Matthew Hancock: It was right to take away Fred Goodwin's knighthood |

Tuesday 31st January 2012 | 19:29

Matthew Hancock: It was right to take away Fred Goodwin's knighthood

Writing exclusively for PoliticsHome, Conservative MP Matthew Hancock explains why it was right to strip former RBS boss Fred Goodwin of his knighthood.

I believe the Forfeiture Committee have made the right decision. Fred Goodwin broke one of the biggest banks in the world and left the British taxpayer to pick up the bill.

If we are to maintain the integrity of our honours system, we must be prepared in exceptional circumstances to take honours away. Indeed the strongest supporters of the honours system should be the ones who support removing honours from those who no longer deserve them.

It was wrong of Labour to grant Mr Goodwin the knighthood for ‘services to banking’, in their self-styled age of irresponsibility. Goodwin grew RBS at a pace that was unsafe, and did nothing to protect it in case things turned down. Only four years after the sword touched his shoulder, RBS was bust.

Why strip the honour? Consider Goodwin’s fatal decision to push ahead with the acquisition of Dutch bank ABN AMRO in October 2007. ABN was severely exposed to US subprime mortgage debt and losses from the deal eventually crippled RBS. The pursuit of this exceptionally complex banking takeover, just after the onset of the credit crunch was later described by the FSA as a ‘gamble’. The FSA said due diligence on ABN amounted to ‘two lever arch folders and a CD.’ It was a gamble which brought down a 300 year old business and cost the country £45 billion.

But Goodwin’s failure as a manager goes beyond any single action. From the FSA’s subsequent investigation we can see that Goodwin presided over a business culture in which Goodwin was always right. It meant that decisions went unchallenged, that bigger was always better, whatever the risk. Even as Alex Salmond and Gordon Brown cheered him on, it is now clear that Goodwin’s breakneck expansion of RBS in the years before the crash was unsustainable and contributed directly to the bank’s collapse.

Of course stripping Fred Goodwin of his title doesn’t solve the problems he caused while chief executive of RBS, but it does mean an important principle has been upheld and one which matters deeply to the British people: the principle of just rewards. The honours system should recognise those who make great contributions to our society, not those who take from it and walk away.”

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Matthew Hancock: It was right to take away Fred Goodwin's knighthood

Writing exclusively for PoliticsHome, Conservative MP Matthew Hancock explains why it was right to strip former RBS boss Fred Goodwin of his knighthood.

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