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Monday, 2 March 2009

In the spirit of Voltaire

This weekend the airwaves were full of Harriet Harperson going on about other people's pensions. I may not like the idea of Goodwin's arrangements but I will defend his right to get what was agreed for the following reasons:

  1. His pension is an entitlement that was paid for as part of his remineration package and is just as much an entitlement as his right to hang on to salary already received. Much of his pension rights were transferred in from previous employment. Goodwin was formerly a parterner at ccounting firm Touche Ross. His pension rights from that time will have been substantial.
  2. Goodwin is being held accountable for the £24 billion accounting loss in 2008. Probably fair enough, but if that is the measure of the man it is churlish not to also recognise the profits of RBS many times that figure in prior years. Is the government considering handing back the tax from those years? Far from it they are trying to stop RBS claiming tax losses from 2008 in future years.
  3. The arguments that the government bailed out his pension are probably wrong and he should be entitled to no more than £20,000. RBS was not insolvent but merely under-capitalised. If there was a deficit on the pension fund (not even clear that there was on), then the capital in the bank (the BIS Tier 1 cushion) would have been more than enough to fund any deficit, but in essence Goodwin's pension, like all the other RBS pensions had already been paid for.
  4. You don't have to be 60 or 65 to take a pension. Military pensions are drawn early, and former PM's and Chancellors draw theirs immediately. Goodwin was allowed to draw his early and their is an economic cost associated with that. That is a mistake by the government for allowing it.

I am no fan of Goodwin, but if anyone wants to take away his pension, that just smacks of spiteful vindictiveness. We might expect that from Robert Mugabe, but not from the British government.

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