Ex-RBS chief may lose title after PM steps in

The disgraced former banker was granted the award for “services to banking” in 2004 but yesterday the Prime Minister said it was “right” the issue be looked at after Sir Fred was heavily criticised over the bank’s collapse.

Mr Cameron’s comments came after he delivered a speech on “responsible capitalism”, in which he defended the market and free enterprise as “the best imaginable force for improving human wealth and happiness”. But he admitted some reforms were needed to ensure everyone has a chance to benefit from them.

Responding to questions about Goodwin’s knighthood, Mr Cameron said: “I think it is right that there is a proper process that is followed for something of this order. There is a forfeiture committee in terms of honours that exists and it will now examine this issue. I think it is right that it does so.”

Calls for the former RBS boss to be stripped of his knighthood were made by 11 MPs, peers and members of the Scottish Parliament in the Daily Mail yesterday.

Conservative MP Matthew Hancock, one of the 11, said: “No one has ever presided over a bigger corporate disaster that has had implications for every single family in Britain than Fred Goodwin.

“The knighthood given to him by (then chancellor) Gordon Brown is inappropriate for someone who was reckless at the helm of one of Scotland’s oldest institutions.”

During his speech in London, Mr Cameron accepted the public had lost much of their confidence in the capitalist economy.

But he said: “We won’t build a better economy by turning our back on the free market. We’ll do it by making sure that the market is fair as well as free.

“I want these difficult economic times to achieve more than just paying down the deficit and encouraging growth.

“I want them to lead to a socially responsible and genuinely popular capitalism. One in which the power of the market and the obligations of responsibility come together.

“One in which we improve the market by making it fair as well as free, and in which many more people get a stake in the economy and share in the rewards of success.”