Somewhere along the line bankers got greedy. Maybe they always were, who knows, but at least back then they were not able to award themselves massive pay hikes. Neither was the gap between those at the top and front-line banking staff such a huge divide. Yes, those at the top were paid extremely well but in recent years pay at the top has grown out of control.
So the news that Sir Fred Goodwin, former head of troubled UK bank RBS, is to be stripped of his knighthood is good news then? Well not really.
Fred as he must now be called received a knighthood in 2004. Knighthood's are issued by the Queen or head of state in the UK but they are decided by the government of the day. Each political party when it is in office attempts to make plenty of peers from their own political persuasion. In other words a Labour government will create new Labour peers and the Tories will create new Conservative peers. It is always handy for the government in the UK to have like minded individuals with a seat in the House of Lords. By no means the best option nor a truly fair state of affairs but currently it is what it is. Reforms have been attempted but as yet they have had little impact on tradition.
Sir Fred Goodwin received his knighthood when the Labour party was in power in the UK. He was awarded it for the apparent success of RBS. Between the year 2000 and 2008, according to Wikipedia, RBS became the world's largest company with assets of £1.9 trillion. Then the bubble burst.
RBS and Goodwin fell back to earth with a damaging bump. On October 11, 2008, Fred resigned from RBS, just before the proverbial hit the fan. Goodwin announced that he would take early retirement, effective from 31 January 2009. This was done one month before RBS announced that its 2008 loss totalled £24.1bn. This remains the largest annual loss in UK corporate history.
So he got out while the going was good and took with him a very generous pension package. A pension of approximately £700,000 per year. Not bad, not bad at all, especially when you consider that now, February 1, 2012, Fred is still only aged 53. Add to this the fact that he was only in control of RBS for around nine years and it is easy to see why so many people feel it was in fact obscene. Fred has become a symbol for all the banking ills in the UK and for what is wrong with the current banking system. He was verbally abused and his house and vehicle damaged. He incensed people when he flatly refused to give any money back to RBS.
An internal inquiry found however that Goodwin had not been guilty of wrong doing. His pension was reduced though. One report claims, "his pension was reduced to £342,500 a year from the £650,000 set in February 2009 after he took out an estimated £2.7m tax-free lump sum".
All in all the Fred Goodwin saga proved a cautionary tale. As the BBC reported his actions led to RBS having to be bailed out to the tune of £45bn in taxpayer money. In general all the main political party leaders in the UK were in agreement that the decision to strip Goodwin of his knighthood was correct. However he did not actually commit a crime. He was never tried and found guilty of anything. This makes some people in the UK uneasy. It begins to look like a witch hunt, or should that be a Bankers hunt?
In what is a rare move, the Queen cancelled and annulled the title of Sir Fred Goodwin following Whitehall advice. A Cabinet Office spokesperson said, "The scale and severity of the impact of his actions as CEO of RBS made this an exceptional case. 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."
On the surface this may sound right and proper but what of others who have been knighted?.
The forfeiture committee, whose members include the cabinet secretary, the top civil servant at the Home Office, the top lawyer at the Treasury and the top official in the Scottish government, decided to recommend that Fred was stripped of his knighthood. The Queen has sole authority but she tends to do what ministers ask. So who else has been stripped of a knighthood in the past?
- Former spy Anthony Blunt was stripped of his knighthood in 1979 for the treachery of supplying hundreds of secret documents to the Soviets while a wartime agent for MI5.
- English jockey Lester Piggott was stripped of an OBE after he was jailed in 1987 for tax fraud.
- A former head teacher who was made a dame for services to education had her honour revoked, two years after being found guilty of misconduct.
- Jean Else, 59, was given the title in 2001 after transforming Manchester's Whalley Range High School. She was banned from running a school in 2009 by the General Teaching Council after a misconduct hearing.
- Former world boxing champion Naseem Hamed was stripped of his MBE after being jailed over a high-speed crash in his sports car, which left the person in the other car with fractures to every major bone in his body.
- Jack Lyons, one of the so-called Guinness Four who were convicted in 1990 of illegally boosting the price of shares four years earlier, was stripped of his knighthood.
- Joseph Jonas, the former Lord Mayor of Sheffield, was stripped of his knighthood in 1918 after being convicted of a misdemeanour, relating to contacts with a German a year before World War I.
- Irish-born colonial officer Roger Casement forfeited his honour when he was convicted of treason for aiding those involved in Ireland's 1916 Easter Rising and executed.
- The Queen annulled Zimbabwean President Robert Mugabe's honorary Knighthood in 2008.
- Romanian dictator Nicolae Ceaucescu and Italy's Fascist leader Benito Mussolini were also stripped of honorary knighthoods.
Definitely a mixed bag. A rogue's gallery. It does seem odd that Fred Goodwin received the honour in 2004 and was stripped of it in 2012. What new evidence has led to this? Nothing? Is it simply a case of jumping on the bandwagon of bashing bankers?
Looking at the list above, sourced from the BBC, it does seem that going back in time is not unique. In some ways it does seem also to be fitting. However it leaves a few unanswered questions. What about other Peers who are far from whiter than white?
What about Tory peer Sir Jeffrey Archer? If consistency is not the order of the day doesn't the outdated UK honour system risk becoming a joke?