their jobs, 20,000 will see a 10% cut to their pension savings, and £36 million of taxpayer’s money is at risk.

Eleven thousand employees. The comparison that hit home for me is this: I have 1,000 friends on Facebook. BHS closing down is equivalent to all these people (pretty much everyone I’ve ever been friends with) losing their job at the same time, multiplied by 10.

Yet in all the coverage I’ve seen, the 11,000 BHS staff are just a number in a story about opportunistic and incompetent businessmen, an added example to illustrate the extent of the damage they’ve caused. But each of those 11,000 people has their own lives, hopes and struggles, and those aren’t being heard.

What’s it like to have the story of your redundancy played out across the news? I went along to the Oxford Street BHS earlier this week with the aim of finding out.

The first lady I asked looked at me kindly and said that they’d been told they weren’t allowed to speak with the press. “It’s all still a bit raw,” she said. I asked three or four others on different floors and got the same answer.

British Home Stores in administration
© PA / PA Wire/Press Association Images

“We’re not allowed to talk to the press.” If they were angry and upset with the management of BHS then they were just as suspicious and wary about me when it became clear I was part of the press. It seemed like they didn’t trust the press to represent their perspective on the story. As if they didn’t see any point in it being out there because it wouldn’t change anything and would only risk causing them more stress if they were to get in trouble. Like a mafia film in which no one talks to the police because there's a code of silence and deep mistrust of outsiders.

The first lady I asked looked at me kindly and said that they’d been told they weren’t allowed to speak with the press. “It’s all still a bit raw,” she said.

Large numbers of people seem to feel like they have no reason to or way of contributing to debate in the media. This matters more than ever when you’re talking about economic issues that affect everybody, yet no-one seems to feel qualified to discuss. The media is one of the main forums in which public political discussion takes place. It shapes political agendas and forms public opinion. The absence of the 11,000 members of staff (apart from as a statistic) from the debate about what went wrong at BHS and what we should learn means that we’ll only get a very partial public debate and we end up with an impoverished civil society.

Take pensions. The BHS pension fund was £571 million in deficit when the company declare bankruptcy. When a company files for insolvency, the staff are only entitled to receive 90% of their former benefits – in other words, 20,000 current and former BHS staff will lose 10% of the value of their savings. According to the Financial Times, 4,804 of the 5,945 pension schemes eligible for the Pension Protection Fund, a government-backed scheme to protect pensions, are in deficit, which came to £270 billion altogether at the end of April – putting thousands more people at risk. 

 

Large numbers of people seem to feel like they have no reason to or way of contributing to debate in the media.

In the coming weeks and months journalists and politicians will discuss in the media how to reform pensions to reduce this deficit, but I’m willing to bet that the people affected won’t be able to join in: because they won’t feel qualified, and more importantly, they won’t be asked.

As long as ordinary people like those I spoke to at BHS on Monday don’t feel like they have a voice in the media public discussion in the UK will continue to be missing a crucial element – the public. The media will continue to report on speeches made by politicians about how to solve the pension crisis and commentators will write about how to strengthen ethics in corporate governance, giving the impression of a vibrant public debate. But the reality will remain the same: a very small number of people continuing to talk to each other while everyone else is left to deal with the consequences.

Recent articles

Reader Comments

  • Macrocompassion

    Look to who owns the land of Greece and why they are not using it properly!

    Discover how much the value of the land is being speculated in by holding it unused and the resulting lack of opportunity. Why can’t small scale farmers begin their own production of farm produce and the selling of it to local suppliers for domestic consumption?

    Adam Smith (“Wealth of Nations”,
    1776) says that land is one of the 3 factors of production (the other 2 being
    labor and durable capital goods). The usefulness of land is in the price that
    tenants pay as rent, for access rights to the particular site in question. Land
    is often considered as being a form of capital, since it is traded similarly to
    other durable capital goods items. However it is not actually man-made, so rightly
    it does not fall within this category. The land was originally a gift of nature
    (if not of God) for which all people should be free to share in its use. But its
    site-value greatly depends on location and is related to the community density
    in that region, as well as the natural resources such as rivers, minerals,
    animals or plants of specific use or beauty, when or after it is possible to reach them. Consequently,
    most of the land value is created by man within his society and therefore its
    advantage should logically and ethically be returned to the community for its
    general use, as explained by Martin Adams (in “LAND”, 2015).

    However, due to our existing laws, land is owned and formally registered and its
    value is traded, even though it can’t be moved to another place, like other
    kinds of capital goods. This right of ownership gives the landlord a big
    advantage over the rest of the community because he determines how it may be
    used, or if it is to be held out of use, until the city grows and the site
    becomes more valuable. Thus speculation in land values is encouraged by the law,
    in treating a site of land as personal or private property—as if it were an
    item of capital goods, although it is not (Mason Gaffney and Fred Harrison:
    “The Corruption of Economics”, 2005).

    Regarding taxation and local community spending, the municipal taxes we pay are
    partly used for improving the infrastructure. This means that the land becomes
    more useful and valuable without the landlord doing anything—he/she will always
    benefit from our present tax regime. This also applies when the status of unused
    land is upgraded and it becomes fit for community development. Then when this
    news is leaked, after landlords and banks corruptly pay for this information,
    speculation in land values is rife. There are many advantages if the land
    values were taxed instead of the many different kinds of production-based
    activities such as earnings, purchases, capital gains, home and foreign company
    investments, etc., (with all their regulations, complications and loop-holes).
    The only people due to lose from this are those who exploit the growing values
    of the land over the past years, when “mere” land ownership confers a financial
    benefit, without the owner doing a scrap of work. Consequently, for a truly
    socially just kind of taxation to apply there can only be one
    method–Land-Value Taxation.

    Consider how land becomes
    valuable. New settlers in a region begin to specialize and this improves their
    efficiency in producing specific goods. The central land is the most valuable
    due to easy availability and least transport needed. This distribution in land
    values is created by the community and (after an initial start), not by the
    natural resources. As the city expands, speculators in land values will
    deliberately hold potentially useful sites out of use, until planning and
    development have permitted their values to grow. Meanwhile there is fierce
    competition for access to the most suitable sites for housing, agriculture and
    manufacturing industries. The limited availability of useful land means that the
    high rents paid by tenants make their residence more costly and the provision
    of goods and services more expensive. It also creates unemployment, causing
    wages to be lowered by the monopolists, who control the big producing
    organizations, and whose land was already obtained when it was cheap. Consequently
    this basic structure of our current macroeconomics system, works to limit
    opportunity and to create poverty, see above reference.

    The most basic cause of our continuing poverty is the lack of properly paid
    work and the reason for this is the lack of opportunity of access to the land
    on which the work must be done. The useful land is monopolized by a landlord
    who either holds it out of use (for speculation in its rising value), or
    charges the tenant heavily for its right of access. In the case when the
    landlord is also the producer, he/she has a monopolistic control of the land
    and of the produce too, and can charge more for this access right than what an
    entrepreneur, who seeks greater opportunity, normally would be able to afford.

    A wise and sensible government would recognize that this problem derives from
    lack of opportunity to work and earn. It can be solved by the use of a tax
    system which encourages the proper use of land and which stops penalizing
    everything and everybody else. Such a tax system was proposed 136 years ago by
    Henry George, a (North) American economist, but somehow most macro-economists
    seem never to have heard of him, in common with a whole lot of other experts.
    (I would guess that they don’t want to know, which is worse!) In “Progress and
    Poverty” 1879, Henry George proposed a single tax on land values without other
    kinds of tax on produce, services, capital gains etc. This regime of land value
    tax (LVT) has 17 features which benefit almost everyone in the economy, except
    for landlords and banks, who/which do nothing productive and find that land
    dominance has its own reward.

    17 Aspects of LVT Affecting Government, Land Owners, Communities and
    Ethics

    Four Aspects for Government:

    1. LVT, adds to the national
    income as do other taxation systems, but it replaces them.

    2. The cost of collecting the LVT is less than for all of the production-related
    taxes–tax avoidance becomes impossible because the sites are visible to all.

    3. Consumers pay less for their
    purchases due to lower production costs (see below). This creates greater
    satisfaction with the management of national affairs.

    4. The national economy
    stabilizes—it no longer experiences the 18 year business boom/bust cycle, due
    to periodic speculation in land values (see below).

    Six Aspects Affecting Land Owners:

    5. LVT is progressive–owners of
    the most potentially productive sites pay the most tax.

    6. The land owner pays his LVT regardless of how his site is used. A large
    proportion of the ground-rent from tenants becomes the LVT, with the result
    that land has less sales-value but a significant “rental”-value (even
    when it is not used).

    7. LVT stops speculation in land prices and
    the withholding of land from proper use is not worthwhile.

    8. The introduction of LVT initially reduces the sales price of sites, even
    though their rental value can still grow over a longer term. As more sites
    become available, the competition for them is less fierce.

    9. With LVT, land owners are unable to pass the tax on to their tenants as rent
    hikes, due to the reduced competition for access to the additional sites that
    come into use.

    10. With LVT, land prices will
    initially drop. Speculators in land values will want to foreclose on their
    mortgages and withdraw their money for reinvestment. Therefore LVT should be
    introduced gradually, to allow these speculators sufficient time to transfer
    their money to company-shares etc., and simultaneously to meet the increased
    demand for produce (see below).

    Three Aspects Regarding Communities:

    11. With LVT, there is an
    incentive to use land for production or residence, rather than it being unused.

    12. With LVT, greater working opportunities exist due to cheaper land and a
    greater number of available sites. Consumer goods become cheaper too, because
    entrepreneurs have less difficulty in starting-up their businesses and because
    they pay less ground-rent–demand grows, unemployment decreases.

    13. Investment money is withdrawn from land and placed in durable capital
    goods. This means more advances in technology and cheaper goods too.

    Four Aspects About Ethics:

    14. The collection of taxes from
    productive effort and commerce is socially unjust. LVT replaces this extortion
    by gathering the surplus rental income, which comes without any exertion from
    the land owner or by the banks–LVT is a natural system of national income-gathering.

    15. Bribery and corruption on information
    about land cease. Before, this was due
    to the leaking of news of municipal plans for housing and industrial
    development, causing shock-waves in local land prices (and municipal workers’ and
    lawyers’ bank balances).

    16. The improved use of the more
    central land reduces the environmental damage due to a) unused sites
    being dumping-grounds, and b) the smaller amount of fossil-fuel use, when
    traveling between home and workplace.

    17. Because the LVT eliminates
    the advantage that landlords currently hold over our society, LVT provides a
    greater equality of opportunity to earn a living. Entrepreneurs can operate in
    a natural way– to provide more jobs. Then earnings will correspond to the
    value that the labor puts into the product or service. Consequently, after LVT
    has been properly introduced it will eliminate poverty and improve business
    ethics.