Sir Fred Goodwin, ex-boss of Royal Bank of Scotland, who was in charge when the bank lost billions, was granted a pension worth £16 million.
As of a few days ago the bank, under its new majority shareholder the British Government, was contemplating hiring a leading firm of lawyers to look into the legality of Sir Fred’s pension.
Well here is an alternative suggestion. And it has precedent.
The background is that during the Second World War the British army blew up the oil fields belonging to Burma Oil. It did it in order to prevent the fields coming under Japanese control.
After the war, Burma Oil argued that because the fields were not in a ‘theatre of war’ at the time they were blown up, they were not covered by the Act that said that if the army destroyed things they didn’t have to compensate the owners.
And Burma Oil were right, and it looked as though the British taxpayer was going to have to compensate the company. The sums involved were astronomic. So the government put through a piece of legislation in record time that absolved them from the kind of damage it had caused.
That wouldn’t have been enough to get them off the hook though, because the damage occurred before the legislation was introduced. So the Act declared itself retrospective.
And the British Parliament could do the same today and introduce a law that prevents huge pensions going to the bosses who bring about State control of their banks on account of their huge professional failures.