Goodwin stripped of knighthood

Jan 31 2012

David Cameron has hailed the decision to complete Fred Goodwin's disgrace by removing his knighthood.

The Prime Minister said a key report into the failure of Royal Bank of Scotland had 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 PM added.

The award was "cancelled and annulled" by the Queen after a key committee found the ex-banker had brought the honours system into "disrepute".

Mr Goodwin received his knighthood for services to banking under the Labour government, before leading RBS to the brink of collapse in 2008.

Honours are usually only removed from individuals who have been convicted and jailed, but announcing the move, the Cabinet Office said the scale of the RBS disaster - necessitating a £45 billion bail-out from the taxpayer - made the case "exceptional".

"Both the Financial Services Authority and the Treasury Select Committee have investigated the reasons for this failure and its consequences," the department said in a statement.

"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."

The decision was also welcomed by Deputy Prime Minister Nick Clegg, while Labour leader Ed Miliband said: "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."