Co-op is Crap
I noticed that the chief executive of the Co-operative Bank, Niall Booker, was one of the signatories to a letter from business 'leaders' urging a No vote in the Scottish independence referendum.
Now I don't know Niall Booker personally, but I had occasion to write to him recently and as I wasn't in the least convinced by his answer I am no longer a customer of the bank.
Here are a few posts from the blog site archive which explain why I think the Co-op is crap.
Co-op Bank (10 December 2013)
I said the other day that I would write a letter of complaint to the Co-op Bank over its financial support for the Labour Party - so here's a copy of the letter I sent by email to the Co-op Bank's chief executive, Niall Booker, the other day.
To my mind, banks should stay out of party politics - all banks not just the Co-op.
If individuals want to give their own money to the Labour Party or some other party, then that's up to them - and that's how it should be with the trade unions as well, if you ask me.
Niall Booker
Chief Executive
Co-op Bank
Dear Niall
The Co-op and Party Politics
I'm glad my mind is finally made up.
I am going to close my account and take my business elsewhere because the Co-op is crap and can't face up to reality, if this report from the BBC is to be believed - and I have to say it makes perfect sense to me.
The dozen or so independent societies which combine to form the Co-op across the UK seem completely out of their depth to me, otherwise the business would not be in the mess it finds itself in today.
And while I'm no admirer of the House of Lords at least Lord Myners took on the challenge of trying to reorganise and bring some sense to the Co-op's operations for a salary of £1, so he appears to be driven by the right motives.
But still the 'independent' societies within the Co-op seem intent on re-arranging the deck chairs, as the SS Co-op bears down on the iceberg ahead.
So, I'm off as they say although I wish all the very best to those who stay on board because I think they'll need a lot of luck in the days ahead.
Why Co-op's woes are deepening
By Kamal Ahmed
BBC
Sent on 7 March, the covering letter from the Midcounties Co-operative, was suitably polite. "If you would like further information on the points raised, please let me know."
The letter was to Lord Myners, the former city minister charged with coming up with a plan to overhaul Co-op Group. With the letter was Midcounties' submission to Lord Myners' review.
In forensic detail the submission picks apart the main arguments contained in the initial plans for change. It is also provides stark evidence that here is an organisation that agrees it needs to reform - it just doesn't agree how.
"In recent years Midcounties has observed a failure at the most senior levels in the Group . . . to consistently reflect co-operative values and principles and the best standards of good governance and transparency," says the submission, which I have seen.
"This was not just a matter of errors of judgement over particular business decisions but also, more crucially, of a fundamentally flawed vision of the future of the movement which led to risk taking of a kind which was inappropriate and unnecessary in the context of co-operative ownership."
Midcounties is an important player in this game, the largest of the Co-op's independent societies with revenues of £1.2bn and more than 10,000 employees. The dozen independent societies across the UK have more than 20% of the voting rights on the group board and five are represented at group level. What they say matters for the future of the Co-op.
The background, as we know, is grim. As my colleague Robert Peston revealed last February Co-op Group is likely to report losses of up to £2bn when it reveals its 2013 figures next week.
The supermarkets, pharmacies and funerals business needs to change its model to survive. Many criticise a byzantine governance structure which critics say rewards longevity, skill at internal politics and willingness to attend endless committee meetings, above managerial skills.
Over the last decade, Co-op expanded rapidly, buying Somerfield supermarkets and the Britannia building society. Its structure simply couldn't cope.
Lord Myners - a non-executive board member of Co-op Group - is now on a listening tour, refining his initial proposals which focus on bringing in outside directors and giving the Co-op some of the checks and balances more akin to a publicly listed company. As The Guardian reports this morning, Midcounties has already voted against the reforms, with its president, Patrick Gray, saying that they will not support the "menu" that Lord Myners is offering.
I'm hearing rumblings that the Treasury Select Committee is very keen to call Euan Sutherland to give evidence to its inquiry into the Co-op bank collapse and its impact on the Group's problems.
