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Harman is frozen out over Sir Fred pension clawback
Joe Murphy, Political Editor02.03.09
HARRIET HARMAN was isolated today as Cabinet colleagues refused to back her threat of new laws to claw back Sir Fred Goodwin's £700,000 pension.
The Prime Minister and Home Secretary distanced themselves from the deputy Labour leader's idea of retrospective legislation to block the former Royal Bank of Scotland chief's payout.
Speaking on talkSport radio, Gordon Brown pointedly declined to repeat Ms Harman's claim that Sir Fred would not be allowed to keep the money. He stressed that government lawyers were studying "every possible avenue" under the current law to reduce the pension.
"Of course, if it came to a court of law we would be legally bound by the contracts that have been entered into," he said.
Jacqui Smith, the Home Secretary, also refused to repeat Ms Harman's assertion. "I hope that [Sir Fred] will respond to, as Harriet described it, the court of public opinion as well as the strict legalities of the situation," she said.
Downing Street did not slap down Ms Harman but made clear it was not considering passing new laws to deal with the issue. "What we are focusing on is how we can explore Fred Goodwin's employment contract," said the official spokesman.
The comment contrasted with Ms Harman's assertion in a weekend interview that Sir Fred would not keep his early-retirement payment even if it was lawful, implying a special Act of Parliament could halt the £13,000-a-week payments for life.
She said: "The Prime Minister has said it is not acceptable and therefore it will not be accepted. It might be enforceable in a court of law, this contract, but it's not enforceable in the court of public opinion and that's where the Government steps in."
Tony Blair's former communications chief David Hill today criticised Ms Harman for giving Mr Brown a PR headache as he flew out to the US. "On all these big trips abroad that the Prime Minister does, the one thing you don't want is a big story back home that's a distraction," he told BBC2's Daily Politics.
Shadow chief secretary to the Treasury Philip Hammond accused ministers of talking tough to disguise their failure to block Sir Fred's payout when they had a chance.
"They are throwing up clouds of smoke and tough talk to conceal the fact that they messed it up," he said.
"The Government is clearly regretting that it did not act tough at the time. They should have seen this coming."
City Minister Lord Myners is under fire for failing to realise that Sir Fred's pension pot was doubled by RBS just as taxpayers were asked to bail out the stricken bank.
The peer, a former businessman, believed Sir Fred was getting his contractual minimum. In reality, his retirement age was brought forward by 10 years.
John McFall, the Labour chairman of the Treasury select committee, announced he was summoning Lord Myners to explain the situation. He said: "Who signed it off?" Liberal Democrat spokesman Vince Cable said the Government should offer Sir Fred £27,000 a year and let him sue for the rest.
RBS, which is now more than 70 per cent owned by the taxpayer following a series of state-backed interventions, last week posted annual losses of £24.1billion, a UK corporate record.
Reader views (49)
Sir Fred Goodwin's knighthood should be rescinded.
- Argi Barghi, Eastbourne England
This story proves that the rich look after the rich,I wonder where Sir Fred will put his pension fund to avoid British Taxes?
- Stan White, leeds
I never thought I would agree with Harman on anything but regarding "Sir" Fred Goodwin I do this time. Pity the lamebrain Labour followers don't.
- Michael Waugh, South Kensington
Wide-ranging changes in legislation are needed now. Fat cats are holding back society.
- John, London
Harriet Harman is the last politician I will trust: wasn't she the one who sent her children to a private school saying that her public stance should not come in the way of her giving her best to her children.
- Nat, New Malden, UK
It's all rhetorical poppycock. The woman is deluded - like most of her Cabinet comrades.
- Charlie, Nr. Crackpot, North Yorkshire
Whom I wonder, set the trap dear Harriet fell into ?
- Wills, Soton
I favour Vince Cable's solution . Let him sue - RBS was tecnically bankrupt and he was the man who steered them into a sea of bad debt. Do not lket the brown Harman puch and Judy show let Fred escape with his ill gotten gains.
- Paukl Scott, Edinburgh
It looks like even Gordon Brown doesn't like a gob on a stick.
- Ann Louisa, London
This whole "government" should be frozen out! It was Crash Gordon's bunch who made Sir Fred "Sir" and who propelled him into stardom and who arranged the huge pension. Now of course Sir Fred is not their friend anymore...
- Phil, Islington, London
It appears that the Govt. knew about this long ago and weren't bothered.
While a pension pot of £16m is obscene in relation to what most of use will get, in the grand scheme of things it is petty change.
The Govt have bailed out the banks to the tune of $1.5 trillion and no one seems to be getting the blame, sack or their heads chopped off much less charged with corporate neglect / fraud.
Fred's pension is a good distraction. A chance to bury bad news. His won't be the first or the last either.
He is likely to walk away with the whole pot and there's nothing Brown or Harman can do about it.
- Adam, Harrow, UK
A contract is legally binding and the people who signed should be held accountable. How many retrospective laws does she hope to bring in the future?
- Harry The Bull, London
The politicians can't ask for the individual to act morally when they don't re 2nd homes, voting themselves pensions and pay rises etc. Everyone has their snout in the trough with the confidence that nobody is willing to rock the boat.
- Tom W, Woking, England
Good. Whilst I hardly applaud Goodwin taking his pension, any new laws to stop him would mean no-one's pension would be safe.
- Roy, England
Lets start with the "Sir", this wrecker is the last person who should be left with a title. Probably the only sanction left to this government of incompetents.
- Frank, Dorchester Dorset
How about also tackling Jacqui Smith's 'misuse' of public funding regarding her sister's home.
- Allie, Enfield
How about darling Harriet foregoing her pension rights which are huge compared to the rest of us mere working classes.
- Harvey Lawrence, London UK
Like most I looked on with mixed and emotive reactions, but...
Retrospective legislation?!, no, no, no, NO!!!! The whole judicial system rests on the fact no-one can claim ignorance of the law, if they were aware of it or not. No-one can be safe to step foot outside of their home if stepping over a kerb, as a trip hazard, means they are taking legal ownership of said kerb and therefore for illegal parking, trips, falls, damage to property and said kerb itself 'cos the Home Secretary says so 4 years later. Sound stupid? Legal precident in case law (England and Wales) but also LEGISATION covering the whole UK, in retrospect. GAAHHH!
When they appoint a Home Secretary, do they start dosing their food with vCJD?! I am starting to honestly wonder?! The only worse thing would be the Home Office staff repeatedly advising this, trying to set a legal precident with enough popular support so that any difficult issues later could be met by backdated law and immediate imprisonment of anyone who dares question anything contentious....
- Ian, london
For weeks now Brown has been trotting out the "do nothing party"at the opposition.He fails to realise how his party is viewed as "the say anything & then do nothing party".It is frightening to see Labour's lack of ability at such troubled times....they have taken ineptness to a new level
- P Doff, filey yorks
i can only applauded her moral rectitude and assume that given her stance, she will now declare that she is forgoing a large slice of her own pension as the public would recoil in horror at the unwarranted size of it.
- M.O'Brien, london.uk
They first manage to put a lot of idiots in the house of lords so they can have their support, then they agree to massive pay offs to baffoons like Fred who I wouldn't trust to run a corner shop, and now we wonder what's gone wrong.
- John Smith, London , England
If Gordon is still in America on Wednesday poor Harriet will be doing PMQs in his place - unless she is pulled out by Mandy. Batting for the conservatives will be William Hague who has given her an easy ride in the past. Unless she takes a hastily arranged duvet day she is in for a mauling. Its just too good an opportunity to miss. With the glum brigade sitting behind her and no one wishing to sit too close to her, I think PMQs this week will be a, "beam me up Scottie moment," for her. A fiver says she catches the flu, quite suddenly.
- Brian Gare, Norfolk Gorleston
The whole Goodwingate story is just a smokescreen to hide the populace from the real problems facing the UK. I do not give a stuff that Harperson is ostracised by Brown, Darling, Smith et al.
Stop worrying about one individual's misdemeanours and start asking what on earth the government is going to do to dig us out of the economic hole it has put us in.
- Nobby Clark, Perth, Scotland
Let's take him to court to get the money back, says the government. No, let's see if there is anyway we can get it back by reading through the small print, there must be a loop-hole somewhere. No, no here's a better idea, to save us embarassment, let's change the law to claw some of the money back.
The goverment should me ashamed of itself for allowing Sir Fred to walk away with this huge pension, but even more so for throwing all it's toys out the pram on this issue. Give it up Gordon and Co, you've failed.
- Joon, Streatham, South London
leave sir fred to have his pension, he will never be able to show his face in public again so let him have his absurd PUBLIC cash and let the good old british public judge him. He is now one of the most recognised faces in the UK so I cant see him leaving his house anytime soon!
- Alanj, London
I can think of better use of Parliamentary time than stuffing Sir Fred. There is the Bill for Coops and Credit Unions for a start to get through.
- Dhanraj, basildon
Goodness, it only took the Government 3 days to cave in. I was expecting at least a week.
- Paul B, London
Of course no one will back her, Gordon Brown alone will receive £123,000 a year in his government based pension scheme after the next election, why on earth would he want to open a can of worms as big as that?
- Bob, Cheam
It doesn't matter what was said in the contract. This clown should never have been allowed to "retire" anyway. He screwed up royal and in my books that is gross misconduct. He should have been sacked which would have cured the contractual obligations once and for all!
- Gareth, Hampshire
Who would you chuck out of the balloon? A greedy one-time banker, or a politician who thinks it's appropriate to discard the rule of law every time she has a hissy fit about anything?
Sir Fred will cost me less than 40p/year through my taxes. Harriet will cost us our free country if she gets her way often enough.
- Nigel, London
This government appears to have little balls when it comes to taking action against specific wrong doers who have misled government, shareholders and others and have left a trail of destruction through the financial sector. Perhaps Harriet Harmon should consider following through with a Private members bill specific to reducing Goodwin's pension back to what it should have been. It would be interesting to see who will or will not support such a bill.
- John W, Ottawa, Canada
As distateful as it is to see this man awarded a ridiculous pension overturning hundreds of years of case law is worse. If the Government can change their mind after the fact and refuse to honour a legal contract where does that leave business in the future? Incompetence is to blame and only if Goodwin lied to the board is he legally at fault.
- Mark, London
Interviewed recently on this issue, Peter Mandleson said that Sir Fred Goodwin "should do the honourable thing..." and give up his pension. I assume Mandleson has also told Jackie Smith "to do the honourable thing" and return the £100,000 she has wrongly claimed in expenses. Total hypocrisy as always from the Labour party.
- Malcolm, London
Looks to me as though Lord Myners and Sir Fred Goodwin were in a 'you scratch my back . . . ' relationship. Myners was highly experienced in the pensions industry. It is beyond belief that he didn't understand the terms of the retirement agreement that he signed off.
- Peter Haldane, London
Yet another fine mess that NuLiebor have saddled the poor taxpayers of this country with.
- Dee Jay, Fleet Hampshire
I happen to think what she said hit the nail on the head, everyone out there is really angry and she seems to be the only person speaking out against this.
I think it makes Brown look toothless, and a 'do nothing Prime Minister'
- Ivy, London
I think some of the (board members?) people who gave him the job should be called to task.
- Martin H. Watson, Teddington
Carver, you've got it in one - this Labour government have already made legislation retrospective with respect to taxes regarding pensions savings. They have no moral problem with doing so. It's currently the banks who are receiving tax payers funds to support them, previously it has been a bloated bureaucratic government and a dreadful amount of wasted money and inefficiency in public services that was leading to higher taxes from the Government with Brown as Chancellor. Government are squealing loudly regarding the failures of senior bank execs as they know its their only chance of avoiding blame for the mess we are in. The ineptitude in waving through Goodwin's pension only underlines the inability of the Government to grasp the issues here. Unfortunately the less informed 'man in the street' is falling for the Government's bluff and calls for nationalisation of the banks is crazy - the government cant even oversee the FSA let alone run the nation's banks!
- Dc, London
Are labour now going to stop Ken Livingstones pension, he told us the olympics were going to cost £2 billion, we are now looking at £11 billion and rising. What about the civil servants involved in the NHS computer fiasco which has cost the tax payer billions and still does not work.
Labour take no blame for the mess we are now in because its a world thing which nobody could have predicted, could the same not be said of RBS buying AMRO. whats the difference ??
- Steve M, London
Harriet is right about one thing. Gordon Brown, quite publicly, said this pension award was "unacceptable". When a Prime Minister says something is unacceptable and then accepts it, he loses the credibility necessary to govern. It is even worse when his Treasury Minister facilitated the unacceptable.
- Bloke, London
Shouldn't the MP's and Lords who take tens of thousand's of pounds of tax payers hard earned money as expenses for themselves, within so called 'rules' but bordering on the unethical, take a lead and give the money back?
........That'll be the day.
- Paul, Hertfordshire
I think this payout is disgraceful BUT it is even worse for Harriet Harman to say that it will be stopped 'even if it is lawful' - more or less saying - if the Prime Minister doesnt like it! This is actually frightening, suggesting as it does that if the Government doesnt 'like' a law, or agree with it, it can be over ridden. This is true communism now showing its face behind its labour mask! If Parliament can override our laws, then we are ALL threatened. It is interesting however to contrast this stance with the governments apparent inability to deport criminals and terrorists and deal effectively with illegal immigrants - because of Human Rights Law. I have never heard any of them suggesting THIS iniquitous piece of legislation can be ignored!
- Carver, newark,
Usual labour story ALL TALK AND NO DO!!!What a shower of Gobbies they all are.
- Peter Lewin, france
The only way to get this money back is if the government can show that when the agreed this ridiculous payoff RBS did not provide correct information about the level of debt that it had acrrued (ie if he lied about how badly the bank was doing)
- Andy, London
I'm hardly surprised ... "senior government insiders" are worried they might be next!
- Marianne, SW France
The question is not around Sir Fred payout or pension, if he failed a bank, then the labour party have failed a nation, then how is it that ministers are able to keep their large pension pots. Its about time that focus moved onto the mps that run this country and have abhorently ruined it, rather than Sir Fred!
- Raminder Bhalla, Northolt
Harman needs a reality check, clearly Labour have little respect for the law, but we do not yet live in a dictatorship where the Great Leader Brown can simply make things happen at a whim. Ironically if anyone should be giving up his pension should not the Chancellor who lead this country into the biggest economic downturn for nearly a century, including his claim to have abolished boom and bust, show some leadership and give up his right to any pension? Perhaps followed by the entire Labour front bench?
- Ian, London
Nero fiddling while Rome burned comes to mind.
- Maire, London
It is deeply worrying that a so-called "former businessmen" and cabinet minister like Lord Myners is so inept as to agree to Sir Fred's pension. He doesn't inspire much confidence in either businessmen or government.
- R.F., Yorks, UK
