Fred Goodwin knighthood 'hysteria' criticised

 

Viewpoints: Should Fred Goodwin have lost title?

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The decision to strip former Royal Bank of Scotland boss Fred Goodwin of his knighthood has been criticised by business and political figures.

Ex-Labour Chancellor Alistair Darling said the decision appeared to have been taken "on a whim", as Mr Goodwin was not the only banker to cause problems.

The Institute of Directors warned of creating "anti-business hysteria".

Mr Goodwin was RBS chief executive in 2008 when the bank's near-collapse prompted a £45bn taxpayer bailout.

The Queen cancelled and annulled the title on the advice of the forfeiture committee - whose members include top civil servants and the head Treasury lawyer - in a decision welcomed by party leaders.

'Obscure' process

It followed a clamour for Sir Fred to be stripped of the title, awarded for "services to banking" under the previous Labour government in 2004.

But Mr Darling, who as Labour chancellor led negotiations over the RBS bailout, said he was concerned about the "obscure" process used to annul the knighthood and said there should be a clear set of principles on which decisions are based.

Here in one of Scotland's smartest suburbs there is some sympathy for Fred Goodwin.

He was last seen late on Tuesday afternoon, sweeping out through the electronic gates of his large house in The Grange in a black Jaguar.

There are plenty of bankers behind the high walls of these tree-lined streets who feel that Mr Goodwin's treatment has been harsh.

Yes, they say, he was an arrogant, hubristic dealmaker but at a time when arrogant, hubristic dealmakers were all the rage, feted by many of the same politicians who are now cheering his downfall.

As RBS chief executive, Mr Goodwin cemented Edinburgh's reputation as a financial powerhouse, to the delight of staff and shareholders who grew rich, on paper at least.

The Treasury was more than happy to take and spend the millions of pounds in taxes paid by RBS.

For others though, including some of the more old-fashioned bankers in the Scottish capital, many of whom lost fortunes when boom turned to bust, Fred Goodwin deserves the opprobrium.

He was the epitome, they argue, of what went wrong with banking, helping to turn an industry with a reputation for being safe, solid and secure into a casino.

Either way, when the crash came, Sir Fred had the furthest to fall.

He questioned the idea that the decision had been undertaken independently, telling the BBC: "Committees can see the way the wind is blowing. I think the minute he was referred, the outcome was inevitable.

"I'm not here to defend Sir Fred... I just think we're getting into awful trouble here if we go after people on a whim and we don't have a clear set of principles against which we can judge people, it's not right."

The Institute of Directors (IoD) warned of politicians creating "anti-business hysteria" over the matter. Its director-general Simon Walker told the BBC that removing a knighthood because "you don't approve of someone" without there being any criminal conduct "politicises the whole honours system".

In the past, only convicted criminals or people struck off professional bodies have had knighthoods taken away.

Former Confederation of British Industry chief Lord Digby Jones, a former trade minister under Labour, said there was "the faint whiff of the lynch mob on the village green" about the decision.

However, he added he did not disagree with the end result to strip the honour.

'Cabinet of millionaires'

Former Formula 1 motor racing world champion Sir Jackie Stewart - a friend of Mr Goodwin - said he thought the former bank boss had been made a scapegoat.

"No single person or even any single bank created the biggest financial recession in modern times," he said.

"To have this stripped I think is poor for the constitution and very dangerous for the future."

There were angry clashes in the Commons on Wednesday as Labour leader Ed Miliband pressed the prime minister to do more to make banks disclose how many employees were paid more than £1m.

David Cameron accused Labour of "hypocrisy" - saying the last Labour government had approved a bonus pool of £1.3bn at the Royal Bank of Scotland, and Mr Miliband was now in favour of action he had not taken in government. He had to withdraw the comment after the Speaker told him it was "not parliamentary".

But Mr Miliband accused the prime minister of giving "no leadership on top pay" - and said laws requiring banks to disclose high-paid employees was already on the statute book and could be implemented by ministers.

He added: "I think we have now heard it all. He says the class war against the bankers is going to be led by him and his cabinet of millionaires. I don't think it's going to wash."

Deputy Conservative deputy chairman Michael Fallon said it was wrong to suggest there had been political interference in the decision about Mr Goodwin.

He told BBC Radio 4's Today programme: "Ministers don't control the timings of the forfeiture committee, this is an entirely independent committee of civil servants."

'Public demand'

He also rejected suggestions it had been "done on a whim" - saying it had been three-and-a-half years since the near-collapse of RBS and followed a detailed report by the FSA.

He suggested other bankers could yet face similar consequences but added: "This was the biggest bank, [Mr Goodwin] was the dominant player in it and I think the public rightly feel [he] got away scot-free at the time... We've had this persistent demand from the public as to why this man should be allowed to retain an honour he was given for services to banking."

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 him to be stripped of his honour following thousands of job losses at RBS and in the banking industry, and the impact on the wider economy.

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.

 

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  • rate this
    +2

    Comment number 678.

    The honours system needs transparency and cleaning up. If it exists today it must be for genuinely going far above the call of duty and not those with access to pulling the right strings. It should be like winning a sports medal or cup - to be removed if you discredit it.More banking honours must go.
    Totally agree cathinscotland - the top tier of this part of the industry just 'doesn't get it'.

  • rate this
    0

    Comment number 677.

