In November 2008 the Royal Bank of Scotland reported £10.8bn in pre-tax losses; the British Treasury channeled £20bn into the bank in return for a 58% stake. Prime Minister Gordon Brown is threatening legal action against former-RBS chief Sir Fred Goodwin, who stepped down from his position with a rather substantial pension - £16 million.

The £693,000-a-year for life was agreed upon in exchange for the 50 year old Sir Goodwin retiring quietly amid the scandal: had he been fired, critics speculate, his pension would have been dramatically smaller. Sir Goodwin has retaliated by claiming that ministers knew the figure and signed off on it without question; Mr. Brown maintains that the “unjustifiable” actions were not made known to him until recently.

In an interview with BBC news, Mr. Brown told reporters of his outrage at the situation and revealed that legal counsel is being sought should Sir Goodwin remain uncooperative.

“When banks fail… the people who make the mistakes cannot and should not run off with entitlements and with additional discretionary payments… this is unjustifiable, unacceptable and we are going to clean up the banks so that this doesn’t happen again.” - Gordon Brown

After it was revealed on Thursday that the pension could have been vetoed in early October, Treasury minister Lord Myners is being looked to for a resignation. Ministers of the opposition cautioned the public on placing all blame upon Sir Goodwin for keeping the money, and instead suggest holding the Prime Minister and Lord Myners accountable for allowing the decision to go through.

Lord Myners rebutted by claiming he did not sign off on the £693,000-a-year pension; even though he was appointed just several days before the motion was passed critics question the veracity of his claims. The pension scandal has taken center stage in the recession and is being dubbed a “smokescreen” to detract from the colossal amount of tax dollars which went into the bailout.

Had the bailout not occurred, Sir Goodwin’s pension would have been fixed at £27,000 under the pension protection scheme, which is still substantially more than most.

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