Thursday, February 26, 2009

Iain Dale: the state should not be bound by law

Iain Dale seems to have lost his tiny mind today...
What kind of mindset leads to someone authorising an annual pension of £650,000 for a man who has presided over one of the biggest banking failures in British history? And what does it say about Sir Fred Goodwin that he accepted such an outrageous pension? The answer is simple in both cases. It demonstrates that those who led RBS to the brink of failure have learned little from the experience and believe that it's business as usual.

Oh for fuck's sake... Where to start?

First, the pension agreement will have been made previous to the fuck-up, so it's hardly as though RBS haven't learned: it is simply that they respect the law of contract.

It may not have been a very good contract, but the business has to stick to it. Because, you see, that's the way that the law works.

As Timmy says...
Pensions are deferred compensation. This is part of the contract that he signed all those years ago.

It may not have been a very good contract, it might be that we or you or even they wish it had not been signed in the form it was, but it is indeed a contract.

And tearing up contracts, abandoning the rule of law, is really not an action or activity that is going to help us in the future.

Let us imagine that I was an investor in... ooh... let's say, an internet TV station. And let's say that I had agreed to pay Iain a salary of £50,000. OK? Then let's imagine that lots of people had fucked up (not least in failing to realise a revenue stream) and that, having poured a lot of money into the project, I had decided to close it.

Would Iain think it fair that I demand £40,000 of his salary back? Iain might argue that this wasn't in the contract, that his payment was a salary and not performance-related and that, under the terms of the contract, I had no right to demand its repayment.

What should I then do?
Sir Fred Goodwin should be shamed into renouncing this pension, and if he has no shame, then Parliament should act to take it away from him.

Translation: if Goodwin does not act in a way that accords with Iain's personal sympathies, then the state should simply over-turn the law. Essentially, Iain's personal morals should take precedence over contract law.

I have lost a good chunk of money in RBS shares—that is entirely my fault. Whilst I am very flattered that Iain wishes to fight for my honour, personally I am not so stupid as to advocate that we overturn some basic laws so that I can get revenge.

Still, it is nice to see that Iain agrees with Gordon Brown and his badger-faced sock-puppet...
Chancellor Alistair Darling urged failed banking boss Sir Fred Goodwin to give up his £650,000 pension today – threatening legal action if he fails to act voluntarily to end the controversy.

It is, after all, instructive to see how skin-deep the Tories' idea of liberty is, and what little difference there really is between the two main political parties.

And it is a very neat illustration of why personal morals should never be allowed to be involved in the making (or breaking) of laws.

So, grow up, Iain, and try to see the wider picture.

UPDATE: fair play to Iain for publishing an amendment.
I suspect I should have allowed my head to write that blogpost, rather than my heart.

I should make it clear—although fuck knows that I shouldn't need to—that I find The Shred's pension arrangements deeply fucking irritating—especially when his fuck-ups have deprived me of thousands of pounds. However, you cannot tear down the law on a whim, as that oft-quoted passage from A Man For All Seasons so eloquently states.
"What would you do? Cut a great road through the law to get after the Devil? ... And when the law was down, and the Devil turned round on you—where would you hide, Roper, the laws all being flat?

This country is planted thick with laws from coast to coast, Man's laws, not God's, and if you cut them down—and you're just the man to do it—do you really think you could stand upright in the winds that would blow then? Yes, I give the Devil benefit of law, for my own safety's sake!"

And the government in question is NuLabour: these fuckers do not need any encouragement to flatten the laws that protect us. For fuck's sake, don't give them any rope, for they won't hang themselves with it—they will hang us...

UPDATE 2: oh, Iain, you shouldn't have (yes, your humble Devil is a vain man and flattery will get you everywhere).

And I'm sure that my alma mater will be simply thrilled to have such a distinguished ambassador. Ahem...

39 comments:

an ex-apprentice said...

Shred's pension, in the context of a taxpayer commitment to the bastard banks, thus far, of £1.3 trillion, is totally fucking irrelevant.