In what would be an incendiary hearing, MPs are particularly keen to ask the former chief executive exactly what he meant when he said that the business was "ungovernable" and why he left so abruptly. Mr Sutherland also questioned the viability of the 170-year-old organisation.
If it happens - and I believe it will - it will be standing room only.
Co-op is Crap (22 March 2014)
I am a customer (saver) with the Co-op Bank to which my account was transferred from the now defunct Britannia Building Society.
I am sure you have your hands full at the moment with the fall-out from this terrible Reverend Flowers business, but I would like to let you know how much I resent and disapprove of the Co-op Bank getting so heavily involved in party politics.
To my mind, it is completely wrong for the Co-op Bank to be giving 'soft loans' or financial donations to the Labour Party such as the £50,000 handed over recently to the office of Ed Balls MP, Labour's shadow chancellor. The money involved belongs to the Co-op's customers and, in my view, it is quite outrageous for the company's funds to be used in this way.
I imagine the appointment of the Reverend Paul Flowers as Chairman of the Co-op Bank had something to do with his party political connections to the Labour Party and clearly this gentleman's out-of-control, hypocritical behaviour is doing considerable damage to the Co-op's public image.
So, I hope you will see the importance of putting your customers first and putting an end to these party political shenanigans, otherwise I will be taking my business elsewhere.
I look forward to your reply.
Kind regards
Mark Irvine
Co-op is Crap
I'm glad my mind is finally made up.
I am going to close my account and take my business elsewhere because the Co-op is crap and can't face up to reality, if this report from the BBC is to be believed - and I have to say it makes perfect sense to me.
The dozen or so independent societies which combine to form the Co-op across the UK seem completely out of their depth to me, otherwise the business would not be in the mess it finds itself in today.
And while I'm no admirer of the House of Lords at least Lord Myners took on the challenge of trying to reorganise and bring some sense to the Co-op's operations for a salary of £1, so he appears to be driven by the right motives.
But still the 'independent' societies within the Co-op seem intent on re-arranging the deck chairs, as the SS Co-op bears down on the iceberg ahead.
So, I'm off as they say although I wish all the very best to those who stay on board because I think they'll need a lot of luck in the days ahead.
Why Co-op's woes are deepening
By Kamal Ahmed
BBC
Sent on 7 March, the covering letter from the Midcounties Co-operative, was suitably polite. "If you would like further information on the points raised, please let me know."
The letter was to Lord Myners, the former city minister charged with coming up with a plan to overhaul Co-op Group. With the letter was Midcounties' submission to Lord Myners' review.
In forensic detail the submission picks apart the main arguments contained in the initial plans for change. It is also provides stark evidence that here is an organisation that agrees it needs to reform - it just doesn't agree how.
"In recent years Midcounties has observed a failure at the most senior levels in the Group . . . to consistently reflect co-operative values and principles and the best standards of good governance and transparency," says the submission, which I have seen.
"This was not just a matter of errors of judgement over particular business decisions but also, more crucially, of a fundamentally flawed vision of the future of the movement which led to risk taking of a kind which was inappropriate and unnecessary in the context of co-operative ownership."
Midcounties is an important player in this game, the largest of the Co-op's independent societies with revenues of £1.2bn and more than 10,000 employees. The dozen independent societies across the UK have more than 20% of the voting rights on the group board and five are represented at group level. What they say matters for the future of the Co-op.
The background, as we know, is grim. As my colleague Robert Peston revealed last February Co-op Group is likely to report losses of up to £2bn when it reveals its 2013 figures next week.
The supermarkets, pharmacies and funerals business needs to change its model to survive. Many criticise a byzantine governance structure which critics say rewards longevity, skill at internal politics and willingness to attend endless committee meetings, above managerial skills.
Over the last decade, Co-op expanded rapidly, buying Somerfield supermarkets and the Britannia building society. Its structure simply couldn't cope.
Lord Myners - a non-executive board member of Co-op Group - is now on a listening tour, refining his initial proposals which focus on bringing in outside directors and giving the Co-op some of the checks and balances more akin to a publicly listed company. As The Guardian reports this morning, Midcounties has already voted against the reforms, with its president, Patrick Gray, saying that they will not support the "menu" that Lord Myners is offering.
Lord Myners has several proposals for the future of Co-op Group
Mr Gray, whom I spoke to yesterday and who made an appearance on the Today programme and BBC Radio 5 live this morning, is most concerned that by changing the governance structure, the very democratic and "values-led" DNA of the present Co-op might be lost. Euan Sutherland, the former Co-op chief executive who resigned after details of his pay were leaked to The Observer, argued that democracy and values might be vital, but without radical change the whole future of the business was at risk.
This is a disagreement that goes to the heart of the Co-op debate. As its submission continues, "Midcounties does not share the view that in a co-operative context member control is incompatible with the needs of a complex commercial enterprise. Indeed, experience in the UK and abroad demonstrates that this is clearly not the case.
"Among the independent consumer co-operative societies, it is demonstrably the case that it is the most democratic that are the most successful in commercial terms, not the reverse."
The clash is one of cultures. Lord Myners is steeped in PLC history, having formerly been chairman of both the property business, Land Securities, and Marks and Spencer. Mr Sutherland was formerly at the retail giant, Kingfisher. Niall Booker, the chief executive of Co-op Bank in which the Co-op Group retains a 30% stake, is a veteran of HSBC.
They are coming up against committed independent heads of co-operative societies who have long experience of mutual operations. They are suspicious of where change is leading.
"A fundamental point is that the relationship [between Group and its Co-op members] is not purely commercial," the Midcounties submission says. "All societies are part of the co-operative movement.
"We share a common interest in showing that co-operation is a force for good in society and an important organisational model in itself."
Lord Myners has until a special general meeting of the Co-op Group in the summer to get his proposals agreed. He will have a tough job.
UPDATE 13:15
Mr Gray, whom I spoke to yesterday and who made an appearance on the Today programme and BBC Radio 5 live this morning, is most concerned that by changing the governance structure, the very democratic and "values-led" DNA of the present Co-op might be lost. Euan Sutherland, the former Co-op chief executive who resigned after details of his pay were leaked to The Observer, argued that democracy and values might be vital, but without radical change the whole future of the business was at risk.
This is a disagreement that goes to the heart of the Co-op debate. As its submission continues, "Midcounties does not share the view that in a co-operative context member control is incompatible with the needs of a complex commercial enterprise. Indeed, experience in the UK and abroad demonstrates that this is clearly not the case.
"Among the independent consumer co-operative societies, it is demonstrably the case that it is the most democratic that are the most successful in commercial terms, not the reverse."
The clash is one of cultures. Lord Myners is steeped in PLC history, having formerly been chairman of both the property business, Land Securities, and Marks and Spencer. Mr Sutherland was formerly at the retail giant, Kingfisher. Niall Booker, the chief executive of Co-op Bank in which the Co-op Group retains a 30% stake, is a veteran of HSBC.
They are coming up against committed independent heads of co-operative societies who have long experience of mutual operations. They are suspicious of where change is leading.
"A fundamental point is that the relationship [between Group and its Co-op members] is not purely commercial," the Midcounties submission says. "All societies are part of the co-operative movement.
"We share a common interest in showing that co-operation is a force for good in society and an important organisational model in itself."
Lord Myners has until a special general meeting of the Co-op Group in the summer to get his proposals agreed. He will have a tough job.
UPDATE 13:15
I'm hearing rumblings that the Treasury Select Committee is very keen to call Euan Sutherland to give evidence to its inquiry into the Co-op bank collapse and its impact on the Group's problems.
