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What’s the point of stripping Sir Fred Goodwin of his knighthood? | Michael White

This campaign is a distraction. Untainted knights giving up their honours in disdainful protest would be more effective

When Anthony Blunt, the distinguished art historian and official surveyor of the royal collection, was exposed as a long-standing Soviet agent by Margaret Thatcher in 1979, there was a successful campaign to strip him of his glittering public honours, including the old brute’s knighthood. Yet MI6 had been in possession of Blunt’s confession for 15 years and officials at Buckingham Palace had joked about “our Russian spy” as early at 1948. It suited the intelligence community to keep him in place, dusting the Queen’s pictures. Only when the public found out did many of his old friends – not all – turn on him and join the stoning.

A similar public charade is now being orchestrated against Sir Fred Goodwin, ex-mastermind behind the Royal Bank of Scotland’s (RBS) emergence as a global player and also of its subsequent collapse. Goodwin had come to embody all that now looked wrong with UK investment banking when financial crash came in 2007-8. Yet there had been grumblings in the City for several years, scepticism openly albeit guardedly voiced (big banks retain aggressive law firms to stifle criticism), long before RBS’s fateful and reckless takeover of ABN Amro in 2007. Barclays, which it beat in a dirty battle, survived as a result and now lectures supposedly less prudent rivals.

“Why did we ever knight Sir Fred?” asks the Daily Mail. Because he was regarded as a genius by the “light touch” regulation morals of the period – including by the City which was making pots of money; by the chancellor and architect of the new regulatory structure, Gordon Brown (making pots of income tax revenue to fund his anti-poverty plans); by the Tories; and by most of Fleet Street. What’s new?

There is a wearily familiar pattern to this. Robert Maxwell was a titan until his pension fraud was posthumously unearthed, doubts submerged in the interests of making money. If Rupert Murdoch had ever been interested in the baubles of knighthoods and peerages, which he isn’t, would there now be a clamour for Lord Dirty Digger to be stripped of his peerage? You betcha. We know because a campaign has been waged for years to strip Jeffrey Archer of his peerage, via disreputable retrospective legislation if necessary (it failed to pass before the last election), because of his conviction for perjury and jail sentence. Yet plenty of people harboured doubts about Archer’s suitability – which may explain why it took so long to get that peerage.

High finance, with its regular booms and busts, is particularly vulnerable to charlatan reputations that go bust – taking innocent investors’ savings with it while the culprit escapes. So it is a tempting response to take away awards from people whose feet of clay have subsequently been revealed. As Patrick Wintour reports, David Cameron has breached protocol to let it be known he has asked an obscure Whitehall body called the forfeiture committee (its own members gong-laden types whose honours are quite safe from failure) to think about de-knighting Goodwin. Some 34 people have suffered that fate since 1995, including Zimbabwe’s Robert Mugabe.

But what’s the point? Should the knights who chaired the RBS board and other City institutions that could have called time on Goodwin lose their honours too? If not, why not? They took their pay but did not exercise their judgement. Where do we stop? It might be far more effective if untainted knights sent theirs back in disdainful protest at having to share a gong with snout-in-trough types like Sir Fred. John Lennon sent back his MBE – as recipients occasionally do.

With the Mail leading the charge, the debate strikes me as a distraction from more substantial issues. In his speech, David Cameron condemned Labour’s “Faustian pact with the City” – one he and George Osborne largely endorsed at the time, urging even less regulation – and promised to build a more responsible capitalism. Well, good for him. But as Nils Pratley says, there wasn’t much by way of explaining how we will all get there, let alone about how unwarranted executives bonuses will be curbed, or even how a more competitive market economy will come about.

That raises another striking omission. How many UK bosses and staff in the financial sector – some of whose judgments have cost the taxpayers billions and pushed many taxpayers into unemployment and poverty – have been charged with any form of illegal activity? None, the last time I looked. In the US, around 60 errant executives have either been convicted or charged. But then, the US has run a tougher regulatory regime for a century or more, one which eventually comes down hard on at least some of the big fish.

In this January’s New Year honours list, disgraced tycoon Gerald Ronson got a CBE for his legitimate and longstanding services to charity – despite serving six months and being fined £5m for his part in the Guinness/Distillers share price scam in 1990. But Fleet Street cheered the award all the same – the very people who will be first to demand he hand it back if Ronson CBE ever falls from grace again.

Most honours nowadays are usually awarded to ordinary people for unsung good works, but the big awards go to people society approves of at the time. Rather than the modest satisfaction of taking them back, would a more substantial punishment be more appropriate – even if it’s harder to achieve? The peerage has not collapsed because Lord Archer did porridge. © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds