Thoughts on politics and life from a liberal perspective

Friday, 27 February 2009

Shredded by their own petard

If Mike Smithson on Political Betting is correct today then the terrible press that the government has received today (see here, here and here for examples) about Fred (The Shred) Goodwin's £650,000 pension is entirely their own fault.

Apparently the government leaked the information in order to divert attention from the ostensibly bigger story about the £24 billion loss that the Lloyds group has made. Unfortunately for the government, the story actually has synergy with the loss one and they obviously did not realise just how dreadful it appears for an ex CEO of a bank to get a pension of 2/3rds of a million pounds a year when he has presided over the biggest loss in UK corporate history. It embodies all that is wrong with corporate culture in this country and could almost have been created to yield the headline "reward for failure". That they overlooked this shows just how out of touch they are.

Allied to this, there are now allegations that the government either did know, or certainly should have known that some of Shred's pension was not formally agreed before ministers became involved in the running of the bank so they could (and certainly should) have intervened.

I think this story could prove to be the one that in retrospect sums up what has gone wrong with this government's attempt to manage this crisis and also highlights the systemic problems that they have allowed to flourish unfetterred for the last 12 years. If that is the case then they would have been much better off not leaking the story but they just cannot help themselves.

A government that lives by spin, dies by spin.

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