Downing Street Says » Royal Bank of Scotland

Asked if the Prime Minister had full confidence in Lord Myners, the Prime Minister s Spokesman (PMS) said yes.

Asked why, the PMS replied that the Prime Minister believed that Lord Myners was a minister who brought a huge amount of expertise in city matters, which was why he had been appointed as City Minister.

Asked repeatedly if Lord Myners had asked if Sir Fred Goodwin s pension was legally binding, the PMS said that Lord Myners had set out his position very clearly in his letter yesterday to Sir Fred Goodwin. Lord Myners made it clear that he was not aware that there was any discretion in the matter of Fred Goodwin s pension arrangements.

Put that Lord Myners should have found out the exact details, the PMS said that the clear understanding Lord Myners had been left with was that these were contractual entitlements.

Asked what discussions had taken place, the PMS said that in terms of the specifics it was best to speak to the Treasury. There were discussions that Lord Myners had had with members of the then RBS board about this issue back in October. Lord Myners set out his position in his letter yesterday, in line with what the Chancellor said in the House of Commons.

Put that Lord Myners had got the impression that the pension pot was a contractual entitlement from senior members of the then RBS board, the PMS said that Lord Myners had talked to senior people in RBS and given the impression that these were contractual entitlements.

Asked whose fault it was that Lord Myners was under that impression, the PMS said that Lord Myners had set out his and the Government s position in his letter to Sir Fred Goodwin yesterday and there was nothing to add to that.

Asked if the Government was ready to take legal action, the PMS said that the Treasury had already said on Wednesday that it had been pursuing this with the new chairman of RBS and was in discussions with RBS management as to the scope for any potential legal redress.

Asked if that included possible measures against the then board of RBS, the PMS said that he was not going to speculate about possible measures. We were exploring the scope for legal redress and whether or not the then board of RBS took the decision in the full knowledge of the facts.

Put that John Prescott had suggested taking a chunk of Sir Fred Goodwin s money back which would lead to him suing the Government, the PMS said that the Government was examining the legal basis for these payments.

Put that the Government was not ruling out legal action against former members of the RBS board, the PMS said that we were examining the scope for legal action. We would not comment on specific hypotheticals but we were exploring all legal avenues and asking RBS whether the board took the decision in the full knowledge of the facts.

Asked if the Government was happy that some RBS board members who had been part of that decision remained on the board, the PMS said that one of the things we had asked RBS to do was to look at whether the board made the decision in the full knowledge of the facts.

Asked who was looking into the Government s legal options, the PMS said that UK Financial Investments was in discussion with RBS.

Asked if it was fair to say that the Government had been so concerned last October with saving the banks from collapse that the details of the pension plan got lost in the mix, the PMS said that people could characterise it as they wished. It was certainly the case that we needed to act quickly in October in order to announce our intention to recapitalise RBS and to prevent it from collapse at that time. It was in October that we announced our intention to recapitalise. We took over the majority shareholding and shareholder responsibilities formally in December.

Asked if Sir Fred Goodwin s knighthood for services to banking should be withdrawn, the PMS said that the Government was focusing on ensuring that we had strong and stable banks and that we acted in the best interests of the economy and did what was right by the tax payer.

Asked if we would have a re-run of this situation with Peter Cummings from HBOS who left in January, the PMS said that we had made clear that we would always look at the legal basis for any of the contractual entitlements that appeared to have been entered into.

Asked if the Government was finding it difficult to keep the running of the banking system at arm s length as it said it would, the PMS said that he would not characterise it like that. We also made clear that we needed to act in order to ensure tax payers interests were main focus.

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» Friday, February 27, 2009

Royal Bank of Scotland

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