Getting Irate So That You Don't Have To

Getting Irate So That You Don't Have To

Sunday, 1 March 2009

Goodwin Intentions

I'm going to be very, very interested to see what the Government does about Fred Goodwin's pension.

They seem adamant that the pension cannot stand as it is. While the Womble was shouting himself hoarse encouraging his son's football team this morning, Harriet Harman (she of the divine looks 20 years ago) was busy doing some pontificating of her own on the Andrew Marr Show.

"Sir Fred Goodwin should not count on being £650,000 a year better off because it is not going to happen," Harman said. "It will not be accepted and the government will take action. This contract might be enforceable in a court of law, but it's not enforceable in the court of public opinion, and that's where the government steps in".

So, the contract through which Goodwin received this pension is entirely legal, it seems. Which suggests that taking any of the money off him would be illegal. But the government's going to do it anyway ? Or legislate in this one particular case ? That's to say they're either going to ignore the law or create a new one, just to turn Goodwin over ? Jumping Jesus.

Have you ever heard such priggish, righteous hubris in all your life ? Whatever we might feel about Goodwin taking £650K a year for doing nothing post his work at RBS, the facts are these:
  1. His pension was agreed through fair and legitimate negotiation as part of his contract, either before or during is time at RBS;
  2. Government ministers effectively sanctioned the pension as part of Goodwin's exit from RBS in the autumn.

The second point is absolutely crucial here. If' you get "asked to leave" a company, you negotiate, making damn sure that the conditions of your departure are as good for you as they can be, and you get them formally agreed and documented before you go. If you manage to get your bosses to agree to something that many would think outrageous, that's not your fault.

By all accounts, the minister at the centre of it all, Lord Myners, knew just what Goodwin's pension would amount to at the time. He now whinges that he hadn't known that the pension agreement in place for Goodwin was not contractually binding. Well, tough. Tough on him, and tough on us too, because we have to pay for his ignorance; but the government cannot now go back on their word and claw back money from Goodwin which they had agreed to give him.

We appear to be faced either with the government's lawyers finding some gift of a loophole in the Goodwin arrangements (unlikely), or the government legislating retrospectively to reverse what would otherise be a contractualy binding agreement. The second option really, really stinks, even by New Labour standards. It would mark a new low in their relationship with personal liberty were they to introduce a new law especially to deal with the ramifications from their own cock up.

Incidentally, on the subject of "rewards for failure", I bet Harriet isn't likely to renounce her own pension rights at the end of her lamentable career in the House of Commons; a pension to which taxpayers will have contributed roughly twice as much as the average private sector company contributes to their own employees' schemes.

Shut your noise, darlin' ! You might have aroused the Womble at around the time Mrs T was at the helm, but you're out of line on this one !


Donald Swarbrick said...

Who created the loophole in the first place? Goodwin: good win... or not?

TBR said...

yes this is one big load of s**t.

it's either banned or compulsory said...

I believe that they will quietly let this one drop. Too many bankers, politicos, public sector workers, union leaders and bosses of all political persuasions have pigged in the troughs of bonuses, pensions, expenses, inflated salaries and other indulgent benefits that might need looking at retrospectivly.
And they know rhat such retrospective legislation might just come and bite them.