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Minister tells of 'admiration' at Sir Fred's £3m lump sum
Paul Waugh, Deputy Political Editor17 Mar 2009
CITY MINISTER Lord Myners said he "admired" Sir Fred Goodwin today as it emerged that the disgraced banker is demanding an extra £3 million for his pension.
In a new bombshell, the minister revealed that the former chief executive of Royal Bank of Scotland had pocketed the money as a tax-free lump sum but was now offering to waive it in return for extra cash on his retirement deal.
Sir Fred, who left RBS on 31January is already under fire for refusing to give up a £700,000-a-year pension from the age of 50, which he turned last August.
The £3 million would top up his existing £16 million total pension pot. However, Lord Myners stunned MPs by suggesting that he had been impressed with the way Sir Fred had engineered his generous salary and pensions deal.
"One has to admire - in a non-approving sense - the dexterity of Sir Fred Goodwin in respect of his own contract," he told the Treasury Select Committee.
Committee chairman John McFall said: "You say you admire Sir Fred's dexterity, but at the end of the day it's the taxpayer who's a bloody mug here."
Downing Street immediately distanced itself from his remarks, pointing out that they were "his views" rather than those of the Government.
Lord Myners denied he had approved of Sir Fred's deal but he was accused by Labour MPs of being "bloody naive" about his conduct during the weekend of frantic negotiations on Sir Fred's pay-off last October.
The MPs heard a string of fresh revelations about Sir Fred's contract, including:
●RBS chiefs suggested they could cover up the pension deal by disclosing its details over "a couple of years".
●Lord Myners was warned last October that the pension would be "enormous".
●A new clause to allow Sir Fred to cash in his pension at 50 rather than 60 was inserted into his contract two days before he was told to leave RBS.
●RBS agreed to pay the £1.2 million tax on Sir Fred's £3 million pension lump sum.
●Sir Fred was credited with 20 years service even though he only joined the firm in 1998.
Lord Myners also said that it was "to Sir Fred's credit" that he was prepared to "repay the lump sum, but in return take a larger pension".
He also came under fire after admitting that Bob Scott, the man in charge of RBS's remuneration committee, had warned him that "the pension will be enormous". Tory MP Andrew Tyrie asked why the minister had not then pressed the issue to get details. "You knew it would be politically sensitive, you'd been told it was going to be large, but it didn't occur to you to ask 'roughly how much?' You're really asking us to accept that as the reasonable action of a competent minister?"
Lord Myners replied: "I do not think I slipped up," but he infuriated MPs further by describing the RBS board as "distinguished". He later said he regretted using the term and instead would describe the board as "experienced".
The minister went on the offensive against RBS management for agreeing to a series of generous terms for Sir Fred. He even claimed that former chairman Sir Tom McKillop and Mr Scott created "an elaborate ruse" to allow the banker to retire early.
Lord Myners said that it was "quite outrageous" that Sir Fred had a £13,000 a week pension while the basic state pension is £92. However, he admitted he was personally drawing a pension worth £100,000 a year.
Reader views (15)
Hang on a minute - regardless of the merits of his pension or not, I thought everyone was able to commute some of their pension when retiring - the money having been put in gross in the first place. In his case he had a scheme that was not gross and it was agreed years ago to tax equalise it - stop this hindsight management - this deal was done years ago. This country is starting to feel like living in some bannana republic with no rule of law.
- George H, London, 17/03/2009 19:01
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Unbelievable! Where do they get stupid people like this from?
- Ralph, GB, 17/03/2009 17:22
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Fair doos, I admire him too, he's managed to fleece this inept shamble of a government, although it would appear it doesn't take a mental giant to do that, just an IQ in double figures.
- Bob, Cheam, 17/03/2009 16:57
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This was bound to happen with this incompetent Labour. They create chaos in whatever they do.
- Jack, London, 17/03/2009 16:43
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i'd be interested to know if the admiration continues after the criminal investigation starts into false accounting and overstating past years profits.
Actually...WHY HASN'T THE CRIMINAL INVESTIGATION BEGUN??
- Dave, london UK, 17/03/2009 16:35
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If we really want to clawback the money paid to these undeserved fat cat bankers then why not raise the tax owed to 100% of all bonus payments above £10,000 paid to any employee of a bailed out bank?
It really is a simple as that.
- Phil, London, UK, 17/03/2009 16:32
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Fred the Shred is offering to give back the £3m tax free lump sum in return for a larger pension. He rushed through this greedy deal and noticed after the event that the commutation rates (rate of exchange pension vs. lump sum) is probably unfavourable and he can make more over the long term by taking it as pension (and screw the taxpayer even more).
- Ab, London, 17/03/2009 16:12
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It is what is known today as business globalization; in plain English; and without the sophisticated gobbledy-gook that hides the real intentions of the elite; World Globalized Corruption.
The Cockney language is far simpler to understand; we just call them all spivs.
- Mickyinlondon, london, 17/03/2009 15:56
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They're all a greedy, grabbing lot. It's a self-supporting magic circle. The executive of one business is on the remuneration committee of another, etc and each has his snout in the others' troughs. You have to admire the way Paul Myners trousered a reported £30mn from his position as chief of Gartmore. These people take risks with other people's money - not their own - and in the main create nothing merely shuffling a slice into their pockets as it passes though their hands. And it seems heads they win and tails they win. The Labour party has truly lost its soul.
- John Kew, london, 17/03/2009 15:53
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A year ago the papers were referring to Sir Fred as 'one of the City's most respected bankers.' This was about the time the shares began to dive, and the 18,000 people he put out of work were picking up benefits. He sure knows how to get money out of the taxpayer.
- John Problem, Hackney Wick, London, UK, 17/03/2009 15:45
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a man would have to admire a likely lad that scooped the pool despite his apparent failure to complete a proficient job. a touch of envy for the lad who got jam tomorrow today and walked away down the yellow brick road to a rosy future. there but for kismet go you, or i.
- Mike O'Brien, london.uk, 17/03/2009 15:43
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Delighted to hear that this banking genius is claiming more swill for his trough. All the more to deprive him of in the future when his attempted defence against the class action by (at the moment) North Yorkshire and Merseyside councils collapses,as did RBS,like a pack of cards. Pity we'll only see him in the civil courts.
- Tim White, london, 17/03/2009 15:32
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What scum we have had foisted on us....Goodwin was unelected mandelson ...unelected....myners..unelected & then to cap it all Gordon B.who was never chosen as PM by the electorate.
- P Doff, filey yorks, 17/03/2009 15:09
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I think the general public know that whatever they say is ignored, so what's the point, especially when the people making all these horrendous mistakes are not elected and it's all a job for the boys. Whatever happened to the money that the Phoenix 5 syphoned out of the tax payer called "Rover" - another whitewash !
- Don Elwin, Landeleau France, 17/03/2009 15:00
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Funny how thay admire people like Fred Goodwin but in the same breath would condemn NHS staff for seeking a pay rise,or bus drivers etc,or even miners who's only crime was to take action to preserve there jobs!
- Kev, London-UK, 17/03/2009 14:55
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