RBS 'should have had to fire Sir Fred' before being bailed out

Published on Thursday 14 May 2009 19:09

THE UK government should have insisted that Royal Bank of Scotland sack Sir Fred Goodwin before agreeing to its £20 billion bail-out, a report from MPs says today.

This would have cut the pension of the disgraced former chief executive from 703,000 to 416,000 a year and saved more than 11 million, assuming Sir Fred lives until he is 80.

The report, from the Treasury select committee, also suggests the public apologies made by Sir Fred and other senior figures at RBS and Halifax Bank of Scotland for the near-collapse of their banks were insincere.

It notes their expressions of regret had a "polished and practised air", while the bankers "betrayed a degree of self-pity" and portrayed themselves as unlucky victims of circumstances.

The report heaps further pressure on Lord Myners, the minister who oversaw Sir Fred's departure. It criticises him for allowing the RBS board to handle the terms of his departure itself, noting that this was the same board that had been "incompetent" in managing RBS.

Glen Moreno, then acting chairman of UKFI, the body that controls the government's stake in the part-nationalised banks, told the committee that, on occasions, bank boards were right to sack individuals.

The report states: "We think in this case that should have been the response of RBS and that the Treasury should have insisted on this as a condition of support."

John McFall, the Labour committee chairman, said it was "impossible to resist" laying the blame for the banking crisis at the door of executives.

Liberal Democrat MP Lord Thurso, a committee member, said: "We feel had (Lord Myners] been a more experienced minister, he would have looked more closely into the detail."