In what would be an incendiary hearing, MPs are particularly keen to ask the former chief executive exactly what he meant when he said that the business was "ungovernable" and why he left so abruptly. Mr Sutherland also questioned the viability of the 170-year-old organisation.
If it happens - and I believe it will - it will be standing room only.
Co-op is Crap (22 March 2014)
Here's an interesting article from The Guardian about the shambolic performance of the Co-op Group which has led to American hedge funds gobbling up most of its assets after a £1.5 billion in the Co-op Bank was exposed.
Now the catalyst for the Co-op's collapse seems to have been the acquisition of the Britannia Building Society which I was a member of for years as it was the favoured financial institution of many trade unions including Nupe and Unison.
In fact if I remember correctly, the former Deputy General Secretary of Unison, Tom Sawyer, went on to become a director and board member of the Britannia Building Society as well as becoming general secretary of the Labour Party.
What a small world, you have to admit, but increasingly I am coming to a view that the Co-op is crap and that I should ale my business elsewhere.
Ethical banking, my arse.
Extent of Co-op shambles laid bare by Lord Myners
Co-op's independent director says the group has been undermined by 'reckless' dealmaking and 'shocking' debt
By Sean Farrell and Jill Treanor
Lord Myners said management standards at the Co-op were worse than at banks before the credit crunch. Photograph: Gary Calton for the Guardian
The shambolic state of the Co-operative Group was laid bare in a scathing verdict warning that the survival of Britain's biggest mutual organisation was at stake.
The Co-op has been undermined by "reckless" dealmaking, "shocking" levels of debt and governance standards far worse than even the banks before the credit crunch, according to Lord Myners, the group's senior independent director who was charged with overhauling the boardroom.
In an exclusive interview with the Guardian, the City grandee who was installed as a Labour minister at the height of the credit crisis said: "I have observed the bad governance of the banks, but this is on an altogether worse level.
"The rate of deterioration has increased over the last half dozen years because of the recklessness of the strategy being pursued and supported by the board."
He added that the entire retail, funeral home, pharmacy and farming conglomerate would deteriorate further unless it was radically reformed.
Myners, also an ex-chairman of Marks &Spencer and Guardian Media Group, said the Co-op's reputation as a business run democratically by its members was a myth.
He said the company's most senior managers were left to waste billions of pounds on disastrous corporate transactions because the directors drawn from the Co-op movement were not qualified to keep them in check. "Few of them have any serious business experience and many are drawing material financial benefits from their positions."
Myners said the Co-op's elected directors – who include a plasterer, lecturer, tax official, nurse and farmer – had overseen "breathtakingly value-destructive" deals, including the takeover of the Somerfield supermarket chain and the Britannia building society.
It was the Britannia deal that left the Co-op bank facing a £1.5bn financial black hole and resulted in the bank being taken over by US hedge funds.
Myners, called in to review the group's governance in December, proposed far-reaching changes that he said would ensure it could stay true to the Co-op's democratic ideals and still be run on commercial lines.
In a report rushed out – just days after the group's chief executive, Euan Sutherland, quit and branded the organisation "ungovernable" – Myners concluded that:
• The group's "massive failure of governance" had "gravely damaged the organisation", letting its business decay and leaving it financially weak.
• Its members, who supposedly own the business, have almost no say in what the board or managers decide.
• Unless the governance is reformed "it will run out of capital to support its business".
Myners said it was a tragedy that Sutherland had quit because the Co-op owed its survival through last year's bank crisis to him and his team. He said what he had uncovered at the Co-op was so serious that the group had no choice but to change.
"What I think I have exposed is that the Co-op is not a democratic organisation and has a deeply flawed governance structure, and if it doesn't address these issues the pace of decline will simply increase. The reality is that the Co-op has been in decline for 60 years."
The organisation had "the worst governance I have ever witnessed" and "shocking" levels of debt, some of which was hidden by complex property deals, he said. The group currently has debts of £1.2bn. "This is folly in the extreme. This really pains me."
He said that the group, led by £1.2m-a-year chief executive Peter Marks until last year, had been obsessed with making large acquisitions instead of competing in the cut-throat world of grocery retailing, which is its main business.
The crisis at the Co-op came to a head last week when Sutherland resigned, after just 10 months, when the Observer revealed his £3.6m pay package. Sutherland said that senior colleagues were determined to undermine him and he blamed them for a series of damaging leaks. Myners claimed Sutherland never intended to take the £2m of bonuses awarded on top of his £1.5m salary. The money was agreed before Myners became involved and, he said, should have been revealed earlier.
Britain's biggest mutual company was plunged into chaos last May when a £1.5bn financial hole was revealed at its banking arm. The capital shortage had forced the Co-op to abandon its bid for more than 600 Lloyds bank branches and has led to US hedge funds owning most of the bank.
The problems deepened in November when the bank's former chairman, Paul Flowers, was alleged to have bought class A drugs and used rent boys.
Myners said the Co-op had lost almost all the customers it picked up when it bought Somerfield in 2008 for £1.6bn. He said taking over the Britannia had almost bankrupted the Co-op bank and the attempted Lloyds deal, codenamed Project Verde, was misconceived: "Somerfield was reckless. Britannia was reckless. Verde was reckless."
Myners said he had worked four days a week for three months examining the group's "labyrinthine" structures and coming up with proposals. He will be paid £1 for his efforts.
The Flowers affair triggered a string of inquiries into the turmoil at the group, whose ethics and democratic structure had been lauded as an alternative to the big bonuses and ruthless business practices of City-controlled companies.
Myners said his proposals would make the group more democratic by involving its currently- ignored wider membership while making sure people with business experience were in charge of commercial decisions.
He faces opposition from within the group's senior ranks who accused Sutherland of trying to scrap the values established by the Rochdale pioneers who founded the group in 1844. But Myners argued even his most entrenched opponents now realised the status quo could not stand.
Myners said the group's directors had been paid hundreds of thousands of pounds in the last few years as the group was driven close to ruin.
"It depresses me. It's a controlled anger," he said.
He rejected claims he had alienated board members with his uncompromising verdict on their abilities and the Co-op's record.
He called for the replacement of the group's 20-strong elected board with a smaller board of six or seven non-executive directors with business experience and two executives from the group.
Members would be represented on a new National Membership Council to hold the board to the group's values and principles. Directors would be elected and reelected each year by all members, overhauling the current system which puts power in the hands of a few hundred activists.
Here's an interesting article from the Times about the ongoing chaos at the Co-op Bank and the out-of-control behaviour by its Labour supporting former Chairman - Reverend Paul Flowers.
Labour under fire over chaos at Co-op
Paul Flowers has said he ’did things that were stupid and wrong’ PA
Now the catalyst for the Co-op's collapse seems to have been the acquisition of the Britannia Building Society which I was a member of for years as it was the favoured financial institution of many trade unions including Nupe and Unison.
In fact if I remember correctly, the former Deputy General Secretary of Unison, Tom Sawyer, went on to become a director and board member of the Britannia Building Society as well as becoming general secretary of the Labour Party.
What a small world, you have to admit, but increasingly I am coming to a view that the Co-op is crap and that I should ale my business elsewhere.
Ethical banking, my arse.
Extent of Co-op shambles laid bare by Lord Myners
Co-op's independent director says the group has been undermined by 'reckless' dealmaking and 'shocking' debt
By Sean Farrell and Jill Treanor
Lord Myners said management standards at the Co-op were worse than at banks before the credit crunch. Photograph: Gary Calton for the Guardian
The shambolic state of the Co-operative Group was laid bare in a scathing verdict warning that the survival of Britain's biggest mutual organisation was at stake.
