Thursday, November 09, 2006

Unfarepak

The phrase 'hard-working families' is over-used by all politicians, but rarely can it have applied so well as to those who have been hit by the failure of Farepak, dragged down by the collapse of its parent company, European Home Retail. In a packed debate, united by cross-party anger at the behaviour of the company, Anne Snelgrove, the Labour MP for South Swindon, kicked off at the directors and named them, almost spitting the names out
They were the finance director and company secretary Stevan Fowler, the independent non-executive directors Neil Gillis, Paul Munn and Michael Johns, the chief executive William Rollason—I understand that he is soon to appear in an Australian court, possibly on a not unrelated matter involving another company—the executive director Nicholas Gilodi-Johnson, who is set to inherit £70 million, and the chairman Sir Clive Thompson, formerly of Rentokil, who is a modern-day Scrooge. He bemoaned a 30p rise in the minimum wage when he was earning more that £2 million a year, he wound up the pension scheme at Rentokil for all but the executives and then walked off with a £690,000 a year pension. No doubt Sir Clive and the directors will be eating a very big turkey this Christmas and enjoying it.

Sir Clive Thompson wrote an article a few years back entitled 'How Labour Suffocates Business' in which he complained about regulation
Witness our government's ill-advised Rip-off Britain campaign, which inappropriately tarred with the same brush the whole of British industry

There are some who would gladly see this particular industrialist - a Tory supporter a few years ago and a past president of the CBI - denied the oxygen of oxygen. He seems to know more about rip-off Britain than most.

The core of this is that this scheme hurt some of the poorest people in society, but cruelly hit hardest at those who had thought to put a little aside in advance for Christmas. Rather than fall prey to loan sharks or credit cards or some of the more unpleasant sub-prime lenders, these people placed their trust in a company that claimed to protect their cash with a security bond. Unfortunately, that bond was for a mere £100,000 and the debts could top £45 million. As this area of the market concerns goods being held for payment and not strictly a credit scheme, it escapes the regulation of the Financial Services Authority - a position that will soon be altered, I suspect. Sir Clive had a view on regulation in 1999
...the Government imposes regulations and burdens on business, increasing our costs and lowering our flexibility to respond in fast-changing markets...

Ah, diddums.

This from the chairman of a company who was content to see the parent siphon off the cash to support a failing business. A man who didn't care that his firm was taking payment from the bottom rung of the financial ladder right up until the very minute that the receivers walked in in October - only after the last payments had been made. (And don't forget that HBOS took about a million a month from the company - hence their swift, damage-limiting donation of £2 million to the rescue plan).

Sir Clive left Rentokil after a dramatic profits warning in 2004, which wiped £436 million off the share value of the company. His pain was eased by a pension pot approaching £14 million - some way short of that which the typical low-paid Rentokil employee could expect. Our very own Digby Jones described Sir Clive as 'the very best' - words he might now choose to regret.

Perhaps he might see fit to donate some of his millions to the poor folk that his company rooked this year.

It is right to praise the companies that have come forward to offer support - even HBOS - Morrisons, Sainsburys, Tesco have all offered substantial sums. MPs reported that some firms have been underwriting credit unions to allow these families to join and immediately take advantage of this form of micro-lending. Even many of our much maligned MPs are digging into their pockets to donate to the campaign.

Why should we let Thompson and his cronies cancel thousands of Christmasses across the country? Hughes Views summed it up well, referring to an Edward Heath quote.

No comments: