Fred Goodwin stripped of knighthood

The former head of RBS has been stripped of his title.

Sir Fred Goodwin, former head of the Royal Bank of Scotland and national hate figure, is to be stripped of his knighthood.

Following advice from a panel of civil servants, the Queen has cancelled and annulled his title, which was awarded to him by the Labour government in 2004 for "services to banking".

Goodwin has been blamed for the collapse of RBS, where he was chief executive from 2001 to 2008. He pursued aggressive strategies in corporate lending and investment banking, and his high-risk acquisition of Dutch rival ABN Amro in 2007 -- at the height of the crisis -- meant that RBS had to be bailed out with £45bn of taxpayer money.

He certainly did himself no favours, refusing to apologise or to return any of his £16.9m pension. (After months of pressure from the public and politicians, he eventually agreed to give up a third of it).

Generally, people are only stripped of honours if they have committed a serious crime or been struck off by their professional register. This could be seen as vindication for those -- such as the makers of Inside Job -- who are incredulous that not a single banker has faced criminal charges for their role in the crash.

It would certainly be hard to argue that Goodwin deserves to keep his knighthood -- his actions led to thousands of job losses at RBS, and he played a part in bringing the economy to its knees. But for all the satisfaction of this moment, it is worth remembering that Goodwin did not act in isolation. Indeed, as my colleague Mehdi Hasan pointed out this month, Jon Varley of Barclays was engaged in a bidding war with Goodwin for ABN Amro - had he been successful, rather than Goodwin, we might have had ended up with a very different hate figure. Nor is "Fred the Shred" the only banker to have been given an honour by the last government.

Coming in the same week as Stephen Hester, Goodwin's successor, was forced to refuse his bonus package, this would seem to indicate that the tides are turning against the bankers. But, as I argued last week, this type of gesture politics does nothing to tackle the underlying structural problems which allow sky-high remuneration in the financial sector to continue unabated.

Samira Shackle is a freelance journalist, who tweets @samirashackle. She was formerly a staff writer for the New Statesman.

Photo: Getty
Show Hide image

Can Philip Hammond save the Conservatives from public anger at their DUP deal?

The Chancellor has the wriggle room to get close to the DUP's spending increase – but emotion matters more than facts in politics.

The magic money tree exists, and it is growing in Northern Ireland. That’s the attack line that Labour will throw at Theresa May in the wake of her £1bn deal with the DUP to keep her party in office.

It’s worth noting that while £1bn is a big deal in terms of Northern Ireland’s budget – just a touch under £10bn in 2016/17 – as far as the total expenditure of the British government goes, it’s peanuts.

The British government spent £778bn last year – we’re talking about spending an amount of money in Northern Ireland over the course of two years that the NHS loses in pen theft over the course of one in England. To match the increase in relative terms, you’d be looking at a £35bn increase in spending.

But, of course, political arguments are about gut instinct rather than actual numbers. The perception that the streets of Antrim are being paved by gold while the public realm in England, Scotland and Wales falls into disrepair is a real danger to the Conservatives.

But the good news for them is that last year Philip Hammond tweaked his targets to give himself greater headroom in case of a Brexit shock. Now the Tories have experienced a shock of a different kind – a Corbyn shock. That shock was partly due to the Labour leader’s good campaign and May’s bad campaign, but it was also powered by anger at cuts to schools and anger among NHS workers at Jeremy Hunt’s stewardship of the NHS. Conservative MPs have already made it clear to May that the party must not go to the country again while defending cuts to school spending.

Hammond can get to slightly under that £35bn and still stick to his targets. That will mean that the DUP still get to rave about their higher-than-average increase, while avoiding another election in which cuts to schools are front-and-centre. But whether that deprives Labour of their “cuts for you, but not for them” attack line is another question entirely. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to domestic and global politics.

0800 7318496