PM seeks legal help over Sir Fred pension row

The government is upping the ante against ex RBS chief Sir Fred Goodwin bumper pension, with prime minister Gordon Brown confirming that the Treasury was seeking legal advice.

‘This is unacceptable and we are going to clean up the banks so it doesn’t happen again...We are seeking legal advice and seeing which legal avenues we can pursue,’ the PM said.

His comments come after Goodwin last night refused to give up his £693,000 a year pension in an exchange of letters with Treasury minister Lord Myners who was quick to slap down the decision as ‘unfortunate and unacceptable’.

Goodwin’s refusal to forgo the payout made the front pages of many national newspapers this morning, overshadowing RBS’s record UK corporate loss and move further into the clutches of the government.

The furore over the scale of Goodwin’s pension kicked off yesterday morning when chancellor Alistair Darling  and said the Treasury was talking to Goodwin. Later on in the day, prime minister Gordon Brown intervened, arguing no one should be rewarded so much money at a time when the bank itself is making , while hinting that legal action may be taken.

Goodwin then sent his letter to Myners in which he outlined the sacrifices he had made after leading RBS to such huge losses, including a voluntary waiving of his 12 month notice period and the salary that came with it.

Goodwin said that Myners had previously indicated that he was aware of the scale of his pension ‘and that no further "gestures" would be required’.

‘Like you, I believed that these gestures were appropriate in the circumstances, and sufficient, and revisiting the position today, I believe that they remain so.

'I accept responsibility for that which I was responsible for, and recognise that my actions must be consistent with this. I believe that they have been, and to voluntarily accept a reduction in a pension entitlement which has been built up over many years and in other employments in addition to RBS, is not warranted.’

Myners retorted in his own letter that for Goodwin to forfeit his pension ‘would be an appropriate recognition of the failings of RBS under your tenure and the subsequent support the government has provided’.

'I hope that on reflection you will now share my clear view that the losses reported today by the bank which you ran until October cannot justify such a huge reward,' Myners wrote.