MP demands tax hike for Sir Fred

Sir Fred's pension fund nearly doubled when he accepted early retirement

A Labour MP is attempting to reduce the pension awarded to former Royal Bank of Scotland (RBS) boss Sir Fred Goodwin by increasing the rate of taxation.

John Mann has tabled a Commons motion which, if adopted, would tax those receiving retirement packages worth more than �700,000 a year at 90%.

Sir Fred's pension has been revealed to be worth �703,000 a year.

Mr Mann said raising the level of tax would leave him with about �70,000, which he called "more than enough".

Sir Fred's pension was this week revealed to be �10,000 a year more than the �693,000 previously stated.

'Significant increase'

When the 50-year-old agreed to take early retirement as RBS chief executive last October his pension fund nearly doubled to �16m.

At the time the government was preparing to pump �20bn into the crippled bank and wanted to get new management in place.

In his motion Mr Mann, MP for Bassetlaw, says that "taxation levels for pensioners in excess of �50,000 a year should be significantly increased, with those receiving a pension of over �700,000 a year being taxed at 90%, leaving a pensionable income of �70,000 which is more than enough for any pensioner".

RBS says it asked Sir Fred to retire, rather than sack him, to ensure an orderly handover to his successor.

It acknowledges that if he had been dismissed, his pension would now be �416,000 a year, not �703,000.

Earlier this month Labour's deputy leader, Harriet Harman, told the BBC Sir Fred "should not count" on receiving the full amount "because it is not going to happen".

But opposition parties have cast doubt on the government's ability to ensure this.