Harriet Harman has made a most interesting intervention in the affair of Fred’s wedge.
Speaking on the Andrew Marr Show yesterday, Ms Harman said:
“To get a severance payment when you’ve led a bank to the brink of collapse with record losses and thousands of people fearing for their jobs and requiring the public to step in with loans to back up the bank, that is a matter of public interest now and the Prime Minister has said that that is unacceptable.
“The Prime Minister has said it is not acceptable and therefore it will not be accepted. It might be enforceable in a court of law, this contract, but it’s not enforceable in the court of public opinion and that’s where the Government steps in.”
The first paragraph of Harman’s pronouncement is unimpeachably correct. It’s the second paragraph that’s a bit problematic. Putting aside the gloriously New Labour phrase “court of public opinion” (shades of “people’s princess” there), one must ask: how precisely is the Government going to step in?
Notwithstanding the Prime Minister’s spluttterings about “legal action”, most lawyers I have spoken to take the view that a contract is a contract, and unless something seriously untoward, and as yet undisclosed, happened, the Government is, sadly, stuck with it. Which is why someone really ought to be resigning.
Of course, primary legislation could be used to reverse the pay-off, but that would be a pretty draconian step and would also set a disturbing precedent. It would imply, effectively, that whenever the Government entered into an ill-judged legal arrangement, it could undo the damage simply by trooping its parliamentarians through the lobbies. Such a course of action would do nothing for the confidence of anyone intending to deal commercially with HMG, particularly at this difficult time.
Harriet Harman is, of course, Leader of the House, so would be in the best position to know if the Government is indeed intending to table an appropriate Bill.
However, given that No. 10 is apparently “distancing itself” from the suggestion that it intends to pursue the legislative course, it would appear that the PM prefers to await the advice of m’learned friends and that Harriet – for whatever reason, and I’m sure with helpful intent - was just flying a kite.
Traditionally, compromise agreements are used when two parties want to come to a settlement that avoids costly litigation, something as a QC, Harman should be familiar with. To suggest that it can be challenged where both parties were in receipt of legal advice is ridiculous. Unless, of course, there was some kind of ‘material’ factor that one or other party was not aware of. However, that would require a deliberate intention to mislead, rather than the failure of one party or other not to ask the question. The bottom line is, whilst the agreement may have been poorly negotiated, it is unliely in the extreme, that it would not be enforceable. So, rather than grandstanding, government ministers would be better advised to get on with ensuring that our investments are safe.
As for retrospective and targeted legislation, well that would really draw into question whether we are in a democracy or not, after all, if one person can be targeted by a vindictive government, it is but a small step, before larger groups are. Where then I wonder?