Yet he, and not the wider ishoos surrounding this new form of national hari-kari, dominated the news broadcasts tonite.

Job done then.

But I agree with you re: Mr Dale's comment.

Guthrum said...

I am damn sure that Brown is going to part with his pension why should Goodwin.

Dr John Crippen said...

Yes, spot on DK.

He should get the money. The law of contract should be honoured. Mind you, if it were decided that his in post behviour was so incompetent as to be in breach of contract, then maybe he could be sued.

Ignoring the law of contract seems to be all the rage these days. Rose Gibb was demonised for MRSA, sacked and then defrauded of compensation to which she was entitled.

http://nhsblogdoc.blogspot.com/2009/01/another-load-of-crap-redux.html

Similarly, and worse, was the case of Sharon Shoesmith, publically crucified for the death of Baby P. THE soar away sizzling SUN was after her pension immediately:

http://www.thesun.co.uk/sol/homepage/news/article1998090.ece

and ignored the lifetime of work and service she had put in. See the real story here:

http://www.guardian.co.uk/society/2009/feb/06/sharon-shoesmith-haringey-interview


If we start to dismantle the law of England, we are all done for.



John

Dick the Prick said...

Yeah, just gone tabloid.

Idle Pen Pusher said...

I do think it's a bit unseemly how much he is getting. But DK is right.

If he had taken a private pension instead, rather than with the company's own pension fund, should he have to give up that too? If not, what's the difference?

Idle Pen Pusher

Curmudgeon said...

I'm glad someone's stuck up for Sir Fred's right to his pension.

As usual DK says the unsayable.

Well done.

Anonymous said...

As a level of remuneration and pension entitlement I find Sir Fred's allocation utterly abhorrent.

However, this entitlement was agreed as part of his agreement to fore go his contractual entitlement to 12 months notice, share option entitlement and severance consideration. It is utterly proven that cabinet were informed of the remuneration agreed, it is utterly proven that cabinet agreed to above payment and Sir Fred is both morally, and legally entitled to tell PM Brown, and Chancellor Darling to go fucking swivel when they ask for the money back.

As much as I dislike the cunt, and as much as I hope Goodwin is found swinging from a short rope in a tall room for his idiotic decisions, especially the ANB AMRO takeover which he was told was a fucking idiotic decision of epic proportions I fully support his right to tell the fuckwits that did not perform their due diligence to go sit on a sharp stick and spin.

Lord Myner was absolutely and fully aware of Sir Fred's package, if he failed to convey this to either Darling or Brown then he was a fucking incompetent that should not have been appointed to act on the governments behalf in the first place, and that mistake is cabinet level an no one elses. If Myner was competent, then there can be absolutely no shadow of doubt that Darling and Brown were aware of the package AT THE FUCKING TIME.

For the flatulent badger puppet chancellor to turn around and ask for Goodwin to return the money tells us that government have not got a fucking legal leg to stand on. For that slack-jawed monocular cuntflap of a PM to stand up and try and say he had no knowledge even though he proposed Goodwin for knighthood, had no knowledge even though he made it pubically known he was taking very personal interest in negotiating the RBS deal, for this lying shit-on-a-stick to try and distance himself from this despite his fucking fiscally diseased fingerprints being all over the useless fucking agreement is quite frankly astounding.

fatandbaldandmadashell said...

Thank fuck there is someone else in this shitty fucked-up World that thinks like me...

I salute you.

PS Goodwin is still a fucking incompetent twat without foresight or prudence (but you knew that anyway...)

Diogenes said...

According to SKY news .... This pension scheme was not a contractual obligation, but was agreed by the government after the RBS collapse because they were in a hurry and didn't notice that it wasn't a contractual requirement.

Which does rather change things.

Fred Z said...

A deal is a deal is a fucking deal and the entire force of the state up to and including nukes and the SAS need to be deployed to enforce it.

That's the only reason I submit to the tyranny of the state and pay my taxes. Well, most of them anyway, barring a few dodgy entertainment 'expenses'.

Fred Z said...

Diogenes, you idiot, "This pension scheme was not a contractual obligation, but was agreed by the government ..."

What do you think a government 'agreement' is but a contract?

Some excuse: "Fuck him, he had an agreement, not a contract".

subrosa said...

It's Gordy and his bestest pals who cocked this up. Anway Fred is keeping his pension. After all a man needs a new yacht every couple of years.

assegai mike said...

There is a wonderful summary of all this at the ever-reliable Daily Mash, here:

http://www.thedailymash.co.uk/politics/politics-headlines/brown-refuses-to-hand-back-pension-200902271606/

haddock said...

If RBS were allowed to sink without trace and without any taxpayers money, just how would his pension be paid ? who would pay it ?

Henry Crun said...
This comment has been removed by the author.
Ordinary Joe said...

I'm with Dale here. Goodwin has failed on a massive scale and the twat can not just sail off into the sunset. Let's get the MPs who failed next too....

Henry Crun said...

As obscene an amount Goodwin's pension seems, the faux outrage is merely a smokescreen to cover Gordon's arse. He is the instigator oof the banking crisis and slowly but oh so surely, the chickens are taking their places on the perches.

The govt has threatened legal action and I have no dount that Goodwin will fight it tooth and nail. All this will do is drag it on for ever and a day keeping the briefs' own pension plans nicely topped up.

In response to Haddock above, pension funds are run as separate entities from most organisations (even though some companies will "loan" money from their pension funds from time too time - usually until there's fuck all left). If RBS did go tits up, contributions to the fund would cease and benefits would be paid out commensurate with what is in the pot. So Fred's pension should be reduced. I say should, but it all depends what is in the contract - it could well be protected against such an eventuality as the company going under.

I have no doubt that someone within RBS did sound the alarm and point it out but was merely patted on the head and told to sit in the corner and not make any more noise.

Anonymous said...

The more I think about this, politically it shows why libertarians won't be influential in Britain. You are effectively using contract law to defend a corrupt system. It is too blunt a response for this situation.
It would be better to say that within this corrupt system, where profit is privatised and losses are socialised, Fred's pension is legal. But the whole system is immoral and corrupt, and should be overthrown.

Neal Asher said...

Just as Guthrum pointed out: after he's finished scorching the Earth of Britain, after 12 year of utter financial incompetence, will Brown give up his pension? Will all those ideologues in the Labour party, having thoroughly fucked over this country, forgo their pensions?

Lord T said...

I think that Gordos and Darlings plan is working fine. We are all demonising Godwin for falling into the same trap all the bankers did by following the rules. He made a mistake, just as I did with RBS shares, all within the law and due to the scale he has decided to make a token recompense to placate the wolves. Yet public opinion decided it wasn't enough and thus a second stage was proposed, his pension.

In the meantime the people who wrote the rules (IMO specifically to allow this to happen, although obviously not the big fall) walk away scot free and have successfully blamed a third party.

So Godwin made one big mistake and is expected to give up his pension and all his compensation yet someone (can't think who atm It will come to me) has screwed up an entire country in ten short years and yet I don't here people calling for his head, pension and salary in the papers.

When will we learn?

The Penguin said...

"Man For All Seaons" after all these years still right on the money on so many issues that are still relevant.

Who can rein in an over-mighty and corrupt executive?

The Penguin

Anonymous said...

In a libertarian country the bank would have folded. There would have been no social losses, only financial ones for individuals.

Of those people calling for him not to receive his pension, how many of you have fucked up at work? Would you give up your pension because of it? The scale of the fuck-up is irrelevant.

mister_choos

Lola said...

