Alf Young: As the Establishment takes its revenge, it’s time to ponder on a title’s strange allure

The knighthood conferred on Fred Goodwin in 2004 had, said the Cabinet Office, been “cancelled and annulled”. My copy of Chambers dictionary tells me, right off, that to cancel is to annul.

No-one was breaking the sword that conferred the title on him over his trembling knee. But, as he himself might have done in those infamous morning briefings with his senior executive team at RBS, Mr Goodwin was being left in absolutely no doubt that he was the one in the frame yesterday.

The way he had led his bank to its corporate knees and cost the state billions in a rescue mission had put him beyond the pale of what polite society could possibly stand.

The British establishment is having its revenge. Senior civil servants on the forfeiture committee, knights and dames all, had deliberated. Like the dictators Robert Mugabe and Nicolae Ceauscescu and the spy Anthony Blunt before him, the former CEO of Royal Bank of Scotland had “brought the honours system into disrepute”. Her Majesty had been consulted. So it will be plain Mr Goodwin from now on.

There will be millions of ordinary citizens, almost all of whom never get a whiff of even an MBE, who will say “About time too!”. They may have lost their jobs or some of their savings as a result of the great banking crash of 2008. They may simply have suffered as severe a squeeze on their living standards as they can ever remember.

Many despise bankers in general. They knew someone had to be to blame for the mess we are in. And Mr Goodwin, never a City insider even in the boom years when RBS was growing like topsy, had the visibility to make the perfect scapegoat. There were plenty of other peers adorning not just the Royal board, but those of Bank of Scotland, HBOS and Lloyds, where we as taxpayers have since had to play the rescue fairy.

However as a scapegoat, Mr Goodwin could not be bettered. He was Fred the Shred, who was never very forgiving of the fallibilities of others around him. He was a man who could never say sorry and look as if he really meant it. And there he is now, upholstered with an eye-wateringly large pension after barely a decade of service at the Royal.

They say the prime minister himself was orchestrating this act of official vengeance. David Cameron, having been caught flat-footed by opposition calls for Mr Goodwin’s successor, Stephen Hester, to be stopped from getting his bonus, was certainly in need of some signal that he knows how to sort bankers out when they go off the rails.

The inconvenient reality is that Mr Goodwin stands convicted of nothing, not even professional misconduct.

The recent Financial Services Authority’s report into the RBS debacle censured itself, but had nothing to say about any failings on the part of the Royal’s former boss.

It later emerged that Goodwin’s lawyers had put pressure on to remove from the report a criticism of Mr Goodwin’s relative lack of banking experience. But that’s not a hanging offence.

There may be some short-term political gain in this decision. But the bigger loser, by far, could be the honours system itself.

I have always regarded it as a quaint anachronism we would all be better without. Over three decades writing about business I was constantly amazed by how much energy senior business figures spent chasing their K.

Perhaps if more of them lost them again, the whole charade might lose its lustre. Chance would be a fine thing.