    365. AlexSmeeden "Unless there is a lower middle-class mafia which I have yet to hear about."

    Ah yes, I've heard of that. I believe it's an organisation called the Daily Mirror.

  • rate this
    +1

    Comment number 676.

    If nothing else, this step is essential to stop us (represented by the media' ) being forced to pay the respect of calling him 'Sir'!

  • rate this
    -1

    Comment number 675.

    Everyone is having their views on City bonuses and no doubt some are kean football supporters. Has anyone questioned how a pair of feet can be worth 250,000 per week and no one makes any comment !!!City bonuses have been around for years and yes they are excessive but not for the heads of the companies who take responability but 100's receiving millions-no why do they need such high bonuses ?

  • rate this
    +3

    Comment number 674.

    Interesting and unfair that Fred Goodwin loses his knighthood for being incompetent while Jeffrey Archer still keeps his place in the House of Lords despite being a convicted felon who did several years time at Her Majesty's pleasure.

  • rate this
    +2

    Comment number 673.

    The IoD are constantly defending the indefensible. If these are the people in charge of our banks and other companies then no wonder the country is in such a mess.

  • rate this
    +4

    Comment number 672.

    When inexperienced, immature young people rioted society sent a strong message that this behaviour was anti social with hard prison sentences. When mature, experienced executives act irresponsibly in their own best interests & hurt society the message must go out loud and clear that we will not tolerate anti social behaviour. Removing Fred Goodwin's knighthood is intended to act as a deterent.

  • rate this
    0

    Comment number 671.

    where's my post?

  • rate this
    0

    Comment number 670.

    Criminal / Illegeal: Law passed to stop it. Doesnt work for 'us'
    Legal: No move to stop it. Works for 'us'
    Using a Moblie Phone While Driving: guideline: legal unless deemed illegal by 'us'
    Us: a pronoun for 'those who govern (sic)'
    Moral: haw haw haw.... refer above

  • rate this
    +1

    Comment number 669.

    I don't care if he keeps his Knighthood or not. What I want to see is him and his like in court the same way as rogue traders who lose billions are held to account. Seems that when traders and bankers take huge risks and it pays off in their favour they all get a handshake and a huge bonus, whereas when it goes wrong only some of them end up in court.

  • rate this
    +74

    Comment number 668.

    The impact of losing your knighthood is insignificant compared to the pain inflicted on shareholders and employees of RBS. It's timely that business leaders take personal risk when they embark on risky adventures with other people's money. How can you retain a knighthood for 'services to banking' when you have destroyed the bank you have managed ?

  • rate this
    +2

    Comment number 667.

    Marx & Engels must be laughing themselves silly in their graves at the moment!
    Western Free-Market Capitalism is charging headlong into oblivion while the impotent economic cannon fodder rant & rave on forums like this.
    As for the Honours system, it's Knighthoods for the boys and throw the odd MBE to the people who do some actual good in society to give the whole thing some credibility.

  • rate this
    +15

    Comment number 666.

    Let him keep his knighthood. But his pension should be cut. It should be no higher than a civil service pensions (i.e. a lot lower than present) since is being paid by a public owned institution, RBS. The same goes for all the senior executives who worked with him. Is that not equitable?

  • rate this
    +3

    Comment number 665.

    It would have been much better to keep the knighthood as an enduring testament to this disgraceful homage to cronyism and social inequality. After all, who on earth takes 'Lord' Archer seriously? The medieval awarding of 'honours' serves only to aggrandize the Windsor family and to perpetuate social difference.

  • rate this
    +4

    Comment number 664.

    never mind the knighthood or lack of . . . . what about the totally obscene amount of annual pension? There are quite a few of us who are recently retired who didn't earn as much as his annual pension in an entire 40+ year working life! My heart bleeds for him

  • rate this
    +4

    Comment number 663.

    In 1995, Nick Leeson's unchecked and irresponsible risk-taking cost Barings Bank $1.4 billion and led to the collapse of the bank. For this, he was sentenced to 6.5 years in a Singapore jail. Goodwin's unchecked and irresponsible risk-taking cost RBS £45 billion and led to the collapse of the UK economy... need I say more?

  • rate this
    +1

    Comment number 662.

    "Stephen Channell
    Clearly Fred Goodwin’s success with Directline & NatWest lead to the Hubris buying ABN Amro,"

    And the consequence of hubris is NEMESIS.

  • rate this
    +4

    Comment number 661.

    The first rule of any takeover is to thoroughly audit the potential liabilities of the takeover target.
    Goodwin failed to do this when he bought ABN Ambro & exposed RBS to this loss. Executives within RBS and NatWest were against this takeover and expressed concern but were ignored by the main RBS board.
    Is this arrogance a reason to remove a Knighthood? If so it should apply to the whole board.

  • rate this
    +2

    Comment number 660.

    There is no hysteria. In these extreme times Free Market Capitalism's worst imperfections are clear for all to see. No wonder some of its leading acolytes attract popular contempt. The IoD's comments simply affirm whose side it's on. But why only Fred? A cheap shot from PR Dave methinks: creating the illusion of banker-bashing whilst doing precisely nothing of substance.

  • rate this
    0

    Comment number 659.

    Yes he should lose his Knighthood what he allowed to happen was bad but let's also remember that the US started the whole debacle and greedy people pushing up the house prices certainly did not help. This was/is a generation of have now pay later and sod the consequences!

 

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