Fred Goodwin: decision to strip knighthood was result of 'anti-business hysteria'
THE decision to strip Fred Goodwin of his Knighthood has been condemned by British politicians and business leaders who have accused the government of allowing "anti-business hysteria" to take over.
The shamed RBS former chief executive had his honour annulled by the Forfeiture Committee after overseeing the biggest failure in British banking history, resulting in a £45bn bailout by the taxpayer.
But the decision has been criticised by many leading business figures who argue that he has been unfairly singled out for his role in the banking crisis and has become the victim of a “lynch mob” mentality.
Former Labour Chancellor Alistair Darling said the decision to remove Mr Goodwin’s honour was “tawdry” insisting there were other bankers with honours who could equally be punished for their reckless actions.
Mr Darling said: “What concerns me is that the government appears to be going after individuals without first of all establishing the principles on which they are going to be
“We need to know what the principles are. There were other knights of the realm on the board, are we going after them?”
“He was not the only one who had caused problems. Simply being blown along in the wind like this is not good government. I think we are getting into awful trouble here if we are going after people on a whim, without principle.”
He added: “There is something tawdry about the Government directing its fire at Fred Goodwin alone; if it's right to annul his knighthood, what about the honours of others who were involved in RBS and HBoS?"
Simon Walker, Director General of the Institute of Directors warned that stripping people of honours to appease public opinion threatened the credibility of the entire honours system.
He said: “I am concerned about an anti-business hysteria about the whole situation. There is a well established procedure if people are convicted of criminal offence they are stripped of their honours.”
Twitter: Fraser Nelson - @rebekah_norton no, but I don't think the crash can be blamed on Goodwin and his ilk. He's being made a fall guy.
The decision has received full support from all the main party leaders, who insist it was right to remove Mr Goodwin’s knighthood because it had been awarded for services to banking.
David Cameron said it was the “right decision”, while Chancellor George Osborne insisted Mr Goodwin represented “everything that went wrong in the British economy over the last decade”.
Labour leader Ed Milliband said the punishment was “only the start of the change we need” in boardrooms.
Twitter: Ed Miliband - It is right that Fred Goodwin has lost his knighthood, but it’s only the start of the change we need in our boardrooms.
The Forfeiture Committee, made up of senior civil servants, met last week to consider the issue.
Its recommendation to strip Mr Goodwin of the honour was conveyed to the Queen by the Prime Minister.
The Cabinet Office said: "This decision, not normally publicised in advance, was taken on the advice of the Forfeiture Committee, which advised that Fred Goodwin had brought the honours system into disrepute.
"The scale and severity of the impact of his actions as CEO of RBS made this an exceptional case."
But Labour John Mann, who is a member of the Treasury Select Committee, said it would be wrong to think that the public anger over the banking crisis would now be satisfied.
He said: “The danger is that there is a presumption that there was a rogue banker, and there was one man who was getting it wrong. In fact it was many bankers, including the whole board of RBS.”
He added: “Politicians will now be accused of hypocrisy because I don’t think anyone has gone through the various MPs who had to stand down to see if they had anything honours.”
“Senior politicians will now say, ‘we can move on, we got the guilty man’. It wasn’t one guilty man. There were many more bankers and the culture of banking was so that there were huge numbers of people taking excessive risks. If we are going to reward those who gambled and succeeded, but punish those who gambled and lost, we are supporting the whole system of reckless banking.”
Lord Digby Jones, the former Labour trade minister said there ought to be some clear guidelines established about when a person forfeited their right to keep an honour.
He said: “There is a whiff of the lynch mob on the village green about this. Why just him?...This probably throws up the need for some serious guidelines about when it will happen and when it won’t.
“It’s very clear about a criminal offence…but Sir Fred Goodwin has not been charged with, nor had anything examined in a court, nor found guilty of anything.
“We can obviously see where he went wrong but not a criminal offence. Perhaps it should be when someone has been censored by the professional body to which they subscribe and of course he was by the FSA.”
But defending the decision to strip him of his title, Michael Fallon, deputy chairman of the Conservative Party and a member of the Treasury Select Committee said: “This has not been done on a whim or blown about on the wind, this is three and a half years after the downfall of RBS and follows a very detailed report from the FSA that details the exact role that Sir Fred Goodwin played.”
He added: “The was an exceptional case because of the scale and severity of what he did as chief executive of RBS.”