AT THE start of this month, Labour’s deputy leader Harriet Harman said that Sir Fred “The Shred” Goodwin should not be counting on being £650,000 a year better off as a result of this because it is not going to happen. 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.” This week, it emerged that Sir Fred is already £2.7 million better off, having pocketed that sum as an advance on his £16.9 million retirement nest-egg. In fact, according to BBC business editor Robert Peston, the initial payment is closer to £4.5 million because his former employers at the Royal Bank of Scotland agreed to pay the tax liability of £1.8 million. This week, the Government stepped in. But it has only taken baby steps. As it remained unclear how much – if any – of his advance Sir Fred would pay back (although currently he should get it all eventually). Treasury minister Lord Myners told MPs that he had not approved the pension deal. Well, almost no one has approved – or approved of it – but the court of public opinion seems to be having two fingers waved at it. Curiously, Ms Harman has gone silent on the issue. Perhaps, as so often happens, we should take a leaf out of the Americans’ book. Edward Liddy, the new chief executive of bailed-out insurer American International Group, told the United States Congress that the controversial bonuses agreed by those who were running the company before him were “distasteful” but necessary because of legal obligations. While “distasteful but necessary” may not go down well in the court of public opinion, it may be the best anyone can come up with.
