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Sunday, 1 March 2009

Freddie and the Dreamers

“No payment for failure.” intoned Gordon Brown in his best Presbyterian pulpit voice. Unfortunately, at the time he was speaking, the Royal Bank of Scotland was tying up an exit deal for Sir Freddie Goodwin worth some £16 million or nearly £700k a year for life. Such is the price of failure.

In recent days the clamour for Sir Freddie to give back some of that “largesse” has grown more shrill. “How can someone who has overseen the largest corporate loss in UK history get such a huge pension – and get it mind you from the age of 50? It’s immoral, it’s obscene.” That is the general complaint. “And at a time when thousands are losing their jobs, homes and futures!” On the face of it it’s a no brainer; this man is getting away with blue murder.

But a pension is deferred pay; deferred until it comes into payment once you’ve retired. You’re as much entitled to your pension as you are to the pay you receive for work done. We all appreciate that don’t we? No one is talking about asking Sir Freddie to give back the salary he earned – or are they? If a pension is deferred pay that’s exactly what Gordon Brown is doing. That’s a pretty bad precedent isn’t it?

Anyway talking about precedents, we British are admired throughout the world for our unflinching ability to reward conspicuous failure. How else do you explain the mega bucks paid to the England football team managers over the years? The payments get bigger and bigger as does the failure to lift a single trophy since 1966. Or the parachute payments to teams relegated from the Premier Division. If that’s not payment for failure what is?

I see little difference between what has happened to RBS and to the UK. If Gordon Brown can blame our nation’s current woes not on his (mis)management of the economy but on global factors, why can’t Sir Freddie do the same? And if you think our Prime Minister would listen to calls for him to fall on his own sword as the price for failure – you must be dreaming.

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