Fred Goodwin and gesture politics

There are growing calls for Fred Goodwin, former chairman of RBS whose extravagant remuneration while presiding over a failing bank has become a powerful symbol of the excesses that led to the 2008 market crash, to be stripped of his knighthood.  Even the Conservative Party, not known for its willingness to deprive bankers of the spoils of failure, has jumped on this bandwagon (if only to point out that it was Labour who knighted him).

It’s an easy, populist move.  Outrage can be expressed and the decent thing can be seen to be done.

But it’s irrelevant.  The point about Goodwin is not that he had his snout in the trough while his bank failed, but that he is one of hundreds who did so – and continue to do so.  There’s a particular poignancy in the generation that were told by Thatcher to take out private pensions in the 1980s as the key to a prosperous old age now finding themselves struggling while the people who gambled away their pensions continue to prosper – and indeed enjoy the active support of politicians like Boris Johnson, who appears to believe that the sole purpose of the Mayor of London is to promote the interests of banking and finance.  Cameron makes a stand at Brussels against the proposal to write austerity economics into the EU constitution, not on behalf of the people whose lives would be affected by it, but to protect his friends in the City of London.  The Conservative Party remains overwhelmingly a party bankrolled by bankers and financiers.

Against this background, it’s worth remembering that Goodwin’s conduct, while reprehensible, does not appear to have been illegal. This contrasts with the activities of Lord Archer, who served a prison sentence for perjury, or Lord Hanningfield, who served a prison sentence for fiddling his House of Lords expenses.  Both continue to hold their titles, and in the case of Archer retain the Conservative whip.  Lord Taylor is suspended from Parliament but keeps his title.  Evidently there is no overriding principle that criminals forfeit their honours; it seems inconsistent that a man who remained within the law should do so.

This, then, is gesture politics. By removing Fred the Shred’s knighthood, Cameron and his allies can be seen to be doing something, while in fact doing nothing to deal with the root causes of what went wrong in 2008.  Cameron is in effect signalling business as usual to the City, and reminding them that the real offence is getting found out. It gives the illusion of action while avoiding calls for real reform.

The honours system has long been the whited sepulchre of the British establishment.  It evidently has not outlived that usefulness.




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