Cable quizzes Harman (Twickenham & Richmond Liberal Democrats)

Cable quizzes Harman

March 5, 2009 10:45 AM

cable • [Mar 04]: ' . . WOULD it not be more sensible for the Government to use existing legislation under which pensions can be forfeited in cases of employee negligence, which is surely the case with Sir Fred Goodwin, . . '

Dr. Vincent Cable (Twickenham) (LD): May I add my condolences to the families of Marine Laski, Rifleman Gunn, Lance Corporal Upton and Corporal Gaden, who all died serving their country on 25 February; and also to the victims of the Sri Lankan atrocity.

As the Leader of the House is a former pensions Minister and Law Officer and, I believe, a trained solicitor, she is exceptionally well placed to understand pensions law. Instead of the rather eccentric proposal for a "Harriet's law" to stop Sir Fred Goodwin's pension, would it not be more sensible for the Government to use existing legislation under which pensions can be forfeited in cases of employee negligence, which is surely the case with Sir Fred Goodwin, Adam Applegarth of Northern Rock and the others who bankrupted their banks?

Ms Harman: Perhaps I can update the House on this matter. The Government have asked United Kingdom Financial Investments to investigate all the circumstances surrounding the contract for Sir Fred Goodwin's pension, including the extent to which it was discretionary and including whether or not the people who took the decision had all the facts on which they could take it. That, too, bears on the enforceability of the contract. We are absolutely clear that it is not acceptable and we are taking all steps to challenge the enforceability of the contract.

• Dr. Cable: I think that the right hon. and learned Lady is missing the point. The issue is not whether the pension is £400,000 or £700,000; the issue is why it is being paid at all. Is this not part of a much bigger issue? There is growing anger in what she calls the court of public opinion not just about the pension and remuneration of those who are now public sector employees, but about other public sector fat cats, including senior civil servants and, dare I say it, Ministers, and their very lavish and generous pensions. Does she recognise that anger, and what is she proposing to do about it?

Ms Harman: I think that we do recognise that concern. In particular, there is concern about the question of remuneration in the financial services industry because it has been part of encouraging short-termism and risk-taking. As well as looking at the contractual basis of Sir Fred's pension, we have also asked the Financial Services Authority and the Walker commission to look at how we tackle and improve the remuneration regime as part of corporate governance.

Richmond upon Thames Liberal Democrats: