British Govt May Fail To Block Banker Big Pension

Harriet Harman, the Labour Party`s deputy leader, has described Goodwin`s pension as unacceptable and vowed: `It`s not going to happen.`

The British government has courted public support by trying to stop the former head of a bank it rescued receiving his nearly $1-million annual pension, but legal experts say its efforts are likely to fail.

Fred Goodwin has said he will not give up his 693,000-pound pension after leaving the Royal Bank of Scotland last October when the Labour government bailed it out.

Goodwin has become the focus of public anger over rewards for failed bankers since RBS last week reported a loss of 24.1 billion pounds in 2008, the largest in British corporate history.

The scale of benefits also raises questions about how the government managed the 20-billion pound rescue of RBS at the height of the banking crisis.

Harriet Harman, the Labour Party's deputy leader, has described Goodwin's pension as unacceptable and vowed: "It's not going to happen."

But Goodwin, 50, known as "Fred the Shred" for his cost-cutting, is likely to hang on to the benefits that are owed to him, employment lawyers said.

"On what has been reported, I haven't seen anything to suggest that there is any easy or likely legal route to recovery," said barrister Christopher Nugee, a pensions expert at Wilberforce Chambers in London.

"You start from the position that once you have become entitled to a pension under the rules of a pension scheme it is an accrued right and you can't take it away."

Harman said lawyers were studying Goodwin's contract to find a way to block the payments. Newspapers have reported that the government, which has a 70 percent stake in RBS, could pass a new law in parliament to force Goodwin to give up his pension.

This would breach the European Convention on Human Rights and could land the government in European courts, Nugee said.

John Curtice, professor of politics at Strathclyde University, said Harman's comments could backfire.

"Attacking the bankers has a clear populist ring," he said. "But if you are going to go down this road, you need to be able to make sure that you can actually do something about it.

Britain has been hit hard by the global financial crisis. Its economy shrank by 1.5 percent in the last three months of 2008 and unemployment is almost 2 million.

The government trails the opposition Conservatives in opinion polls and an election is due by the middle of next year.

Conservative finance spokesman Philip Hammond has accused ministers of "throwing up clouds of smoke" to hide the fact they should have blocked the pension during last October's rescue.