Sir Philip Green has agreed to pay £363 million to settle the pension scheme of collapsed retailer BHS, following months of public outrage.
The billionaire tycoon said the amount, less than the £571 million deficit the firm was left with when it went bust in April last year, represents a “significantly better” outcome than if the scheme entered the Pension Protection Fund (PPF).
The collapse of the high-street giant impacted 11,000 jobs and around 19,000 pension holders.
Sir Philip said: “I have today made a voluntary contribution of up to £363 million to enable the trustees of the BHS pension schemes to achieve a significantly better outcome than the schemes entering the PPF, which was the goal from the outset.”
But Frank Field, the Labour MP who co-chaired a parliamentary inquiry into BHS’s demise and has acted as Sir Philip’s chief tormentor, warned: “It doesn’t end here.”
He said: “I think there are a lot of other issues which are not solved by this which we will obviously be looking at and the courts and everybody else will be.
“It’s not justice, but it is a milestone.”
News of the settlement comes after the Topshop owner was grilled by MPs over the sale of the chain, which he owned for 15 years before offloading it for £1 to former bankrupt Dominic Chappell in 2015.
The fallout from the chain’s collapse sparked a lengthy parliamentary inquiry and left both its high-profile former owners potentially facing a criminal investigation.
But Sir Philip said Tuesday’s settlement brings “this matter to a conclusion” and apologised to the affected pensioners.
“Once again I would like to apologise to the BHS pensioners for this last year of uncertainty, which was clearly never the intention when the business was sold.
“I am also happy to confirm that any of the pensioners that have faced cuts over the last year will now be brought back to their original BHS starting level pension and will all be made whole.
“I hope that this solution puts their minds at rest and closes this sorry chapter for them.”
Sir Philip made a voluntary personal cash payment of £343 million towards improved benefits to the pension scheme members, and also made available an additional £20 million towards implementation costs.
The settlement will allow pensioners the option to receive entitlements at the level they were promised by the BHS scheme. Current pensioners who have received lower pension benefits since March 2016, because of the PPF level of compensation being paid, will now have the opportunity to receive lump sums.
In a series of extraordinary Pension Committee hearings last year, Sir Philip admitted that he sold the business to the ‘’wrong guy’’, adding that he would ‘’sort’’ the firm’s pension scheme.
MPs then backed a non-binding motion for the billionaire to be stripped of his knighthood, and Mr Field questioned whether the retail tycoon’s yacht could be seized to help shore up the pension fund.
Lesley Titcomb, the chief executive of the Pensions Regulator, said: “The agreement we have reached with Sir Philip Green represents a strong outcome for the members of the BHS pension schemes. It takes account of the interests of both pensioners and the PPF, and brings a welcome level of certainty to present and future pensioners.”
But former pensions minister Steve Webb, now director of policy at Royal London, berated Sir Philip, saying that he could have spared staff “many months of misery and uncertainty if he had stumped up the cash willingly, rather than only after many months of protracted negotiations”.
Former BHS office manager Lin Macmillan said she was cautiously optimistic about the agreement but needed to see further details before giving it “the total thumbs up”.
Labour MP David Winnick, who has previously questioned Sir Philip’s knighthood, said: “The very fact that Green has made this offer is the result of parliamentary and public pressure.
“It is most unlikely it would have been the case otherwise. It will now be up to those who have been adversely affected, and their representatives, to decide on the offer.”
Iain Wright, Labour MP and chair of the Business, Energy and Industrial Strategy Committee, said: “The news that Sir Philip Green may be paying up to £363 million is welcome and goes some way toward righting the failures and greed that we saw during the entire BHS saga.
“I’m pleased that the cross-party committees worked together and kept the pressure on Sir Philip Green for him to sort it’, as he promised.
“The 20,000 BHS pensioners should find themselves at least no worse off as a result of the collapse of this iconic British store.”