« Guy can count his blessings | Main | Money, Money, Money »

Fred the Shred the Law

From The Barrel of a Gun: More On The Robber Barons

Herr Harman was full of pant-fillingly scary quotes such as:

It may 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.
Sir Fred Goodwin should not count on [keeping his money] because it is not going to happen.
The prime minister has said that it is not acceptable and therefore it will not be accepted.

And (Fantasy Island) treasury spokesman Vince Cable said:
Nobody disputes that Sir Fred should be deprived of his pension.

Nobody? Is there nobody who recognises the rule of law anymore, nobody who recognises a smokescreen for what it is, nobody who knows where the finger of blame should really point?


Well I dispute that he should be stripped of his pension, because that runs roughshod over the laws of contract. If contracted arrangements are at the whim of politicians then no-one's pension or financial agreement is safe.

Anyone who thinks otherwise just isn't thinking.

Please feel free to go to


and see what I'm going to say to Sir Fred.

The law apart, anyone think HM present government is worth a pension? Or their salaries? Or their expenses? Or anything else? How about a vote.

What's wrong with using employment law against Fred the Shred? I can't see how RBS doesn't have claims against him for reckless mismanagement (if he tries saying that the Board went along with him, then rope them in as defendants). He wasted shareholder wealth on an heroic scale. It shouldn't be difficult to prove recklessness. It's then just a matter of sorting out appropriate compensation from Fred to shareholders. This is a much better route than retrospective legislation.

OK then let the RBS do all that and let the NuLabour bozos get on with their job of ruining ... er, [i]running[/i].. the country.


"I can't see how RBS doesn't have claims against him for reckless mismanagement (if he tries saying that the Board went along with him, then rope them in as defendants)"

What if they did? Presumably RBS would not have agreed the pension deal if they didn't think it worthwhile. Lord Myners agreed Fred's pension too. Bear in mind Fred gave up a year's severance pay and substantial bonuses (total value approx. £5million) in return for getting his pension now (£8million added to his pension pot so net cost £3million).

Brilliant value for money from the Government's point of view as it has distracted from £325billion guarantee we may be lumbered with, an injection of £26billion of capital taken from our pockets and the deteriorating state of the Lloyds Banking Group (who may soon request about £250billion of guarantees). Mugabenomics at it's very best. Now with Mugabelaw to boot!

The much maligned deal to buy ABN Amro was subject to a bidding war between RBS and Barclays. Hindsight is a wonderful thing but there was nothing exceptional about Fred's business practices, and of course if the Government wish to now claim he was reckless then why didn't they, the FSA or the Bank of England say anything at the time? The answer to that is that all - banks, FSA, Treasury and BoE - couldn't see the risks on the horizon. Yet these people are paid handsomely out of our pockets to do precisely that.

The FSA in particular knew the banks were moving risky lending from the banks to the insurance and investment sectors via CDOs and suchlike. They were concerned enough to mention this transfer of risk in their annual Financial Risk Outlook reports. What they failed to spot was that banks, having moved on their risky business simply undertook more to replace it. This created ever more risk within the financial system as opposed to simply spreading a finite amount around.

Harriet Harman wants to cut down all the laws in England to get at the devil... I wonder who will be left standing in the winds that will blow then? Not her, I hope - and not me, because I shall have emigrated if it's still allowed. On a more short-term subject, I wonder how I can start hiding my money from her? Burying gold coins in earthenware pots is probably quite a good idea, and deniable. The EU said they wanted to start making a list of tax havens so as to crack down on them... it would be handy if they published the list.

Post a comment