Comment Central: Goodwin should keep the money but worry about his reputation

Ideas in politics, it turns out, are like buses. You wait for ages for one to show up and then three come along at once. And as it happens, it's been a good week for ideas.

The first idea - and you'll like this one - is that the Government should simply stop paying people it doesn't like. Actually, that's not quite right. I am making it sound less compassionate and clever than it really is. In full the idea is that the Government should pay people a randomly chosen proportion of their agreed income. Then individuals can sue to make up the rest.

This innovative thought comes from the fertile brain of the Liberal Democrat MP, Vince Cable. No wonder he is so widely respected. Put Mr Cable's proposition in place and the State could save a fortune. Better still, the public could really give people it doesn't like what for.

A particularly good use of this new rule would be with MPs' expenses. If any MP's claim produced more than a specified number of angry column inches in the newspaper, it would immediately trigger the Cable provision. The MP concerned would then be paid, say, 5 per cent of their claim and be made to go to court if they wanted the rest. Excellent.

You wouldn't think it was possible to top this idea, but it was. Last week a new form of pension indexing was proposed. Instead of linking pensions to either prices or earnings they would be linked to competence.

The pension agreed upon retirement would be subjected to periodic review of the important decisions made by the recipients during their professional career. If, in retrospect, the decisions didn't look as wise as they appeared at the time, money could be removed from the pension pot.

Such a reform would be greatly assisted by the implementation of this week's third big idea - Harriet Harman's tremendous suggestion that we supplement our ponderous courts of law, with all their lawyers and blathering on, with a court of public opinion.

This worked fantastically well in Iran after the revolution. The Revolutionary Tribunals didn't have to mess about. Judges were able to sentence unpopular people, have them shot and then go to lunch. Perhaps we might follow General Pinochet's example and hire a football stadium in which to hold sessions. On the entrance we could have a slogan emblazoned: “The Prime Minister has said it is not acceptable and therefore it will not be accepted.”

Now I am sure that the innovative thinkers responsible for these dazzling contributions to the public debate will have a ready riposte to my attempt to satirise their offerings. We did not propose these new rules for everyone, they will say. That would be ridiculous, they will agree. These are only meant for one man, they will protest. They are regulations intended just for the banker Sir Fred Goodwin. And you know what? God bless them, they think this response makes things better. They can't see that it makes it far, far worse.

I do not approve of the way bankers' pay has been determined. It seems obvious that the bonus system has acted as an incentive to take short-term risks that shouldn't have been taken. The granting of large benefits - pay, bonuses, pension rights, whatever - by one executive to another has been, in some cases, a conspiracy against shareholders and customers. The continuation of such a system is obscene and a subject of major public policy importance. Outstripped by one thing. It is even more important that we do not live in a country ruled by mob justice.

It may have been a mistake that led Sir Fred to be given such a large pension. It may be terrible that he gets to walk away with large amounts of cash, having caused a debacle. But there are now few things more important in politics than that he gets to keep every penny.

It is a choice. I would rather live in a country where people get away with being paid ludicrous amounts that they don't deserve, than in one where the public turns on someone who happens to walk in front of a television camera while it is rolling, and then tries to tear that person limb from limb.

Recently we had the case of Sharon Shoesmith. She happened to be running Haringey Social Services when a baby was killed. The baby's name was not released, and his killers remained anonymous. But Ms Shoesmith wasn't. Her department had clearly made mistakes and her handling of the press was absymal. It wasn't, however, as if she killed Baby P. Nor was the event - as opposed to the furore - unique. Does anyone think that - tragically, horribly - other children haven't died in circumstances where the handling by social services was suboptimal?

Perhaps it was right, given the failings of Haringey Social Services, some of which may even have been down to her, that she stood down from her post. But that wasn't enough, was it? Immediately it was demanded that she not be given any money in lieu of notice. The case was referred to the Court of Public Opinion. Sitting in judgment, Ed Balls (supported by the Tories, supported by almost everyone) ruled that the Prime Minister did not regard a payoff for Ms Shoesmith as acceptable, and therefore that it would not be accepted.

And so a professional trying to do her job - even if she did not succeed in doing it well - had her professional reputation shredded, was held up for everyone to abuse, and was left with neither salary nor payment. It was a disgusting episode.

Sir Fred must keep his pension for all the ordinary people who graft and earn a salary for a week's work, and live on what they earn from month to month. He must keep it for all those people who in years to come might accidentally come into the public spotlight and find the might of the State ranged against them just to allow some politician to look good for five minutes. This well-heeled banker must keep his absurd, inflated rip-off of a pension for the ironic reason that by doing so he defends justice against those who would trample on it.

In his magnificent book, Reasonable Doubts, O.J.Simpson's appeal lawyer Alan Dershowitz explains that it was right to find O.J. not guilty of murdering his wife, even if he did it. Simpson was a rare black defendant able to finance his case and show how the LA police routinely fitted up defendants, even if they didn't fit him up. He was powerful enough to force the court to defend the rule of law, something that was even more important than the conviction of the despicable Simpson.

Sir Fred's is obviously a different case. But the same principle applies. Justice depends on defending the rule of law. And the rule of law is never more severely tested than when it is cited in defence of an unpopular individual. Not a penny, Sir Fred. Don't give up a penny.

daniel.finkelstein@thetimes.co.uk

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