The Tories seem intent on pursuing Lord Myners, the City minister, out of office over what he did or didn't know about Sir Fred Goodwin's pension arrangements. They are wrong and do themselves no credit.As I have said before, it is a really tough call to expect government ministers over that cataclysmic weekend of 12-13 October to have set aside time to scrutinise the details of the severance package offered to Goodwin. Had they done so and spotted that the RBS board was pulling a fast one by enhancing his severance package (I'll return to that point later) but allowed the crisis gripping the banking system to spread even further we would have had genuine cause for complaint.
If I was Lord Myners I would now be wondering what some of my Treasury officials were up not to flag up some serious concerns over the Goodwin deal and perhaps I might have wondered at the time why it was being dressed up as early retirement for someone only in his early 50s. The fact that he was alerted to the possible size of the pensions pot is not really that important as there would have been so many multi-million and multi-billion pound numbers being thrown around that weekend you can understand why this one didn't make an impression. It would be nice to think that Lord Myners would have had a moment to pause to reflect on the RBS board's proposal and say to them that it should wait a couple of days as it needed further thought but we do not live in an ideal world.
I think the Tories have been duped by the RBS and Sir Tom McKillop's letter yesterday into thinking that they now have an easy target in Lord Myners. The real target remains the RBS board and its remuneration committee. It is at the very least disingenuous to claim that there was no enhancement to the deal offered to Goodwin. They didn't have to offer him early retirement: indeed, there is no real reason why it should have been viewed as any sort of retirement. Goodwin's incompetence at the helm of RBS had steered it to disaster. Most chief executives in that situation get offered a paid up contract, possibly with a little boost to their pension fund alongside and often this appears too generous a reward for failure. That should have been the starting point for getting rid of Goodwin and why it wasn't should be the question politicians should pursue.
We have a culture of rewarding senior executives for failure in this country and we need to challenge that if we are to re-build industry and the financial services sector out of the havoc of the current economic storms. Sadly, it seems that the Tories, who now view themselves increasingly as a government-in-waiting, have no appetite for doing that.
