Fred Goodwin stripped knighthood
Fred Goodwin stripped knighthood
Goodwin received his knighthood in 2004 for “services to banking.”
Just 7 years later taxpayers were forced to shell out $70 billion to save the Royal Bank of Scotland which is now 83% government owned.
Refusing to give up his $26 million pension pot Goodwin walked away from the banking disaster without so much as a simple apology for his bumbling management of the company.
In the past only criminals, disctators and spies have had their knighthood revoked. In the meantime regulators are now calling for various other banks and investment brokers to also lose their knighthood.
With Goodwin out of the picture his successor who is also under pressure to turn around the company announced this week that he would waive his $1.5 million bonus payment.
I’m personally surprised more actions have not been taken against him by the British government. Do you think Goodwin deserved to have his knighthood taken away and should more actions be taken against him?
It was awarded by the previous Labour government in 2004 for services to banking .
The London Gazette announced that he had brought the honours system into disrepute.
Goodwin has no right of appeal, and in accordance with custom was given no right to make representations to the forfeiture committee, a group of four permanent secretaries. The authority to rescind an honour rests with the Queen alone.
David Cameron said: "I welcome the forfeiture committee's decision on Fred Goodwin's knighthood. The FSA [Financial Services Authority] report into what went wrong at RBS made clear where the failures lay and who was responsible. The proper process has been followed and I think we've ended up with the right decision."
The chancellor, George Osborne, told Sky News: "I think we've got a special case here of the Royal Bank of Scotland symbolising everything that went wrong in the British economy over the last decade.
"Fred Goodwin was in charge and I think it's appropriate that he loses his knighthood."
Announcing the decision, the Cabinet Office said in a statement: "This decision not normally published in advance was taken on the advice of the forfeiture committee, which advised that Fred Goodwin had brought the honours system in to disrepute."
The timing of the announcement was intriguing. It came the day after Cameron struggled to explain why he had not demanded that the current chief executive of RBS, Stephen Hester, refuse to take his full bonus.
Both Cameron and Ed Miliband had called for Goodwin to lose his knighthood.
Thehe forfeiture committee said: "The scale and the severity of the impact of his actions as chief executive officer of RBS made this an exceptional case.
"In 2008 the government had to provide £20bn of new equity to recapitalise RBS and ensure its survival and prevent the collapse of confidence in the British banking system. Subsequent increases in government capital have brought the total necessary injection of taxpayers' money in RBS to £45.5bn.
"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 2008-09, which together with 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 concerns about Fred Goodwin's decision meant that the retention of a knighthood for services to banking could not be sustained."
The CBI said: "The business community will understand the Queen's decision to take away the knighthood awarded to Fred Goodwin for services to banking in 2004. Such an annulment is exceptional but unsurprising, given all of the circumstances."
Normally an honour is withdrawn if someone is guilty of a criminal offence, and it will be asked whether other knighted bankers should also see their honours withdrawn.
The forfeiture committee is chaired by Sir Bob Kerslake, the head of the civil service. The other members are Dame Helen Ghosh, the permanent secretary at the Home Office, Paul Jenkins, the Treasury solicitor, Sir Peter Housden, the permanent secretary of the Scottish government, and Sir Jeremy Heywood, the cabinet secretary.
Ed Miliband told Sky News he welcomed the move. But he added: "I think it's 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. I think that is what the public want, I think that is what government working with the private sector needs to deliver."
David Fleming, Unite's national officer, said: "It is a token gesture to strip Fred Goodwin of his knighthood, but one which will be well received by the thousands of workers who lost their jobs during his rule.
"Nonetheless this will do nothing to bring job security to the staff across the banking sector who continue to work under a culture of excess and greed at the top. Action from the government is needed in banking reform, not simply empty rhetoric on knighthoods or shareholder activism."
The former director general of the CBI and one-time Labour trade minister Lord Digby Jones said: "I think there is the faint whiff of the lynch mob on the village green about this, but that isn't to say that the end result isn't what is right."
The Conservative MP David Ruffley, a member of the Treasury select committee, told Sky News: "This was a reckless man. He was playing with other people's money … he wasn't very good at it. He proved a huge disservice to the banking industry and I think what people wanted to hear was that this man was held to account.
"Bizarrely there's been no criminal charges against the man, so he's not going to be in front of a jury and 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.
Leading figures from the business world also voiced their disquiet, with Lord Digby Jones, the former head of the CBI, saying there was a "faint whiff of the lynch mob on the village green" surrounding the politically pressured decision to revoke the knighthood awarded to the former chief executive of Royal Bank of Scotland for services to banking in 2004. "But, that isn't to say that the end result isn't what is right," he added.
Writing in the Times, Darling said: "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?"
The former chancellor, who led the negotiations over the £45bn taxpayer-funded RBS bailout, told the BBC Today programme that the government appeared to be "going after individuals" without following due process. He said that while Goodwin was the "author of his own misfortune", he had not been convicted of any crime: "Are we going out after other knights of the realm involved in this? In the House of Lords you've got people who have been to jail but are still allowed to vote."
Darling also warned that the decision to publicly humiliate Goodwin could affect Britain's reputation for business around the world. "We will be in an awful lot of trouble here if we go after people on a whim," he said.
All the main party leaders welcomed the decision, which came about after the prime minister asked the committee to consider Goodwin's knighthood.
David Cameron said "we've ended up with the right decision," while Labour leader Ed Miliband said it was "only the start of the change we need in our boardrooms" and Nick Clegg, the Lib Dem leader and deputy prime minister, said it was the "right" decision.
George Osborne, the chancellor, said Goodwin represented "everything that went wrong in the British economy over the last decade".
There was support for Goodwin from former Formula One world champion Sir Jackie Stewart, who is a friend of the disgraced former RBS boss, although he said he had not spoken to him since the decision. "He's turned all his phones off."
Stewart said he thought Goodwin had been made a scapegoat: "No single person or even any single bank created the biggest financial recession in modern times."
Simon Walker, the director general of the Institute of Directors (IoD), warned that political revelry in the decision risked sparking "anti-business hysteria".
"To do it because … you don't approve of someone, you think they have done things that are wrong but actually there is no criminality … is inappropriate and politicises the whole honours system," Walker told the BBC.
John Mann, the Labour MP for Bassetlaw, said politicians will be "accused of hypocrisy" unless they also take action against disgraced members of parliament and the Lords.
"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.
"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."
Mark Field, the Tory MP for the City of London, said the "song and dance about the knighthood is a sideshow. I'm much more concerned that he's collecting £370,000 a year in pension.
"That was signed off at a time when we knew that most of the so-called profits RBS had achieved over the years of Fred Goodwin's stewardship were in fact entirely illusory."
Michael Fallon, the deputy Tory chairman who sits on the Treasury select committee, said: "This was the biggest bank failure in history … he was the chief executive who ran this bank into the ground.
"The public rightly feel he got away with it scot free. He walked off with this vast pension. We've had this persistent demand from the public as to why this man was allowed to retain this honour that was awarded for services for banking, that can't be right, and I think this independent civil service committee has come up with the right conclusion."
David Fleming of the Unite union, which represents bank workers, said: "It is a token gesture to strip Fred Goodwin of his knighthood, but one which will be well received by the thousands of workers who lost their jobs during his rule. Action from the government is needed in banking reform, not simply empty rhetoric on knighthoods or shareholder
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