| RBS Debacle |
| The issue: |
Dear Sir George
I refer to the recent furor over Sir Fred Godwin, and respectfully ask for your representation in the House of Commons to question as follows:
a) RBS would be a collapsed company – if the government o.b.o UK taxpayers had not intervened YES or NO?
b) If no, then why did the government intervene?
c) So assume “Yes”; therefore RBS (without intervention) would have sunk and be no longer be in a position to pay pensions – thereby in that situation FG would (like any others) not receive any pension.
d) But the government intervened/rescued/took over i.e. on paper there has been a controlling take-over of RBS by ‘new management’.
e) New management's responsibilities SHOULD have included reviewing liabilities, staff contracts etc.
f) So why was there at this stage no re-negotiation of any contracts – including FG – and I refer to point c above?
Has the government failed to conduct the rescue of RBS in the interests of the ‘new owners’ (you and me as tax payers), or has the rescue been to retain the packages of the previous management who were at the helm leading up to the imminent collapse of RBS?
Or did government (and its bodies) miss this out altogether in the rush to rescue RBS?
Why has the government failed to re-negotiate (from a position of strength – again refer to point c) any existing contracts, since in the commercial world, this would have been done. (In fact I would suggest that FG would have done so himself if he’d been taking over such a company!?)
The entire debacle seems to indicate that the government and its various bodies did not act in the full and true interests of the ‘new owners’ (you and me) by renegotiation any existing contracts, and thus did not act as a commercial entity in this regard, thereby letting the tax payer (i.e. new owners’) to continue with a liability that would have theoretically ceased to exist if RBS had been left to sink on its own, and thereby should not exist in the 'new' RBS anyway.
Can you solicit answers please?
|
| Date Issue Raised: |
03 Mar 2009 |
| My response: |
Many thanks for your email, and the Treasury Select Committee are conducting an inquiry into the issue which you refer to, and have recently been cross-examining some witnesses. We will need to await their report to find out what they have concluded.
My understanding is that, if the Royal Bank of Scotland had not been rescued by the Government, it would have collapsed. Depending on the state of the pension fund, pensioners would either have got their contractual liabilities or, if the pension fund was insolvent, the pensions that are guaranteed by the Government's Pension Protection Scheme. The maximum figure under that scheme is £27,000 per annum. I am inclined to the view which you mention in your final paragraph, that the Government did not exercise due diligence when it intervened, and have now saddled the taxpayer with a liability which cannot be legally broken. However we need to await the findings of the Treasury Select Committee and of others before we find out what really happened.
Best wishes, George Young
|
|
Sir George Young Bt MP: Constituency and Parliamentary Website 