Hint at law change over pension pay-out

The deputy leader of Britain's Labour Party, Harriet Harman has re-opened a row over the 650,000 pound ($187,000) pension of the former boss of a bailed-out bank, declafing as she declared the payments are "not going to happen".

She made the Government's strongest attack yet on former Royal Bank of Scotland chairman Sir Fred Goodwin's early-retirement package, appearing to hint that the law could be changed to recoup some of the money.

Harman said: "The Prime Minister has said it is not acceptable and therefore it will not be accepted. It might be enforceable in a court of law, this contract, but it's not enforceable in the court of public opinion and that's where the Government steps in."

She told the BBC: "Sir Fred should not be counting on being 650,000 pound a year better off as a result of this because it is not going to happen."

Blamed for leading RBS to near collapse and a taxpayer bail-out, Goodwin has resisted demands he give up the package which he insists was approved by ministers.

But senior Government sources said that there were no plans to legislate to recover the banker's money. Housing Minister Margaret Beckett warned against "reading too much into what Harriet said".

George Osborne, the Shadow Chancellor, told BBC1's Politics Show: "I will support any legal measure to try to get this pension back. But this is a bit like trying to bolt the stable door after the horse has itself bolted."

Liberal Democrat Treasury spokesman Vince Cable said the Government should present Sir Fred an ultimatum: accept 27,000 pound a year or sue for the rest.

"The Government would be on strong ground to tell him he is entitled to pension payments available to employees of bankrupt companies under the Pension Protection Fund, which have a maximum of 27,000 pound a year. If he feels that's inadequate he can sue."

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