Denis: Even the rich failures are getting richer

Feb 27 2009 By Denis Kilcommons

THE economic inequality of our society continues to amaze me, although it has been around for many years.

The poet Shelley commented in the early part of the 19th century that the rich get richer while the poor get poorer. This also applies, it appears, to rich failures.

Sir Fred Goodwin, the former chief executive of the Royal Bank of Scotland, who is seen as the architect of the bank’s failure, was earning more than £4 million a year including bonuses before he was required to relinquish his post.

The Government had to step in with a £20 billion rescue package to save the bank.

The RBS is now 70% owned by the taxpayer and yesterday it announced more massive losses.

So what of Sir Fred the Shred, who got his nickname because of the ruthless way he bought banks and stripped them of their costs, often by shedding staff, to generate profits? Certainly not sackcloth and ashes.

He walked away from the RBS disaster with a £16m pension pot. This means that at the age of 50, he is already drawing £650,000 a year pension and will continue to do so for life.

Let’s just pause there: £650,000 a year for not working. That’s £12,500 a week, or £1,785 a day. A life of luxury and cruises for being a failure.

How does that compare to the average wage of the working man? And how would he be rewarded for failure?

"Sorry, gaffer, these valves are a millionth out. They’ll cause the gear boxes to seize up. I suppose that means we’ve lost the order and the factory will have to close because of me. Will I still get redundancy?"