Staff and customers of Lowcost Travel Group (LTG) – owner of Lowcostholidays – like employees of BHS, have every right to be furious. The former have lost jobs or breaks they have paid for, just as the main holiday season begins, some of whom reportedly bought their holidays just hours before the company collapsed. The latter have been made redundant and a question mark hangs over their pensions. The recourse available to either group appears limited, at best.
Where the chief executive of LTG, Paul Evans, at least offered a tearful apology, Sir Philip Green, the former owner of BHS, is less repentant. He was on his yacht when the excoriating Commons report appeared, and he may or may not be shamed into footing the pensions bill. If he doesn’t – and the obligation seems more moral than legal, as he had sold the company before it folded – some of the tab will be picked up by the state.
In other words, not only will taxpayers like you and me find ourselves subsidising a rather wealthy man, but others could be tempted to offload their obligations likewise. This is where moral hazard comes in. The little people get hit, the big guys sail away, and the government steps in to mitigate the damage.
We saw something similar with the banking crisis. Then, Fred “the Shred” Goodwin was one of the few to take a hit, losing his knighthood and a part (though not a huge part) of his handsome pension. Those who lost their jobs or who subsequently – as in the Libor-fixing case – actually came to court were relatively junior. The banks were considered, in that immortal phrase, “too big to fail”. In the absence of any identifiable crime, there was nothing to be done.
In this country, we seem conspicuously bad at holding to account those who make bad judgements that bring catastrophic consequences for others. The occasional knighthood removed, I would submit, doesn’t really do it.
At least in business – real business that is not regarded as too big to fail – mistakes are sometimes punished. Sometimes people go bankrupt. Sometimes. If we move across to politics, the civil service and other areas of public life, however, you find not just impunity, but rewards that are piled on despite failure.
In this respect, it is a pity that the Chilcot Report on the Iraq War was eclipsed so totally by other, cataclysmic events in British politics. Pre-Chilcot, the tendency was to blame Tony Blair almost exclusively for what happened and Sir John Chilcot was pretty unsparing, too. But the retired civil servant did not stop at the Prime Minister. He found that plenty of others shared culpability for the most disastrous chapter of British foreign policy since Suez.
And while Mr Blair can claim, with some justification, that his party’s MPs and the British people could have voted him out – and in a way they, we, eventually forced his early departure – we have no such say in the fate of government ministers, senior civil servants, leaders of the intelligence services, or members of the top brass, many of whom were blamed by Chilcot for colossal misjudgements, failure to act on information they had, or something akin to incompetence.
These were failings – individual and combined – that had highly negative repercussions. People these top officials were responsible for – including members of the armed forces left without suitable equipment and support – suffered or died as a result. The credibility of the intelligence services remains damaged, possibly for a generation, and the national interest was traduced in a way that still hobbles our diplomacy, and not just in the Middle East.
In some cases – procurement of equipment for the armed forces was a particular example – Chilcot found himself unable to pinpoint exactly where responsibility lay, itself an indictment of the system. But he also named names. And while a great deal was said on the day of the report’s long-delayed publication about lessons learned, it is hard to believe this will be so, given that not a single head – unless you count Tony Blair’s departure from national politics – has rolled. Not one peerage or knighthood has been removed.
Some were even awarded honours after the event. The only one I can remember causing any fuss was the knighthood for John Scarlett, then chair of the Joint Intelligence Committee and afterwards head of MI6. But he received it anyway, along with a clutch of directorships.
Indeed, most of those criticised by Chilcot sailed as serenely on as Sir Philip Green, post-BHS, in his yacht, acquiring board memberships, lucrative consultancies and speech-making. Among them are Geoff Hoon, former Defence Secretary, Sir Kevin Tebbit, a former chief civil servant at the Ministry of Defence, and Sir Richard Dearlove, ex-MI6, who added the headship of a Cambridge college to his repertoire. Such are the penalties, it would seem, for making misjudgements that had profound international consequences.
Post-Chilcot, I have asked why there are no mechanisms for holding top officials to account when things go so badly wrong on their watch. The answers were various. Some said: do you want them to wear sackcloth and ashes and do good work, like John Profumo did, to their dying day?
Others said bluntly that there could be no sanction for mistakes even of this order, so long as there was no violation of the law. Yet others said the very threat of punishment could make decision-making worse. The most popular answer, however, was that those concerned would take the “reputational damage” to heart, and that was enough.
I cannot agree. And it is hard not to feel that this lack of any kind of sanction for mistakes of this order has helped fuel the alienation from government that has brought us Jeremy Corbyn and Brexit. Nor is it true that nothing can be done. One of our near neighbours has just shown the way.
The 10 worst areas for earning the living wage
The 10 worst areas for earning the living wage
1/10 1. West Somerset 41.9%
2/10 2. Harrow 41.8%
3/10 3. Torridge 41.6%
4/10 4. North East Derbyshire 39.6%
5/10 5. Breckland 39.3%
6/10 6. Waltham Forest 39.0%
7/10 7. West Lancashire 38.2%
8/10 8. North Norfolk 37.8%
9/10 9. Melton 37.0%
10/10 10. West Devon 36.7%
Last week, the French authorities announced that Christine Lagarde, now head of the IMF, would be brought to court for negligence in public office, following a particular decision that she took in a complex and contested case while finance minister. The court is a special tribunal designed to hear cases such as this. It can fine people and bar them from public office.
Could not the UK, in the wake of Chilcot, set up something similar, with a VIP version of community service also at its disposal? One way or another, UK voters need to be convinced that punishment is not just for the little people. If justice is to mean anything, big cheeses and fat cats who make costly mistakes must be subject to sanctions, too.