Former RBS chief executive Fred Goodwin who has had his knighthood cancelled and annulled

THE decision to strip former Royal Bank of Scotland chief executive Fred Goodwin of his knighthood has split the worlds of both business and politics. What do you think?

Sir Fred Goodwin’s knighthood was “cancelled and annulled” by the Queen on Tuesday after a committee of senior civil servants found the ex-Royal Bank of Scotland (RBS) boss had brought the honours system into “disrepute”.

Prime Minister David Cameron said it was the “right decision”, while Chancellor George Osborne insisted Mr Goodwin represented “everything that went wrong in the British economy over the last decade”.

Labour leader Ed Miliband said the punishment was “only the start of the change we need” in boardrooms, but some Tory MPs expressed concern about the extent of political influence on the City.

And Labour former Chancellor Alistair Darling today described the move as “tawdry”, expressing distaste at the way Mr Goodwin had been singled out by the Government while other senior figures escaped punishment.

Writing in The Times, Mr Darling, who as chancellor led negotiations over the RBS bailout, insisted: “There is something tawdry about the Government directing its fire at Fred Goodwin alone; if it’s right to annul his knighthood, what about the honours of others who were involved in RBS and HBoS?”

However, Lord Oakeshott, a Liberal Democrat peer and former Treasury spokesman, said that removing Mr Goodwin’s knighthood was “the right thing to do”. “It is symbolic, but he cost every taxpayer in this country £1,500, which we could well do with now,” he said.

“The collapse of Royal Bank of Scotland cost tens of thousands of businesses their future, and hundreds of thousands of people their jobs, it’s understandable that people are angry, and it’s understandable that it sticks in their throat, or did, to see Sir Fred still with this honour, but what really matters now is making today’s bankers behave and do their job.”

A spokesman for business lobbying group the CBI said: “The business community will understand the Queen’s decision to take away the knighthood awarded to Fred Goodwin for services to banking in 2004. Such an annulment is exceptional but unsurprising, given all of the circumstances.”

However, Simon Walker, director general of the Institute of Directors, said he was concerned about “anti-business hysteria”.

He told BBC News: “I don’t approve of the decision to strip Fred Goodwin of his knighthood. I don’t think it’s a business issue, I think it’s an honours system issue. There’s a well established practice where if people are convicted of a criminal offence, they lose their honours that they’ve been granted; that’s historic and that is appropriate.

“To do it because you don’t like someone, you don’t approve of someone, you think they’ve done things that are wrong, but actually there’s no criminality, alleged or charged, I think is inappropriate and politicises the honours system.”

Mr Goodwin received his knighthood for services to banking under the Labour government, before guiding RBS to the brink of collapse in 2008.

Honours are usually only removed from individuals who have been convicted and jailed, but the Cabinet Office said the scale of the RBS disaster, necessitating a £45 billion bailout from the taxpayer, made the case “exceptional”.

The Forfeiture Committee, made up of senior civil servants, met last week to consider the issue. Its recommendation to strip Mr Goodwin of the honour was conveyed to the Queen by the Prime Minister.

David Fleming, national officer of Unite, said: “It is a token gesture to strip Fred Goodwin of his knighthood, but one which will be well received by the thousands of workers who lost their jobs during his rule.

“Nonetheless this will do nothing to bring job security to the staff across the banking sector who continue to work under a culture of excess and greed at the top. Action from the Government is needed in banking reform, not simply empty rhetoric on knighthoods or shareholder activism.”