31 January 2012
It will soon be announced in the London Gazette that the knighthood conferred upon Fred Goodwin as a Knight Bachelor has been cancelled and annulled.
This decision, not normally publicised in advance, was taken on the advice of the Forfeiture Committee, which advised that Fred Goodwin had brought the honours system in to disrepute.
The scale and severity of the impact of his actions as CEO of RBS made this 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.
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.
Notes to editors
1. The Forfeiture Committee is chaired by Sir Bob Kerslake (Head of the Civil Service), and includes Dame Helen Ghosh (Permanent Secretary, Home Office), Paul Jenkins (Treasury Solicitor), Sir Peter Housden (Permanent Secretary, Scottish Government) and Sir Jeremy Heywood (Cabinet Secretary).
2. The Committee met last week and made a recommendation to remove the honour. That recommendation was conferred to the Sovereign by the Prime Minister.