Sir Fred should not count on 'unacceptable' £16million RBS pension, says Harman

02 March 2009 / by Rachael Stiles
Harriet Harman has spoken about the controversial £650,000 pension that ex RBS chief Sir Fred Goodwin is set to receive after taking early retirement from the now nationalised bank.

Speaking on BBC1's The Andrew Marr Show, the deputy Labour leader said that the huge pension is "unacceptable" and amounts to "money for nothing".

Sir Fred's pension was agreed to by minister Lord Myners, and the ex-banking chief has said that he will not be voluntarily giving up one penny of it, despite calls to do so from various parties, including the Prime Minister.

He may have refused to give it back, and lawyers have stipulated how difficult it will be to use the law to force him to do it, but Ms Harman was firm when she said that "the court of public opinion" will not stand for it and the Government will "step in" if necessary.

The massive pension payout, which Sir Fred is receiving at the age of 50 after taking early retirement from the flailing bank last year, was all the more highlighted last week by the fact that Royal Bank of Scotland announced record losses of £24billion for last year.

Sir Fred should not be rewarded in such a way for "bringing a bank to the brink of collapse" and putting RBS jobs at risk, Ms Harman said, and he should not "count on being £650,000 a year better off" because the Government "will take action" on this "matter of public interest".

All three political parties have spoken out on the disparity between the size of Sir Fred's pension – worth a total £16million – and the state in which he left RBS.

Conservative Shadow Chancellor George Osborne has accused Gordon Brown's anger over the matter as being "pretty synthetic" seeing as "it could have been stopped," he told the BBC.

He has little sympathy for Sir Fred, he said, whose business model led to the biggest losses in banking history, but added that much of the anger should be directed at the Government for allowing it to happen.

The issue of Sir Fred's pension has "further sapped confidence in the Government's ability to handle the banking crisis which is at the heart of this recession," he added.

Other ministers have said that they would consider taking legal action to claw back the pension, but Ms Harman is the first to be so explicit about preventing Sir Fred from keeping it.

Her words – which have been interpreted to mean the Government will change the law so that he can be denied it – have been met with criticism from her peers who are less certain that legal action can or should be taken.

"The prime minister has said that it is not acceptable and therefore it will not be accepted," she added.

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