During the good times when RBS were making billions from taking massive unregulated risks, New Labour was in love with Fred Goodwin and he in turn in love with New Labour. Of course his Knighthood was a reward for services to banking not any association with the Labour Party but as the wool has been pulled over the Government's eyes in relation to the massive pension pot he is being paid by the taxpayer questions really have to be asked about how cosy Sir Fred and New Labour really are.
When Sir Fred was asked to resign he apparently made it clear to Government Ministers that a condition of him agreeing to do so was retention of an overly generous pension pot. Today we hear that Sir Fred is to receive £693,000 per annum for the rest of his life as a reward for failure because the Government were told this was a contractual requirement and did not ask for proof before agreeing to his resignation on this basis.
There is of course the possibility that someone in Government did know that it was not a contractual obligation but a condition of resignation and that they decided this was a price worth paying in order to get Sir Fred out the door and a new more competent broom into RBS. I would not agree with this but if this is the case the Government should say so.
If, instead, the truth is that Government Ministers did not check whether they were obliged to allow Sir Fred to retain his pension pot then the Ministers and their officials are incompetent and they should resign for failing the UK taxpayer so spectacularly. Sir Fred is only 50 and we can expect to be paying him millions and millions of pounds as a reward for taking risks with a well respected institution to the verge of bankruptcy.
Turning one of our largest banks, one of our largest employers and a company that bares the Scotland name with pride into a basket case is simply not something the taxpayer should be rewarding. If we cannot challenge paying Sir Fred his pension in the courts and Sir Fred is not prepared to give up his entitlement to his pension voluntarily then we must legislate to ensure that nothing like this can ever happen again - even if it is a contractual obligation.
We all need to tighten our belts and being ripped off by someone when it was avoidable is a national disgrace. Had we simply sacked the man he would have been entitled to £1.5million up front (one years salary) but would not have been able to claim a penny of his pension pot until he hit retirement age - a saving of nearly £8.9million by my calculation.
Labour have failed the taxpayer here and someone must take responsibility and resign. If Sir Fred won't set an example of taking responsibility by giving up his pension pot someone in politics must set an example for him by taking responsibility and resigning. The taxpayer deserves nothing less!