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
    -3

    Comment number 624.

    The knighthood of Goodwin reminds us of the failure of the Labour Government, the illusion of success which Gormless Gordon and his henchmen (Balls and Miliband) generated and taking away the Honour does nothing to make me forgive and forget those failings. Goodwin and the Labour Government were interconnected.

  • rate this
    +2

    Comment number 623.

    Well it may have been the right decision but I feel for the wrong motivations, I never support decisions that have been made on the back of populist waves of anger

  • rate this
    +3

    Comment number 622.

    Hard to argue, but what about those who created the mess in HBOS and Lloyds? How can Sir James Crosby's position be so different from notsir Fred Goodwin??

  • rate this
    0

    Comment number 621.

    Lord Broon of Inverarse has a nice ring to it.

  • rate this
    +4

    Comment number 620.

    @557 hey billy boy - you're not following.
    ----
    It doesn't take guts to hide behind Angela Knight skirt.Nor does it take guts to sack 000's of workers workers then claim a whopping bonus for being "efficient" - a thick skin maybe, but guts, nah.
    You are right about the risk taking though. I certainly wouldn't buy an investment based on the ability of a broke person to repay a mortgage.

  • rate this
    +6

    Comment number 619.

    Ah well everything right with the world now, country will be back on track tomorrow now Sir Fred, Mr Fred.
    That along with the loss of bonus means ??? Hang on a minute what exactly does it mean, less tax for everyone?, easier lending?.
    Ah well never mind
    All hot air and posturing as usual from politicians

  • rate this
    +3

    Comment number 618.

    What about "Lord" Archer? the man committed purgery and then used his false aquittal for financial gain. How can he remain with this priviledge? By keeping this he still has a say in how our country is run, even though he is unelected and has a criminal record. Two-tier Britain.

  • rate this
    +13

    Comment number 617.

    The whole banking system is based on usurious fraud; the accepted practice of making money from money is truly abhorrent, and then bankers have the temerity to financially remunerate themselves more than is necessary for the service they provide.

    When that system systematically disrupts the lives of people all around the world, I think that is grounds for criminality.

  • rate this
    +2

    Comment number 616.

    # 552 Max
    Do you even understand a fraction of one percent of the consequences of allowing the Government to confiscate personal property of *anyone* who they don't like

    Oh do stop being a drama queen Maxy, it would simply constitute reclamation of monies secured under false pretenses (I mean we can argue over intent but who's gonna invest in mortgages for people with no money? I mean, really?)

  • 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
    +2

    Comment number 613.

    Might it not be a good idea now to bar people without banking qualifications, like Fred and many of the other 'bankers' who caused this mess, from practising as bankers. Those issuing the qualifications would thus have a chance to spot unsuitable candidates as happens with doctors and lawyers. Bankers of integrity are arguably at least if not even more important

  • rate this
    -3

    Comment number 612.

    I wonder if Fred Goodwin would have been treated the same way if he had been part of the "established" banking fraternity and had gone to the "right" school instead of making it to the top through his own hard work and ability? I think not.

  • rate this
    +1

    Comment number 611.

    I'm sure plain old 'Fred' will be inconsolable... as he sleeps on a waterbed filled with the tears of the newly destitute, surrounded by piles of our money.

    this news wouldn't be overshadowing more pressing concerns about bankers and their bonuses would it?

  • rate this
    +5

    Comment number 610.

    Good O. Step one complete. Now. Whilst we are on the moral high ground for a change can we have Blair in court in the Hague? Murdoch recalled to explain his comments to the select committee and how about the government divulging it's contract with ATOS? No? Thought not.

  • rate this
    +2

    Comment number 609.

    Just seen Jackie Stewart defending him, a reminder there of the excesses that pushed RBS to the edge, as Stewart was paid £3m odd by RBS to turn up at a few F1 races.

  • rate this
    +5

    Comment number 608.

    At least action has been taken to rectify the enoblement of a man who made a big mistake.
    Could we please have more of the same when other big names in the field of Business and Politics make similar mistakes.

  • rate this
    +7

    Comment number 607.

    Former Royal Bank of Scotland boss Fred Goodwin has had his knighthood removed.
    -good
    can we have Blair and brown jailed next for what they did to this country and the rest of the world,
    they are both criminals and their party should follow them to prison

  • rate this
    +3

    Comment number 606.

    @ 21. "When is the law going to hold CEOs ACCOUNTABLE for their actions."

    The law will hold them accountable when banks are regulated. This is something the government didn't do (knowing full well the risks) as they were happy to rake in billions from the banks. The government now blame the banks for this fine mess. I blame the government as business will always take risks (within the law).

  • rate this
    +2

    Comment number 605.

    . chinkinarmour
    10 MINUTES AGO
    OK, so its no longer "SIR Fred", but if there is a title for amazing pension Fred will still keep that title.
    We have hypocritical peers such as prescott, mendelson, boateng, uddin, KINNOCK...imagine Labour voters have their way, we'll have:


    no mention of all the dodgy tory peers!!!!

 

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