David Cameron ‘backs new bid to strip Sir Fred Goodwin of his title’

DISGRACED banker Sir Fred Goodwin could lose his knighthood, it was reported last night.The Scot, who was chief executive of the Royal Bank of Scotland for nine years, is facing growing calls by MPs from all political parties to have him stripped of the honour.

Prime Minister David Cameron is understood to be “sympathetic” to the demands for Sir Fred to lose his title after he was widely blamed for steering the bank to the brink of collapse in 2008.

It was kept afloat with £45 billion of taxpayers’ money and is still majority owned by the state. Sir Fred was knighted for “services to banking” in 2004.

As a result of a Financial Services Authority (FSA) report into RBS that was highly critical of Sir Fred, it is understood that MPs are now saying he should be referred to the Whitehall committee responsible for examining whether or not a recommendation should be made to the Queen to have an honour revoked.

The FSA’s report said that the former chief executive had been responsible for the expansion of RBS, ending in the £50 billion “gamble” of acquiring Dutch bank ABN Amro in 2007, which led to its downfall.

In the past 14 years the Forfeiture Committee has made 34 recommendations for titles and honours to be revoked.

These have included the Zimbabwean dictator Robert Mugabe, who lost his honorary knighthood in 2008; champion jockey Lester Piggott, who was stripped of his OBE following a conviction for a £2.8 million tax fraud in 1987; and former world boxing champion Prince Nazeem Hamed, who lost his MBE in 2007 after he was convicted for dangerous driving.

Last night, Conservative MP Dominic Raab said: “Honours should be reserved for those who serve, not stuff, the public, so this is a case the committee should look long and hard at.”

Independent Lothian MSP Margo MacDonald agreed: “The honourable thing for him to do would be to hand it back. He has been so lacking in honour.

“If he wants to try to make it up to the people he let down and the communities whose standards of probity and care towards each other he stamped on, then one of the things he could do is give the knighthood back.”

The committee, which is composed of the Cabinet Secretary Jeremy Heywood; the Treasury Solicitor Paul Jenkins QC; the Permanent Secretary to the Home Office, Dame Helen Ghosh and Permanent Secretary to the Scottish Executive Sir Peter Housden, is understood to have discussed the issue of Sir Fred’s knighthood in 2009, but no decision was taken. Liberal Democrat peer Lord Oakeshott described Sir Fred’s position as “untenable”.

He said: “We all know the cost of his services to banking. If ever there was a case for someone to be stripped of his knighthood, it is Sir Fred Goodwin who ran RBS into the ground and cost every taxpayer in this country £40bn and counting.”

Meanwhile, shadow cabinet minister Michael Dugher said: ‘It was wrong that Fred Goodwin was knighted. Most of my constituents in Barnsley think it is outrageous he can dine out on being a ‘sir’ and I am inclined to agree with them.’