Fred Goodwin has knighthood ‘cancelled and annulled’

THE former chief executive of the Royal Bank of Scotland, Fred Goodwin, has had his knighthood ‘cancelled and annulled’ by the Queen, following advice from Whitehall officials.

Sir Fred was knighted in 2004 by the then-Labour government for “services to banking”, but was criticised after leading the bank to near-collapse in 2008.

The Cabinet Office said the knighthood had been removed on the advice of the Forfeiture Committee because Mr Goodwin had brought the honours system “into disrepute”.

It said his record as chief executive of RBS, which had to be bailed out by taxpayers in 2008, meant it was “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 and payments system. Subsequent increases in Government capital have brought the total necessary injection of taxpayers’ money in RBS to £45.5bn,” the Cabinet Office said in a statement.

“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 2008-9 which, together with other 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 concern about Fred Goodwin’s decisions meant that the retention of a Knighthood for ‘services to banking’ could not be sustained.”

Both the Prime Minister David Cameron, and the leader of the Labour Party Ed Miliband had called for Sir Fred to be stripped of his knighthood, which comes barely days after current RBS chief executive Stephen Hester, and RBS chairman Sir Philip Hampton both waived bonuses of over £1 million.

David Fleming, Unite 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 Queen is said to have rescinded the knighthood following advice from Whitehall officials, as she has the sole right to revoke honours.