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Not a good knight for Fred

Taxpayers still haven’t woken up from the nightmare that is the RBS bailout. Protecting the dignity of the man who oversaw much of this is the last thing in the world we should be worried about

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Fred gave the two fingers to the taxpayer, so why should we shed any tears?
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Emma Boon
On 1 February 2012 14:04

I can’t imagine Mr Fred Goodwin slept too soundly last night. Despite a generous pension cushioning the blow of the withdrawal of his Knighthood, it will still be humiliating to become a plain old Mister again and he will have woken up (if he slept at all) to see his own name on the front of most newspapers.

But the fuss will die down. He’ll get round to changing the name on his bank cards. The whispers and accusing glances in the pub will eventually stop and slowly, life will return to normal. The same cannot be said for taxpayers and the bank he left behind him.

Goodwin was at the helm of RBS when it collapsed; many of the decisions that he made directly contributed to it being bailed-out by taxpayers. It is because of his actions that every family in Britain is down £500; taxpayers are still paying for his mistakes.

Mr Fred Goodwin was not the only man responsible for the collapse of RBS. However, he was one of the most high profile. News pictures of him in a car, grinning and chatting on his phone were beamed around the world. He seemed unapologetic for his actions and refused to hand back an enormous pay off that he had received when he left RBS. He did nothing to ingratiate himself after the disaster.

If we are going to have an honours system at all it has to mean something. A Knighthood should reflect an outstanding contribution to society; it shouldn’t be given as a political reward. Goodwin was knighted for ‘services to banking’ and it would be unconscionable for him to walk around with his enormous pay off and the generous pension he secured, calling himself Sir, whilst taxpayers are still picking up the pieces after the RBS bailout. 

As the Honours Forfeiture Committee statement said, he “had brought the honours system into disrepute”. The committee should not be led solely by popular opinion but it cannot ignore it.

This morning many people were asking “who’s next”? We don’t need a hysterical re-assessment of anyone who has ever received an honour but we do need to be vigilant about of the behaviour of those who have titles conferred on them.

Lord Hanningfield, for example, was sent to jail for fiddling his expenses. It’s bad enough that he seems relatively unremorseful for his actions, worse still that he retains his title and could return to sit in the Lords, making new laws having been seemingly incapable of adhering to old ones. Few taxpayers would shed a tear if the man who lied and stole from taxpayers once again became plain old Paul White.

Some commentators have called this a witch hunt and fear that this could scare off businesses as it comes so soon after the public outcry over Stephen Hester’s bonus. But taxpayers wouldn’t even have had to worry about that bonus if we didn’t own most of RBS.

Once the bank is out of government hands then they can pay Hester whatever bonus they like as long as the shareholders are happy. With the bank still owned by taxpayers – who can’t sell their shares if they’re not happy – it is very hard to justify. City AM editor, Allister Heath, points out “there is nothing anti-business or anti-capitalist in cracking down on rewards for failure”. We need to encourage proper capitalism and that should mean that when a bank fails it should go under.

Taxpayers still haven’t woken up from the nightmare that is the RBS bailout. Protecting the dignity of the man who oversaw much of this is the last thing in the world we should be worried about. Stripping him of his knighthood won’t make the problem go away but it is an important and symbolic gesture.

Emma Boon is Campaign Director at the Taxpayers' Alliance. She tweets at @emmaboon

Read more on: Emma Boon, Tax Payers' Alliance, Fred Goodwin stripped of knighthood, Fred Goodwin has cost every family in Britain £500, Royal Bank of Scotland, Lord Hanningfield, Allister Heath, and City AM
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