Stripping Goodwins knighthood is unhealthy scapegoating

The head of the Scottish Episcopalian Church has added his voice to the chorus of criticism surrounding the decision to strip former Royal Bank of Scotland boss Fred Goodwin of his knighthood.

The Most Rev David Chillingworth said the move “says as much about the Honours system as it does about Fred Goodwin”.

“Stephen Hester gives up his bonus and Sir Fred Goodwin is stripped of his knighthood. But it seems to me that these responses fail to satisfy.

“They feel more like unhealthy scapegoating than an atonement which resolves.”

There had, he continued, been a “rather unsatisfying pursuit of bankers as a substitute for a comprehensive political and social response which would make some clear statements about the kind of society which we are now going to build”.

He said Hester’s pay had been “excessive” and called for “proportionality” to return to the earnings of Britain’s top tier of business leaders.

“I believe that societies in which the gap between rich and poor is smaller tend to be more contented societies. And we have lost that.”

Goodwin was knighted for his “services to banking” in 2004, four years before the bank was saved from collapse by a £45bn taxpayer bailout.

His title was annulled on the advice of the forfeiture committee in a move that has been welcomed by party leaders but denounced by high profile political and business figures.

Prime Minister David Cameron said it was “clear” who was responsible for the failure at RBS, while Chancellor George Osborne said that the bank “symbolised everything that went wrong in the economy over the last decade”.

“Fred Goodwin was in charge and I think it is appropriate that he lose his knighthood,” he said.

Deputy Prime Minister Nick Clegg said it was the “right decision”, while Labour leader Ed Miliband said it was “only the start of the change we need in our boardrooms”.

There was strong criticism however from former Labour Chancellor Alistair Darling, who questioned why the same was not happening to other honoured bankers who had behaved similarly.

“I’m not here to defend Sir Fred … I just think we’re getting into awful trouble here if we go after people on a whim and we don’t have a clear set of principles against which we can judge people, it’s not right,” he told the BBC.

He added: “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?"

Simon Walker, Director General of the Institute of Directors, said: “I am concerned about an anti-business hysteria about the whole situation. There is a well established procedure if people are convicted of criminal offence they are stripped of their honours.”