Harriet Harman has joined the attack on Sir Fred Goodwin's £650,000-a-year pension, declaring that payments to the former RBS chairman are "not going to happen".
The deputy Labour leader appeared to hint that the law could be changed to recoup some of the money from Sir Fred's early retirement package. Ms 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 a year better off as a result of this because it is not going to happen."
But senior government sources said that there were no plans to legislate to recover the banker's money, as lawyers were still poring over details of the pension package to determine whether there is scope for legal action.
Margaret Beckett, the Housing minister, 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. It is no good now trying to distract everyone's attention with this synthetic anger. They had their chance to stop it and they incompetently failed to do so."
The Liberal Democrats' Treasury spokesman, Vince Cable, said the Government should present Sir Fred with an ultimatum: accept £27,000 a year or sue for the rest. "It seems to me 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 a year. If he feels that's inadequate he can sue," Mr Cable said.Reuse content