Sir Fred is set to lose his knighthood

Tim Wallace
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SIR Fred Goodwin looks set to lose his knighthood, after the Prime Minister said the former Royal Bank of Scotland chief executive had been referred to a panel with the power to strip him of the honour.

David Cameron said the Honours Forfeiture Committee would look at “what went wrong at RBS” and “who was responsible”. A highly critical report authored by City watchdog the FSA would also be taken into account, he said.

Goodwin was honoured for services to banking in 2004, but five years later RBS nearly collapsed in the wake of the biggest ever annual loss in British corporate history.

If he does lose the honour, he will join the likes of Zimbabwean dictator Robert Mugabe, as well as convicted criminals such as tax fraudster jockey Lester Piggott and dangerous driver Prince Naseem Hamed.

The former bank boss caused controversy by refusing to hand back his £700,000 a year pension, although he did eventually agree to cut it to £342,500 per year.

Shadow chancellor Ed Balls said “there will be no complaints from the Labour Party” if the title is removed.

Liberal Democrats also welcomed the announcement. “The thousands of other people who deserve the honours they have been given are tarnished by the fact that Fred Goodwin still has his knighthood,” said Lib Dem MP Lorely Burt.

“Honours are bestowed on individuals who have given up their time to work for the public good – if he is allowed to keep his, it devalues the good work of others.”

However, Mark Field, the MP for the Cities of London and Westminster, said he was concerned the real problems with Sir Fred’s “rewards for failure” are still not being addressed.

“The public will be far more concerned that Fred Goodwin has a huge pension for the rest of his life than about this bauble of a knighthood,” he said.

“His very lucrative pension deal is a much more egregious example of rewarding those at the top no matter what they have done, which the Treasury – under a previous administration – signed off.”

In a speech designed to step up the government’s anti-bank rhetoric ahead of the politically-sensitive bonus season, Cameron confirmed the cash element of bonuses at state-owned banks will remain capped at £2,000 and said current RBS boss Stephen Hester would collect a smaller bonus than last year.