Page last updated at 14:40 GMT, Thursday, 26 February 2009

RBS pension deal 'not justified'

Alex Salmond
Alex Salmond was speaking at first minister's questions

The size of former RBS chief Sir Fred Goodwin's pension is not justified, Scottish First Minister Alex Salmond has told Holyrood.

Sir Fred is entitled to draw 650,000 a year under his early retirement deal.

Mr Salmond's comments, during question time in parliament, were echoed by opposition party leaders.

The exchanges came on the day that RBS, which is headquartered in Edinburgh, announced the largest annual loss in UK corporate history.

The bank, which had to be bailed out by the UK Government last year, said its 2008 loss totalled 24.1bn.

At Holyrood, Scottish Labour leader Iain Gray said Sir Fred's pay-out was surely not morally acceptable, asking: "Does the first minister think that is right?"

Mr Salmond replied: "No, I don't - and I don't think the small shareholders and the customers of the bank, and the general public, will think it's appropriate either."

I don't think the pension arrangements can be justified
Alex Salmond
First Minister

Scottish Lib Dem leader Tavish Scott also hit out at the size of the pension, telling MSPs: "That's 140 times the size of a normal state pension.

"On the day RBS announced that thousands of Scottish jobs earning a fraction of that money are at risk, on the day when RBS post the worst losses in corporate history, on the day when billions more taxpayers' money is bailing out his mistakes, does the first minister think Fred Goodwin should touch a penny of that pension?"

Mr Salmond responded: "I don't think the pension arrangements can be justified. I think that will be a generally held view."

Chancellor Alistair Darling has admitted the government could have stopped Sir Fred from receiving the 650,000-a-year pension.

But he said the government did not realise this at the time it agreed to pump 20bn of taxpayers' money into the firm.

It was thought 50-year-old Sir Fred's early retirement deal was "an unavoidable legal commitment".

Meanwhile, RBS has announced plans for sweeping changes to its structure and has not ruled out substantial job cuts.

The bank also said it would put 325bn of toxic assets into a scheme that offers insurance against any further losses.

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