Former RBS boss Fred Goodwin stripped of knighthood

 
Fred Goodwin Mr Goodwin was in charge of RBS in the run-up to its near collapse in 2008

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Former Royal Bank of Scotland boss Fred Goodwin has had his knighthood removed.

Mr Goodwin, who was heavily criticised over his role in the bank's near-collapse in 2008, was given the honour by the Labour government in 2004.

The Queen cancelled and annulled the title following Whitehall advice.

Party leaders, led by Prime Minister David Cameron, welcomed the decision. In the past, only convicted criminals or people struck off professional bodies have had knighthoods taken away.

Mr Goodwin oversaw the multi-billion-pound deal to buy Dutch rival ABN Amro at the height of the financial crisis in 2007, which led to RBS having to be bailed out to the tune of £45bn by taxpayers.

There had been a growing clamour for Mr Goodwin to be stripped of his honour following thousands of job losses at RBS and in the banking industry since then, and the impact on the wider economy.

'Exceptional case'

Arise plain old Fred Goodwin. Sir Fred no longer.

The man who sank a bank - the former chief executive of the Royal Bank of Scotland - has been stripped of his knighthood.

It was - formally at least - the Queen who honoured Fred Goodwin in 2004 for services to banking and it was Her Majesty who today decided to dis-honour him.

She, as ever, was acting on the advice of her prime minister who was acting on the recommendation of a shadowy Whitehall committee - the so-called Forfeiture Committee - chaired by the Head of the Civil Service.

The decisions - first to give him a knighthood and then to remove it - were, primarily, political decisions

After the removal of the knighthood, a Cabinet Office spokesman said: "The scale and severity of the impact of his actions as CEO of RBS made this an exceptional case."

He added: "Both the Financial Services Authority and the Treasury Select Committee have investigated the reasons for this failure and its consequences.

"They are clear that the failure of RBS played an important role in the financial crisis of 2008/9 which, together with other macroeconomic factors, triggered the worst recession in the UK since the Second World War and imposed significant direct costs on British taxpayers and businesses.

"Fred Goodwin was the dominant decision-maker at RBS at the time. In reaching this decision, it was recognised that widespread concern about Fred Goodwin's decisions meant that the retention of a knighthood for 'services to banking' could not be sustained."

'Proper process'

The BBC's business editor Robert Peston said Mr Goodwin was in a "class of his own" in terms of the risks that he took at RBS - reflected in the size of the bailout required to rescue the company.

In 2009, Mr Goodwin, who received an annual pension of £650,000 - later reduced to £342,500 - after leaving the bank, told a committee of MPs he "could not be more sorry" for what had happened.

George Osborne, Ed Miliband and Alex Salmond react to Fred Goodwin losing his knighthood

Both Mr Cameron and Labour leader Ed Miliband welcomed the decision.

"The FSA report into what went wrong at RBS made clear where the failures lay and who was responsible," Mr Cameron said. "The proper process has been followed and I think we have ended up with the right decision."

And Mr Miliband said the public wanted to see further sweeping changes to boardroom culture and remuneration.

"It is right that Fred Goodwin lost his knighthood but I think it is only the start of the change we need in our boardrooms.

"We need to change the bonus culture and we need real responsibility right across the board."

'Public opprobrium'

Deputy Prime Minister and Lib Dem leader Nick Clegg said Tuesday's announcement was the "right decision" while Chancellor George Osborne described the decision as "appropriate".

Start Quote

RBS came to symbolise everything that went wrong in the British economy in the last decade”

End Quote George Osborne Chancellor

"RBS came to symbolise everything that went wrong in the British economy in the last decade," he said.

Scottish First Minister Alex Salmond said it was the "correct decision", since the knighthood "was for services to banking which could not therefore be sustained".

The Unite union also welcomed the move, with senior official David Fleming saying it was "a token gesture... but one which will be well received by the thousands of workers who lost their jobs during his rule".

Conservative MP David Ruffley, a member of the House of Commons Treasury Select Committee, said Mr Goodwin had acted "recklessly" and the public wanted him to be "held to account".

He told Sky News "there was a sense that this guy had got away scot-free and the only thing left really to show the public opprobrium was for the knighthood to be stripped".

'Politicising honours'

However, the move was not welcomed by all. Simon Walker, director general of the Institute of Directors, did not approve of the honour withdrawal, saying he was concerned there was "a hysteria about the whole situation".

While he said that the system of stripping an honour for criminal offences was "appropriate", he added: "To do it because you don't like someone, you don't approve of someone, you think they have done things that are wrong but actually there is no criminality alleged or charged, I think is inappropriate and politicises the whole honours system."

The forfeiture committee - whose members include the cabinet secretary, the top civil servant at the Home Office, the top lawyer at the Treasury and the top official in the Scottish government - made the decision to recommend he lose the honour.

The Queen has the sole authority to rescind a knighthood, after taking advice from the government.

 

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  • rate this
    -11

    Comment number 640.

    It seems rather unfair to me. The man committed no crime, he just took some business risks that didn't work out Are we now going to strip sportsmen of their honours if they are a failure for the rest of their careers?

  • rate this
    +17

    Comment number 615.

    does anyone actually care about these honours nowadays cos i don't.
    removing goodwins millions and golden pension would be REAL justice.

  • rate this
    +15

    Comment number 614.

    Forget the stripping of honours. When will we change the culture of Golden Handshakes for top CEOs, managers, and government officials who fail in their jobs? He's still walked away with an enormous pension whereas any common person who fails to do a decent job will be sent packing, no safety net and no big payoffs.

  • rate this
    0

    Comment number 598.

    Fred Goodwin convienient scapegoat.... stripping him of his knighthood a hollow newsgrabbing stunt.

  • rate this
    0

    Comment number 575.

    If the precedent is that knighthoods are lost only for crimes, we should stick to that. The guilty party is the Labour government for knighting a knave. They should have to live with that in the same way that Harold Wilson had to live down his lavender list. If Sir Fred broke the law, let him be charged. Otherwise, his reputation is already mud, so who cares about the knighthood?

 

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