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| RBS ex-boss urged to cut pension | RBS ex-boss urged to cut pension |
| (20 minutes later) | |
| The government has asked the former chief executive of Royal Bank of Scotland, Sir Fred Goodwin, to forgo some of his pension. | The government has asked the former chief executive of Royal Bank of Scotland, Sir Fred Goodwin, to forgo some of his pension. |
| Chancellor Alistair Darling told the BBC of the government's approach after it emerged that Sir Fred is drawing a pension of £650,000 a year. | Chancellor Alistair Darling told the BBC of the government's approach after it emerged that Sir Fred is drawing a pension of £650,000 a year. |
| Although he is only 50, he is entitled to the payment for life, with a pension pot worth £16m. | Although he is only 50, he is entitled to the payment for life, with a pension pot worth £16m. |
| "You cannot justify these excesses," Mr Darling told the BBC's Today programme. | "You cannot justify these excesses," Mr Darling told the BBC's Today programme. |
| "We've got the lawyers looking at this, but I do think that on a voluntary basis, actually, Sir Fred could resolve this problem and he could do it quite quickly." | "We've got the lawyers looking at this, but I do think that on a voluntary basis, actually, Sir Fred could resolve this problem and he could do it quite quickly." |
| The controversy over Sir Fred's pension intensified as RBS announced the largest annual loss in UK corporate history. | The controversy over Sir Fred's pension intensified as RBS announced the largest annual loss in UK corporate history. |
| RBS, which had to be bailed out by the government last year, said that its 2008 loss totalled £24.1bn (£34.2bn). | RBS, which had to be bailed out by the government last year, said that its 2008 loss totalled £24.1bn (£34.2bn). |
| Sir Fred's strategy and decision to buy ABN Amro is widely seen as making the bank more vulnerable to the credit crunch and having to be bailed out. | Sir Fred's strategy and decision to buy ABN Amro is widely seen as making the bank more vulnerable to the credit crunch and having to be bailed out. |
| Huge 'failure' | Huge 'failure' |
| Mr Darling told the BBC: "At my request, my ministerial colleague, Lord Myners, spoke to Sir Fred [on Wednesday] and put it to him quite simply: look, in the circumstances in which this bank is now in, do you not think it right that you should forgo this? " | Mr Darling told the BBC: "At my request, my ministerial colleague, Lord Myners, spoke to Sir Fred [on Wednesday] and put it to him quite simply: look, in the circumstances in which this bank is now in, do you not think it right that you should forgo this? " |
| The chancellor said the government had not yet received a reply to the request. | The chancellor said the government had not yet received a reply to the request. |
| "Obviously we will look at what we can do in relation to legal remedies, but I do think that, it's not just this case, but you cannot justify these excesses - especially when you've got such a failure of this magnitude. " | "Obviously we will look at what we can do in relation to legal remedies, but I do think that, it's not just this case, but you cannot justify these excesses - especially when you've got such a failure of this magnitude. " |
| Treasury Minister Stephen Timms had said earlier that UK Financial Investments, which manages the government's shareholding, had been working with the new RBS chairman and board with a view to "clawing back" some of the pension. | Treasury Minister Stephen Timms had said earlier that UK Financial Investments, which manages the government's shareholding, had been working with the new RBS chairman and board with a view to "clawing back" some of the pension. |
| For its part, the City watchdog, the Financial Services Authority (FSA), published a new draft code on remuneration policies on Wednesday, saying that firms should make sure their policies did not expose them to excessive risk. | |
| 'Eye-watering' pension | |
| Politicians have reacted angrily to the news of Sir Fred's pension. The chairman of the Treasury select committee, John McFall, said: "I think it is a scandal. He is leaving not with a good pension, but one that is eye-watering." | |
| Sir Fred Goodwin's pension draws an angry response from two Treasury Committee members | Sir Fred Goodwin's pension draws an angry response from two Treasury Committee members |
| John Park, Labour member of the Scottish Parliament for Mid Scotland and Fife, said: "It is morally wrong for Sir Fred Goodwin to receive such a huge pension when so many workers at RBS are facing redundancy. | |
| "At the very least, it should be stopped and any pension payments frozen until he reaches normal retirement age." | "At the very least, it should be stopped and any pension payments frozen until he reaches normal retirement age." |
| Michael Fallon, a Conservative MP on the Treasury Committee, said the government should not have allowed the payments to go ahead in the first place. | Michael Fallon, a Conservative MP on the Treasury Committee, said the government should not have allowed the payments to go ahead in the first place. |
| "Ministers must have known this when they took over the bank back in October," he said. | "Ministers must have known this when they took over the bank back in October," he said. |
| The disclosure that he's set up very nicely for life will spark some controversy Robert Peston, BBC business editor Read Robert Peston's blogRBS reports record corporate loss | The disclosure that he's set up very nicely for life will spark some controversy Robert Peston, BBC business editor Read Robert Peston's blogRBS reports record corporate loss |
| "They must have known what his pension arrangements were. They have had since October to get this sorted out. That pension should have been stopped. | "They must have known what his pension arrangements were. They have had since October to get this sorted out. That pension should have been stopped. |
| When giving evidence to the Treasury Committee on 10 February, Sir Fred said: "My pension is the same as everyone else in the bank who is in a defined benefit pension scheme. It is determined in the same way as anyone else." | When giving evidence to the Treasury Committee on 10 February, Sir Fred said: "My pension is the same as everyone else in the bank who is in a defined benefit pension scheme. It is determined in the same way as anyone else." |
| But few other employees of RBS are understood to be able to draw their pension at the age of 50, although BBC business editor Robert Peston says that his entitlement to a pension at 50 if he was asked to leave the bank, was put in place some years ago and was applied to other directors. | But few other employees of RBS are understood to be able to draw their pension at the age of 50, although BBC business editor Robert Peston says that his entitlement to a pension at 50 if he was asked to leave the bank, was put in place some years ago and was applied to other directors. |
| RBS also issued a statement, saying: "The company is taking further legal advice in respect of certain aspects of Sir Fred Goodwin's contractual arrangements and continues to discuss the position with UKFI." | RBS also issued a statement, saying: "The company is taking further legal advice in respect of certain aspects of Sir Fred Goodwin's contractual arrangements and continues to discuss the position with UKFI." |