Haddock - don't comment on things you clearly do not understand. The employees pension fund is ring fenced from the company's creditors. RBS could (should have?) gone belly up and the pension fund would still exist. If it was in deficit, I and my colleagues in financial services and the other solvent schemes would have been taxed by government to make up the shortfall. (I do realise that all taxing us does is to make us ask our customers for more money, so in fact all these compo schemes do is pass the buck around from one set of taxpayers to another). Pensions are deferred pay. End of. You give up pay and the gummint does not tax it until you draw it. Well that was the case until the fucking Scots idiot taxed pension funds. Fred's pension was built up from employments before and during his tenure at RBS. Contributions were made by private companies to a private pension scheme when RBS was (apparently) trading profitably. It's RBS's and Freds money in Fred's pot. It is not tax payers money. But, it seems that the fuckwit Myers may have agreed to a one off uplift payment to Fred's pot when he, Fred, agreed to fuck off. If so that is entirely Myers fault, and as he must have told Brown and the Badger, theirs as well. All this is contractual and as others have said you just cannot go about overturning contracts on a whim, otherwise the rule of law would go and we would end up in a totalitarian state.

Oh yes, of course, silly me.......

PS You have n o idea of the complexities of actually surrendering the pension. There would have to be a calculation of the CETV. Then the money would have ot be taken from the scheme and paid to the company. You would also have to work out what proportion was due to Fred's own contributions as opposed to RBS contributions. In each case the rebate would be subject to a tax charge, probably by treating it as a trading receipt in regards to RBS but just a simple tax levy at 40% on Fred's bit. Even if this was all actioned I am not at all sure that the current pensions law provides for this, so that new law would have to be made. Of course once you've done that you can bet your bottom dollar that Zanu would frame such law as widely as possible to enable them to make similar arbitrary recoveries in the future and all of us would be vulnerable to such claims.

curly15 said...

So long as we are pretty clear the Sir Fred is pretty blameless for his severance package, but has plenty to bear for the state of RBS balance sheet.

Others are hiding in the shadows unable to hold their hands up.

Diogenes said...

Fred Z

Regrettably you are tilting at windmills.

"What do you think a government 'agreement' is but a contract?"

Did I say that the agreement should not be honoured.....did I...anywhere?

No, I did not.

DK said:-
"First, the pension agreement will have been made previous to the fuck-up, so it's hardly as though RBS haven't learned: it is simply that they respect the law of contract."

My point was that the government negotiated this pension, in their ignorance, AFTER the collapse of the bank. In the full knowledge that they were giving this money to the man most responsible for the state of RBS.

So any argument about whether his contract can be reneged upon after the banking crisis made everyone reassess its value is null and void.

haddock said...

Lola,
I wasn't commenting on things I don't understand.... I asked a fucking question just because I didn't understand, fuckwit.... that's why I put those curly symbols at the end of each sentence.... geddit ?

or is that too fucking complex for you to get your head around ?

Dr John Crippen said...

the only reason people are steamed up about the pension is that it is a sum of money small enough (in modern banking terms) for us all to understand.

It's a drop in the ocean compared to the £28 Gazillion Gazillion that the tax payer is going to be asked for to bail out the sodding bank. But no one really knows what a gazillion is, so they lose interest


John

sconzey said...

Indeed the contract must be respected. If we want to deprive the Shred of his pension then he must be found to be in breach of the contract.

The argument that he wouldn't get his pension if the bank had gone bust is one of the best arguments against the bail-out. Caveat motherfucking emptor.

jeremy said...

Sir Fred needs to know public opprobrium over his pension, but I'm not much exercised over it. Let's face it, top business persons in UK haven't received pay packages that relate to actual performance for many years. 'Bonus' payments are virtually guaranteed. And severance pay and
pension arangements are even more important than actual pay. Chief executives and top directors do not expect to remain in one position for long. There is a smallish circle of top executives who set their own pay packages in relation to each other and to the next position that any one of them may occupy. Sir Fred is being unjustly greedy but he's also holding the ring for all the other top executives within this circle who fear the public's change of mood over top pay.

Anonymous said...

Don't forget that despite his fine rhetoric,Sir Thomas More still got his head cut off....

