Harman steps up in Commons, and trips over Sir Fred

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Standing in for Gordon Brown at Prime Minister's Questions, Labour's Deputy Leader claimed that the former Royal Bank of Scotland chief executive had been given a knighthood only because of charity work and not for "services to banking".

But within minutes her office was forced to correct the record, admitting that Sir Fred had indeed been given his award for his banking expertise.

Ms Harman was also forced to retract her claim made at the weekend that legislation could be drafted to deny Sir Fred his £700,000-a-year pension.

Shadow foreign secretary William Hague attacked her for Labour's failure to deliver help on the economy but also joked mercilessly about speculation she could replace Mr Brown.

Ms Harman, who has outflanked fellow Cabinet ministers in calling for tough action on Sir Fred's pension, was asked during the Commons clash just why the banker had been given a knighthood by Labour.

She replied: "I think Sir Fred was nominated for a knighthood because of his services for the Prince's Trust. I understand it was not in recognition of his services to banking."

But her account was at odds with the official record of the award made for the Queen's birthday honours in 2004 which said that he was knighted "for services to banking".

Within an hour, her office said: "The Leader of the House is happy to correct what she said at Prime Minister's Questions today regarding Sir Fred Goodwin's knighthood.

"It was, in fact, the case that he received his honour for services to banking."

Mr Hague also accused Cabinet ministers of "manoeuvring for the leadership" and listed a string of promised help which had failed to materialise, from aid for those worried about mortgages to business loans.

He told Ms Harman: "Why don't you step in? When Chamberlain lost his party's confidence, Churchill stepped forward. When Eden crossed the Atlantic exhausted, Supermac came forward.

"While the Prime Minister is away will you step in and make sure these schemes are actually implemented now?" Ms Harman replied: "While you focus on political gossip, we focus on fighting for Britain's future."

On Sunday Ms Harman used a TV interview to say Sir Fred should not be "counting on" getting the £703,000-a-year pension.

Liberal Democrat deputy leader Vince Cable ridiculed the "eccentric proposal for Harriet's Law" but said the Government should use existing legislation to strip Sir Fred of his pension on the grounds of being a "negligent employee".