FRED Goodwin was stripped of his knighthood last night, three years after Royal Bank of Scotland was saved from collapse by a £45bn taxpayer bailout.
The former chief executive, who was knighted for “services to banking” in 2004, lost the title after a committee of civil servants decided he had brought the honours system into disrepute. The Cabinet Office broke with convention by publicising its verdict on Goodwin and said the “scale and severity” of his actions at RBS made his case “exceptional”.
“The failure of RBS played an important role in the financial crisis of 2008-09... Fred Goodwin was the dominant decision maker at RBS.”
Goodwin steered the bank to a £24.1bn loss in 2008, the largest in British corporate history, and later faced damning criticism in a report by the Financial Services Authority.
Yesterday David Cameron backed the decision, saying: “The FSA report into what went wrong at RBS made clear where the failures lay and who was responsible.”
Labour leader Ed Miliband said: “It is only the start of the change we need in our boardrooms.”
The decision will also distract attention from Stephen Hester, Goodwin’s successor, who gave up a bonus worth nearly £1m on Sunday.
Goodwin had appeared increasingly likely to lose his honour after Sir David Walker, a member of the independent panel which supervised the FSA inquiry, last week told MPs the findings amounted to a “censure”.
Goodwin had transformed RBS from a middle-ranking player to a corporate giant through a series of bold acquisitions but his purchase of Dutch bank ABN Amro was a disaster.
The loss of Goodwin’s knighthood, which cannot be appealed, marks the latest humiliation for the man whose cost-cutting won him the nickname “Fred the Shred”. He briefly fled to France in 2009 after an attack on his Edinburgh home, and agreed to cut his pension to £342,500 per year.
RBS and Goodwin declined to comment. Last night, however, ex-racing driver Sir Jackie Stewart, who has worked as an ambassador for the bank, defended Goodwin, saying it “wasn’t one man” who caused the recession. The Institute of Directors warned of an “anti-business hysteria”.
Only a few dozen people have been stripped of honours in the past 20 years, including Robert Mugabe, spy Anthony Blunt and former Romanian dictator Nicolae Ceausescu.