Anonymous said...

I hope you lot bear this all in mind when the axes are sharpened for civil service final salary pensions - although perhaps the law of contract doesn't apply to them?

Devil's Kitchen said...

Anon,

"I hope you lot bear this all in mind when the axes are sharpened for civil service final salary pensions - although perhaps the law of contract doesn't apply to them?"

A good point, of course.

The obvious solution is to close the civil servant pension scheme to all new employees. Now.

DK

FlipC said...

From other reports another viewpoint was that Treasury officials negotiated the early retirement under the impression that the pension was a mandatory part of the contract when it was in fact discretionary. Their current attitude thus seems to boil down to - "If we'd bothered to do our jobs and check the contract first we'd have found we didn't need to give you that pension; now that we have we want the money back".

Um no.

Anonymous said...

Law of contract, yeh, sure!

How about agreeing he should have 'is pension according to the contract and also prosecuting the cunt for not following due diligence when he bought ABN Amro?

( there was a very long time delay between it being done and him buying it which rendered the original DD out of date)

David Gillies said...

An Act of Parliament aimed at punishing a single individual is known as a Bill of Attainder and is one of the bigger no-nos in a modern Parliamentary democracy. In fact they're specifically outlawed for Federal and State government in Article I of the US Constitution due to their association with monarchical prerogative. There hasn't been one passed in the UK since 1798. Iain might want to ponder why this is so.

DaveA said...

Let me first get my conflicts of interests out the way. In my job as an IT recruitment chappy I did business with RBS/NatWest for 13 years. Uncle Sir Fred paid part of my mortgage, beer and fags funds. However it did give me an insight into what a talented man he was. For example the branch network RBS had before the NatWest takeover was a third of NatWest's. This was the classic leveraged buy out.

He saw RBS become the 5th largest bank in the world by market capitalisation. The thing he lacked was an investment bank. Deutsche Bank was on the tip of everyone's tongue a few years ago. Alas ABN Amro was second prize. I am just sorry for everyone he could not deliver the ultimate financial institution.

Yes, I agree with Iain and DK that it is a large number he has received which upsets people quite rightly. But at least Uncle Sir Fred brought the raffle ticket, if not winning the bottle of scotch.

Anonymous said...

they have got it just about right here:
http://www.thedailymash.co.uk/politics/politics-headlines/brown-refuses-to-hand-back-pension-200902271606/

Savonarola said...

This faux outrage by Brown and co, manufactured and stoked by them, serves two purposes:

To deflect attention from Govt's role in the collapse of the banking system partly because FSA, Brown's creation, not fit for purpose. Turner's remarks to SS, confirming Brown's instruction to FSA to apply a light touch, drowned out by Fred's pension plan.

Second to divert attention from Mtners' incompetence from not doing the simplest of checks on Goodwin's termination arrangements. Brown will back off in a couple of months citing 'legal advice' and in the meantime Turner's evidence will be forgotten.

Anonymous said...

So the lesson bankers will learn from this is:

You can run a bank into the ground to the point where it's on the verge of financial collapse, demand taxpayers' money to bail you out, and then retire with a fat pension which pays you more every year than the average person earns in their lifetime, all paid for by the taxpayer.

Wow, that's really going to 'encourage the others', isn't it?

It's really very simple: RBS could pay what the hell they wanted so long as they were a private company. Now they've been saved from bankruptcy by a fat wad of taxpayers' cash, they're sleeping with an 800 pound gorilla; they can hardly complain when they wake up in the morning and find their face ripped off.

Remember: without the taxpayer, this bank would be bust and his pension would be precisely zero. Stealing money at gunpoint from some poor sod working in Starbucks to fund the fat pension of a banker who drove his company into the ground is obscene.

Far from supporting this loser, libertarians should be demanding an end to bank bailouts and bankruptcy for those banks who can't survive without taxpayers' money. Bailing out banks with taxpayers' money is about as far from libertarianism as you can get absent the state taking direct control.