Sir James Crosby: Downing Street refuses to back calls to strip man blamed for HBOS failure of his knighthood

The man branded as the architect of HBOS's disastrous strategy is set to keep his knighthood, it emerged today.

Officials said the Prime Minister would not get involved in calls for the former HBOS chief executive Sir James Crosby to lose the honour, and that this was a decision for the Forfeiture Commission. David Cameron also failed to back calls for Sir James to give up part of his pension.

The statements stand in contrast to Mr Cameron's actions in January last year when he told MPs that the committee would consider the case of Sir Fred Goodwin, the former chief executive of Royal Bank of Scotland, which like HBOS needed a bailout to avert collapse. The committee duly stripped Mr Goodwin of his knighthood. Its chairman, Sir Bob Kerslake, later said the action had been taken following "a signal" from the PM.

Sir James was savagely criticised in a report on HBOS by the Parliamentary Commission on Banking Standards last week. It also found fault with the former HBOS chairman, Lord Stevenson, and Sir James's successor, Andy Hornby, who was in charge when the bank had to be rescued by Lloyds in a deal brokered by the then Labour government.

The commission's chairman, the Conservative MP Andrew Tyrie, branded the trio as "delusional", and the report said they had presided over the "colossal failure" of a bank which would have blown up even had the financial crisis not hit. All £20bn of the taxpayers' funds subsequently injected into Lloyds went to prop up HBOS.

When he left HBOS seven years ago Sir James was able to draw an annual pension of £572,000, but that sum is estimated to have grown to nearly £700,000 today. The Liberal Democrat peer Lord Oakeshott has argued that had HBOS been allowed to fail, Sir James would have received just £30,000 under insolvency rules.

Several MPs and MSPs, including Conservatives, have urged the Prime Minister to act, but the statements yesterday indicate that he has no plans to heed those calls, at least at present.

Mr Cameron's intervention in the case of Mr Goodwin sparked an angry response from business leaders at the time. They argued that Mr Goodwin had been "denied due process", that the decision to intervene would encourage "banker bashing" and was evidence of a perceived "anti-business climate" fostered by the Coalition Government.

Despite this, the Business Secretary, Vince Cable, has asked officials to investigate whether there could be grounds for disqualifying the HBOS three from acting as directors.

The only HBOS employee disciplined by the Financial Services Authority was Peter Cummings, who was fined £500,000 and banned from the City. The FSA's successor bodies, the Financial Conduct Authority and the Prudential Regulation Authority, would appear to be limited in what they can do. City watchdogs are required to bring a case within three years of wrongdoing being found. Therefore they would be able to act in the HBOS case only in the event of fresh evidence being presented. The FCA is preparing a report on the FSA's handling of the affair in conjunction with the PRA, although no date has been set for publication.

Simon Chouffot, a spokesman for the Robin Hood Tax campaign, said: "We must question whether James Crosby's 'services' to the financial sector have really been worthy of a knighthood. However, debates about individuals' titles are a distraction from the underlying problem – collectively the banks ran our economy into the ground. The real issue is how we make them pay to fix it."

Start your day with The Independent, sign up for daily news emails
News
ebooksAn unforgettable anthology of contemporary reportage
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Digital Optimisation Executive - Marketing

£30000 - £35000 per annum: Recruitment Genius: The UK's fastest growing, multi...

Recruitment Genius: Financial Reporting Manager

£70000 - £90000 per annum: Recruitment Genius: A Financial Reporting Manager i...

Recruitment Genius: Payments Operations Assistant

£23000 - £25000 per annum: Recruitment Genius: They win lots of awards for the...

Recruitment Genius: Telephone Debt Negotiator

£13500 - £20000 per annum: Recruitment Genius: This nationwide enforcement com...

Day In a Page

Sepp Blatter resignation: The beginning of Fifa's long road to reform?

Does Blatter's departure mean Fifa will automatically clean up its act?

Don't bet on it, says Tom Peck
Charles Kennedy: The baby of the House who grew into a Lib Dem giant

The baby of the House who grew into a Lib Dem giant

Charles Kennedy was consistently a man of the centre-left, dedicated to social justice, but was also a champion of liberty and an opponent of the nanny-state, says Baroness Williams
Syria civil war: The harrowing testament of a five-year-old victim of this endless conflict

The harrowing testament of a five-year-old victim of Syria's endless civil war

Sahar Qanbar lost her mother and brother as civilians and government soldiers fought side by side after being surrounded by brutal Islamist fighters. Robert Fisk visited her
The future of songwriting: How streaming is changing everything we know about making music

The future of songwriting

How streaming is changing everything we know about making music
William Shemin and Henry Johnson: Jewish and black soldiers receive World War I Medal of Honor amid claims of discrimination

Recognition at long last

Jewish and black soldiers who fought in WWI finally receive medals after claims of discrimination
Beating obesity: The new pacemaker which helps over-eaters

Beating obesity

The new pacemaker which helps over-eaters
9 best women's festival waterproofs

Ready for rain: 9 best women's festival waterproofs

These are the macs to keep your denim dry and your hair frizz-free(ish)
Cycling World Hour Record: Nervous Sir Bradley Wiggins ready for pain as he prepares to go distance

Wiggins worried

Nervous Sir Bradley ready for pain as he prepares to attempt cycling's World Hour Record
Liverpool close in on Milner signing

Liverpool close in on Milner signing

Reds baulk at Christian Benteke £32.5m release clause
On your feet! Spending at least two hours a day standing reduces the risk of heart attacks, cancer and diabetes, according to new research

On your feet!

Spending half the day standing 'reduces risk of heart attacks and cancer'
With scores of surgeries closing, what hope is there for the David Cameron's promise of 5,000 more GPs and a 24/7 NHS?

The big NHS question

Why are there so few new GPs when so many want to study medicine?
Big knickers are back: Thongs ain't what they used to be

Thongs ain't what they used to be

Big knickers are back
Thurston Moore interview

Thurston Moore interview

On living in London, Sonic Youth and musical memoirs
In full bloom

In full bloom

Floral print womenswear
From leading man to Elephant Man, Bradley Cooper is terrific

From leading man to Elephant Man

Bradley Cooper is terrific