Pensions cost of corporate failures should not be borne by other firms

Commenting on the impact that large scale business failures, like that of BHS, have on the broader business community and the economy, Dr Adam Marshall, Acting Director General of the British Chambers of Commerce, said:

“When big companies go bust, it doesn’t seem fair to make small- and medium-sized firms and taxpayers cover the pension deficits that are left behind. This is particularly true when there are legitimate questions about corporate decision-making and payouts to shareholders.

“Small and medium-sized firms make a substantial contribution to the Pensions Protection Fund through an annual levy. It would be unfair for their payments to have to rise to cover the deficits in gigantic schemes like that of BHS, and would be a potential brake on those levy payers’ future investment and growth.

“Levy-paying firms of all sizes would be incensed if they find that they have to carry the can for huge corporate pensions deficits, just months or years after corporate shareholders received huge financial windfalls. We will be advocating for the interests of levy-paying businesses in Westminster, to ensure that high-profile corporate failures do not result in huge liabilities for other firms.

“However, possibly most concerning is the impact on the reputation of business as a whole. A small number of questionable corporate deals, pieced together by a small number of businesspeople and their financial advisers, have an outsized impact on how politicians, the media, and the public at large see business as a whole. In my interactions with Chamber member firms in recent months, the sense of anger about the actions of a few — making business harder for everyone else — has been palpable. We must continue to highlight the vast majority of businesses – and above all, Chamber members – whose commitment to community, to their people, and to great business practice is unshakeable.”

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