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Myners defends RBS pension stance Myners defends RBS pension stance
(about 6 hours later)
City Minister Lord Myners denies "endorsing" the £693,000-a-year pension of disgraced Royal Bank of Scotland (RBS) boss Sir Fred Goodwin. City Minister Lord Myners has denied "endorsing" the £693,000-a-year pension of former RBS boss Sir Fred Goodwin.
Speaking in the House of Lords, the minister mounted a vigorous defence of his personal role in the affair. He told peers he had not been told exactly how much Sir Fred would get but he did know it would be a "large sum".
He said he had not been told exactly how much Sir Fred would get, though he did know it would be a "large sum". Meanwhile senior Labour MP John McFall has told the BBC it is not Parliament's job to interfere in people's pensions.
Meanwhile, the chancellor has told the Daily Telegraph that ministers must have the "humility" to admit mistakes. On Sunday minister Harriet Harman said ministers would "step in" and Sir Fred's pension "will not be accepted" - even if it was legally enforceable.
Lord Myners has been blamed by the opposition for failing to block the massive pension payout during the crucial negotiations last October to bail out the banks which saw Sir Fred ousted as RBS chief executive. Sir Fred, 50, agreed to take early retirement as RBS chief executive in October as the government prepared to pump £20bn into the troubled bank - but his pension fund doubled to £16m.
Gordon Brown has confirmed lawyers working for the government were looking at Sir Fred's contract with RBS to see if any of his £16m pension pot could be withheld. Minimise severance
Lord Myners said that during the weekend of the bail-out, he did not meet RBS chairman Sir Tom McKillop and the senior independent director Bob Scott until the evening of 11 October - the day after it was agreed that Sir Fred would leave the bank. The prime minister has said he only discovered recently it could have been blocked. Government lawyers are now scrutinising Sir Fred's contract to see if any of his £16m pension pot can be withheld.
At the talks, in which he was accompanied by a lawyer acting for the Treasury, he said he had used a "standard script" to set out the government's position. Lord Myners told the House of Lords he did not meet RBS chairman Sir Tom McKillop and the senior independent director Bob Scott until the evening of 11 October - the day after it was agreed that Sir Fred would leave the bank.
I was assured the pension arrangement for Sir Fred Goodwin reflected 30 years of service Lord Myners "I said that, in exchange for support, we would expect there to be no rewards for failure," he told the House. I was assured the pension arrangement for Sir Fred Goodwin reflected 30 years of service Lord Myners class="" href="/1/hi/business/7918994.stm">Can they stop the pension?
"I said that, in exchange for support, we would expect there to be no rewards for failure," he told peers.
"We would expect the boards to minimise the cost of any severance that would arise and we would expect those who were departing from the banks to mitigate to the maximum possible amount the cost of their departure.""We would expect the boards to minimise the cost of any severance that would arise and we would expect those who were departing from the banks to mitigate to the maximum possible amount the cost of their departure."
He said that he had added that he respected legal commitments and the rule of law and would not expect any company to break any legal and contractual agreement to which it was committed.He said that he had added that he respected legal commitments and the rule of law and would not expect any company to break any legal and contractual agreement to which it was committed.
"I was assured that the pension arrangement for Sir Fred Goodwin reflected 30 years of service, and no mention was made to me of discretion in that respect," Lord Myners said."I was assured that the pension arrangement for Sir Fred Goodwin reflected 30 years of service, and no mention was made to me of discretion in that respect," Lord Myners said.
"No sum was mentioned, although Mr Bob Scott did tell me that Sir Fred's pension would be a large sum. I believe I was only advised of the sum of the pension a few days later. "No sum was mentioned, although Mr Bob Scott did tell me that Sir Fred's pension would be a large sum. I believe I was only advised of the sum of the pension a few days later."
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"I did not endorse the pension of Sir Fred Goodwin. I was shown no papers. I was given no advice, because no decision was sought from me in respect of his pension." "I did not endorse the pension of Sir Fred Goodwin. I was shown no papers. I was given no advice, because no decision was sought from me in respect of his pension," he said.
Meanwhile, the Financial Times reported on Tuesday that Sir Philip Hampton, RBS chairman, has been awarded £1.5m of share options on top of a £750,000 salary. Meanwhile the Financial Times reports that Sir Philip Hampton, RBS chairman, has been awarded £1.5m of share options on top of a £750,000 salary.
Executives from UK Financial Investments, the body set up by the government to oversee the taxpayer's banking interests, will give evidence to the Treasury select committee on Tuesday. The disclosures come as executives from UK Financial Investments, the body set up by the government to oversee the taxpayer's banking interests, give evidence to the Treasury select committee.
Chairman Glenn Moreno and chief executive John Kingman are likely to be quizzed about bonuses and Goodwin's pension. It seems to me on the surface that Sir Fred got the best of both worlds John McFallTreasury committee chairman
And in an interview in the Daily Telegraph, Chancellor Alistair Darling said ministers must have the "humility" to admit mistakes were made in the lead-up to the financial crisis. Chairman Glenn Moreno and chief executive John Kingman are likely to be quizzed about bonuses and Goodwin's pension by the committee on Tuesday.
The committee's chairman, the Labour MP John McFall, dismissed suggestions the law could be changed to try to claw back some of Sir Fred's pension.
He said that would set a "bad precedent".
"I certainly don't think it's Parliament's job to interfere particularly in a person's pension, and I don't know if Harriet was saying that," he told BBC Radio 4's Today programme.
He said he would be looking for "clarity" on the pension deal - such as who on the RBS board had agreed to it and whether they had considering firing Sir Fred.
"If they had fired him he would have had 12 months' pay but no early pension. If he retired he would get no compensation. It seems to me on the surface that Sir Fred got the best of both worlds," he said.
The issue of retrospective legislation was raised when Ms Harman, the deputy leader of the Labour Party, told the BBC on Sunday Sir Fred "should not count" on being £693,000 a year better off "because it is not going to happen".
"It might be enforceable in a court of law, this contract, but it is not enforceable in the court of public opinion and that is where the government steps in," she said.
The idea was dismissed as "potty" by Lib Dem Treasury spokesman Vince Cable.
Meanwhile in an interview in the Daily Telegraph, Chancellor Alistair Darling said ministers must have the "humility" to admit mistakes were made in the lead-up to the financial crisis.
Mr Darling said: "There are a lot of lessons to be learnt by regulators, governments, all of us. All of us have to have the humility to accept that over the last few years things have got out of alignment."Mr Darling said: "There are a lot of lessons to be learnt by regulators, governments, all of us. All of us have to have the humility to accept that over the last few years things have got out of alignment."