1072

THE WEEKLY WORLD EDITION OF The Daily Telegraph AND The Sunday Telegraph

February 8 - 14 2012 No. 1072

telegraph.co.uk/expat

The Telegraph

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By Robert Winnett and Rowena Mason FRED GOODWIN was stripped of his knighthood on Tuesday last week after a political campaign to see the former head of the Royal Bank of Scotland punished for his role in the financial crisis.

bankers’ bonuses. Mr Goodwin, nicknamed “Fred the Shred” for his cost-cutting approach, joins a small group of discredited people including Anthony Blunt, Robert Mugabe and Lester Piggott who have been stripped of honours by the secretive Whitehall forfeiture committee.

A Whitehall committee of senior civil servants ruled that he was an “exceptional case” and precedent should be overridden.

Mr Goodwin lost his honour for “services to banking” despite not having been convicted of any criminal offence, nor having been professionally censured, the normal requirements for annulling a knighthood, CBE, OBE or MBE.

RBS had to be rescued by the Government in 2008 following a series of disastrous decisions that saw it take on assets worth more than £2 trillion and brought it to the brink of collapse. After an investment of more than £45billion of taxpayers’ money, the bank is now 80 per cent owned by the state.

The forfeiture committee had resisted earlier calls to annul Mr

Goodwin’s honour in 2009.

The leaders of all three main political parties had called for his knighthood to be reconsidered, and last week’s announcement came days after Stephen Hester, Mr Goodwin’s successor at RBS, bowed to political pressure and surrendered a £963,000 bonus.

INSIDE Stephen Hester waives £1m bonus p4 Editorial comment p19

In a statement, the Cabinet Office said of last week’s rethink: “This decision, not normally publicised in advance, was taken on

The adoption of a new, more inclusive capitalism has become a dominant political theme in recent weeks, with David Cameron under increasing pressure to rein in City rewards.

Politicians called for Mr Goodwin also to lose his pension of more than £300,000 a year and for other City figures to lose their honours. Some in the City described the announcement as a “sideshow” that threatened attempts to rebuild the economy, and one executive described the decision, which was formally approved by the Queen, as “bowing to the mob”.

There are fears that it could undermine London’s international standing in the wake of the row over the advice of the forfeiture committee, which advised that Fred Goodwin had brought the honours system into disrepute.

“The scale and severity of the impact of his actions as chief executive officer 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 2008-09 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

Continued on page 4

IPP/RAF

AB

MALTHOUSE

ANDY

SGT

Prince William, left, and crew prepare for their first sortie; below, in a briefing

PRINCE WILLIAM took to the skies over the Falkland Islands last Saturday at the start of a controversial six-week tour of duty as an RAF search and rescue helicopter pilot, nearly 30 years after the Argentine invasion.

Flt Lt Wales, as he is known, is on a tour of duty the Ministry of Defence insists is routine. But his presence on the islands, with the release of photographs of him at work, comes at a moment of heightened tension between Britain and Argentina.

The Navy has dispatched one of its most advanced warships, HMS Dauntless, to the region and on Saturday it was also reported that David Cameron authorised a nuclear submarine to patrol the waters.

Argentines have burnt British flags in protest at the Duke’s arrival, and his deployment to the Falklands triggered outrage from Buenos Aires ahead of the

30th anniversary in April. Regret was expressed that an heir to the throne would arrive in “the uniform of a conqueror”.

But it is the prospect of an oil bonanza in the waters off the Falklands that is really fuelling the anger of Cristina Kirchner, the Argentine president, who has made the islands her top foreign policy priority.

Tensions increase: page 6

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