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Myners failed to question RBS chief's pension deal
Paul Waugh, Deputy Political Editor3 Mar 2009
City Minister Lord Myners was accused of "bumbling incompetence" today after it emerged that he had failed to question the massive pension awarded to disgraced banker Sir Fred Goodwin.
Pressure on the minister intensified when the Treasury Select Committee released fresh evidence showing he had not intervened to stop the £703,000-a-year pension for the ex-Royal Bank of Scotland chief executive.
The letter from RBS's senior lawyer revealed that the taxpayer could have saved £300,000 if "Fred the Shred" had been sacked instead of being allowed to take early retirement at 50.
MPs on the committee lambasted Lord Myners for his failure to secure a better deal. According to the letter from Miller McLean, group general counsel and secretary at RBS, the bank's remuneration chief Bob Scott "summarised" the pension deal to Lord Myners on 12 October last year and emphasised it would be "substantial".
"While there were other discussions about Sir Fred's package, RBS does not believe there was any further discussion of his pension terms," the letter said. "The company has no record of whether any questions were raised about the pension terms by Lord Myners." Michael Fallon, Tory vice chairman of the committee, said it appeared to be the result of either "a nod and a wink, banker-to-banker deal between Lord Myners and Fred Goodwin" or "sheer blundering incompetence".
John Kingman, head of the Government's UK Financial Investments arm, said Lord Myners had not been told the key fact that the board had decided to offer a discretionary deal which allowed Sir Fred to retire early.
Reader views (14)
I think Myners is a very competent man but just doing what his boss Crash Gordon said he should do.
- Steveo, London, NW1, 03/03/2009 19:19
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Instead of the government glibley giving away all of our future in huge payments to these fat cats (without any apparent legal obligation on their part to deliver), who just grin and grin and grin and grin (and then disappear, presumabley to Cheshire!) and to the banks (whose mismanagement got us to where we are today) on the 'promise' that they will release this money back out again and kick start the economy. And don't reward people for their failure and bad judgement, surely this is how you retrieve/freeze this obscene pension based on his failure and bad judgement which ultimately resulted in the banks huge losses! I have a simpler solution - Just give every working person a one off, tax free, kick-start bonus of say £1500k (per head), and let us benefit directly from this and spend it as we see fit to help get us and the economy back on track! Problem solved.
- Gladys Arbuthnott, London, 03/03/2009 19:06
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Myners is clearly simply not up to the job. If he did not check he should have done. he should resign now, giving up of course any right to either compensation for loss of office of pension.
- Ian, London, 03/03/2009 17:04
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The anger is not synthetic and it is justified. The anger is aimed at goodwin,Myners and our incompetent government. Most taxpayers are worried about inadequate pesions and would like redress on inept arrangement
- Paul S., Edinburgh, 03/03/2009 16:45
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One should not forget his boss, Crash Gordon, who... hired him, "encouraged" him to give this pension, put in place the lax supervision, maded "Sir" Fred Sir etc. etc. Shame (again) on Crash Gordon for lying.
- Georgie, Islington, London, 03/03/2009 16:40
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The taxpayers could have been saved £millions if the Bank had gone bust and Sir Fred would then have had to rely on the statutory pension provisions. What is the difference here, as wasn't the bank technically insolvent? Serious questions need to be asked as to why Myners et al did not carry out the basic due diligence checks on the Bank and its Board. This would be funny if it wasn't so serious.
- Sonia M., St Albans, Herts, 03/03/2009 16:04
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There is a very simple solution to the outlandish pension of Sir Fred.
Just change the tax laws in the budget so that pensions of over a £60k per year get taxed at say 90% on anything above that figure.
This would not only solve the Fred issue it would also deal with MPs, Bankers, local Gov.leaders and Civil Servants on bloated pensions. This would give these folks a very reasonable income but would leave the more modest pensions of lower rated public sector staff as is.
Such a move would could also lower the huge exposure the country currently has to public sector pensions
- Tony, cirencester UK, 03/03/2009 14:46
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Politicians need to get a serious grip now before we taxpayers get our minds round the mind boggling billions we are being given no choice but to pay for the incredibly gross negligence of mainly bankers and we become even more blood boiling-ly angry than we currently are.
The Govt needs to lead real change and start smashing up parts of the financial system that are rotten and properly holding the likes of Goodwin to full account and make examples of them thru criminal or civil prosecution.
Goodwin's pension is a red herring. Rather than teased out the door he should have been summarily sacked and marched out.
If the retribution goes no further than asking the Shred nicely to do the honorable thing re his pension, then the Govt is doing nothing to change the culture of the financial system, which will lead to continued extreme arrogance by future banking leaders.
- Mike, london, 03/03/2009 14:45
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This is just a case of grabbibg what can be grabbed before the window closes. It seems just after the RBS six nations deal is signed up the RBS is now making noises about cutting back sports sponsorship. Who will sanction sport sponsorship now this is a public bank. It would be interesting to know as a RBS customer how many managers employees and friends have been and will enjoy hospitality at the six nations matches.
- Crusader, Ormskirk, 03/03/2009 13:33
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'He wasn't told the details of the pension'. As my mother used to say when I was a child, 'You've got a tongue in head. Ask'
- Matilda, kot, 03/03/2009 13:24
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"deal was struck without approval of the full RBS board" Well , it wouldn't be as it's a pension deal and subject to the rules of the various schemes - nothing to do with the Board, once they had decided not to sack him. The level of contract and pension law understanding is so poor in this debate.
- Peter Bench, London, 03/03/2009 12:27
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I can assure you, Lord Myners, the anger is not synthetic.
- Bloke, London, 03/03/2009 10:53
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SO I didn't ask any questions before I gave them hundreds of millions of pounds of taxpayers money, I just assumed it would be OK. Is this really an acceptable defense? What else didn't he ask about?
- Mark, London, 03/03/2009 10:39
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Alas, this isn't good enough from Myners. If he didn't know the full details of this crazy payment to Goodwin, then he wasn't representing the taxpayers' interests with anything like enough diligence.
- Jgs, London, United Kingdom, 03/03/2009 10:19
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