Vince on Sir Fred Goodwin

by Stephen Tall on March 2, 2009

As we have come to relish and expect, Lib Dem deputy leader Vince Cable – who is acting party leader during Nick Clegg’s fortnight’s paternity leave – has been dispensing his wisdom on the current furore surrounding the £650,000 a year pension of RBS’s former chief Sir Fred Goodwin sanctioned a few months ago by Labour’s business minister Lord Myners.

Vince’s official statement yesterday made clear his view that Sir Fred should expect to lose £623,000 a year of his pension benefit without any need at all to adopt Harriet Harman’s proposed retrospective legislation:

Nobody disputes that Sir Fred Goodwin should be deprived of his pension. The only issue is what is practical. We need to be careful about the suggestion that new legislation should be brought in to apply to an individual and to apply retrospectively. The Government has had effective control over RBS and other banks for several months but is simply unwilling or unable to exercise that control in the interest of the public. It should do so immediately, making sure that Government directors on the boards of RBS and Lloyds sort out not just remuneration scandals but tax avoidance and other murky activities that have been swept under the carpet.

“In the case of Sir Fred Goodwin, it seems to me the Government would be on strong ground to tell him he is entitled to pension payments available to employees of bankrupt companies under the Pension Protection Fund, which have a maximum of £27,000 a year. If he feels that’s inadequate he can sue.”

A few hours later, Vince gave even shorter shrift to Ms Harman’s proposal, denouncing it as “utterly potty”:

The idea which she seems to be suggesting that you can bring a speical piece of legislaiton for one individual and apply it retrospectively seems utterly potty. I really don’t know whether she’s thought this through at all.”

Vince then went on to condemn Labour’s distraction techniques, which has diverted media attention from the government’s announcement of its asset protection scheme:

I think it was probably synthetic anger … as a way of detracting attention form the asset protection scheme. The real money is in the policy rather than the pension and I was certainly very critical of those proposals, that I think is the real outrage and what we should be focusing on. I think where the government has fallen down is that it has put vast amounts of money in the banks and they should have made sure they had government directors on the board. We’ve had this half way house and it’s not clear who is making decisions.”

There is, by the way, an interesting video of Vince explaining how Britain and the rest of the world landed itself in this financial mess over at the Guardian’s website here. The latest collapse of global capitalism summarised in 20 minutes – for what more could one ask?

No comments

Vince Cable should be ashamed of himself for going along with this nonsense.

If Goodwin is legally entitled to his pension, then of course he shouldn’t be arbitrarily deprived of it on the orders of ministers who find it politically expedient.

by Anonymous on March 2, 2009 at 5:45 pm. Reply #

He gained a legal entitlement only because the ministers were idiots at an earlier stage. Vince seems to think that there is a strong legal case for lowering his entitlement. Now, I have no idea if thats the case, but if it is then its no problem- I would be unlikely to support anyone reciving such a large salary from taxpayers, never mind a pension.

by Tinter on March 2, 2009 at 6:01 pm. Reply #

Vince is not saying that ministers should override the rule of law. Vince is saying that there are times when it is essential to recognise that the law is an ass, and this is one of them.

It was not incompetence that led ministers to overlook Goodwin’s pension. It was the little matter that they were a bit preoccupied with preventing the entire banking system from going belly-up that very weekend. That and the fact that RBS conveniently kept quiet about the pension aspect and/or may have actively misled their rescuers.

If you sign a contract with a supplier who does not deliver to your satisfaction, you are quite within your rights to refuse to pay, and wait for the supplier to sue. If the supplier has the gall to sue, and to traipse the story of his own incompetence through the courts in pursuit of his claim, then bully for him if he sticks it out and wins the case. But Goodwin might find his fellow bankers screaming at him to settle, and put an end to all the bad publicity. They might point out the better example being set by HSBC directors, who are quietly waiving their 2008 cash bonuses.

I see no reason whatsoever why government should not do whatever they can, within the law, to make belated amends for their own infatuation with ultraliberal capitalism!

by David Allen on March 2, 2009 at 6:27 pm. Reply #

“Vince seems to think that there is a strong legal case for lowering his entitlement.”

Obviously he doesn’t. If he thought that, he would advocate taking legal action to reduce the pension.

Instead, he’s just suggesting the government should prevent the pension from being paid (which it’s not in a position to do in any case).

The only consequence of this – unless professional negligence can be proved – is going to be an additional bill for the taxpayer to cover Goodwin’s legal costs.

Setting aside all the tabloid nonsense, it’s a very fundamental point. The only defence the citizen has against tyranny is the rule of law. No politician who fails to respect the rule of law is fit to hold office.

by Anonymous on March 3, 2009 at 12:56 am. Reply #

murky water. How much of Sir Fred’s pension was accrued PRIOR to being at RBS? It would be unfair to take that away.

by Matt Atkinson on March 3, 2009 at 11:30 am. Reply #

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