The Co-op has been undermined by "reckless" dealmaking, "shocking" levels of debt and governance standards far worse than even the banks before the credit crunch, according to Lord Myners, the group's senior independent director who was charged with overhauling the boardroom.
In an exclusive interview with the Guardian, the City grandee who was installed as a Labour minister at the height of the credit crisis said: "I have observed the bad governance of the banks, but this is on an altogether worse level.
"The rate of deterioration has increased over the last half dozen years because of the recklessness of the strategy being pursued and supported by the board."
He added that the entire retail, funeral home, pharmacy and farming conglomerate would deteriorate further unless it was radically reformed.
Myners, also an ex-chairman of Marks &Spencer and Guardian Media Group, said the Co-op's reputation as a business run democratically by its members was a myth.
He said the company's most senior managers were left to waste billions of pounds on disastrous corporate transactions because the directors drawn from the Co-op movement were not qualified to keep them in check. "Few of them have any serious business experience and many are drawing material financial benefits from their positions."
Myners said the Co-op's elected directors – who include a plasterer, lecturer, tax official, nurse and farmer – had overseen "breathtakingly value-destructive" deals, including the takeover of the Somerfield supermarket chain and the Britannia building society.
It was the Britannia deal that left the Co-op bank facing a £1.5bn financial black hole and resulted in the bank being taken over by US hedge funds.
Myners, called in to review the group's governance in December, proposed far-reaching changes that he said would ensure it could stay true to the Co-op's democratic ideals and still be run on commercial lines.
In a report rushed out – just days after the group's chief executive, Euan Sutherland, quit and branded the organisation "ungovernable" – Myners concluded that:
• The group's "massive failure of governance" had "gravely damaged the organisation", letting its business decay and leaving it financially weak.
• Its members, who supposedly own the business, have almost no say in what the board or managers decide.
• Unless the governance is reformed "it will run out of capital to support its business".
Myners said it was a tragedy that Sutherland had quit because the Co-op owed its survival through last year's bank crisis to him and his team. He said what he had uncovered at the Co-op was so serious that the group had no choice but to change.
"What I think I have exposed is that the Co-op is not a democratic organisation and has a deeply flawed governance structure, and if it doesn't address these issues the pace of decline will simply increase. The reality is that the Co-op has been in decline for 60 years."
The organisation had "the worst governance I have ever witnessed" and "shocking" levels of debt, some of which was hidden by complex property deals, he said. The group currently has debts of £1.2bn. "This is folly in the extreme. This really pains me."
He said that the group, led by £1.2m-a-year chief executive Peter Marks until last year, had been obsessed with making large acquisitions instead of competing in the cut-throat world of grocery retailing, which is its main business.
The crisis at the Co-op came to a head last week when Sutherland resigned, after just 10 months, when the Observer revealed his £3.6m pay package. Sutherland said that senior colleagues were determined to undermine him and he blamed them for a series of damaging leaks. Myners claimed Sutherland never intended to take the £2m of bonuses awarded on top of his £1.5m salary. The money was agreed before Myners became involved and, he said, should have been revealed earlier.
Britain's biggest mutual company was plunged into chaos last May when a £1.5bn financial hole was revealed at its banking arm. The capital shortage had forced the Co-op to abandon its bid for more than 600 Lloyds bank branches and has led to US hedge funds owning most of the bank.
The problems deepened in November when the bank's former chairman, Paul Flowers, was alleged to have bought class A drugs and used rent boys.
Myners said the Co-op had lost almost all the customers it picked up when it bought Somerfield in 2008 for £1.6bn. He said taking over the Britannia had almost bankrupted the Co-op bank and the attempted Lloyds deal, codenamed Project Verde, was misconceived: "Somerfield was reckless. Britannia was reckless. Verde was reckless."
Myners said he had worked four days a week for three months examining the group's "labyrinthine" structures and coming up with proposals. He will be paid £1 for his efforts.
The Flowers affair triggered a string of inquiries into the turmoil at the group, whose ethics and democratic structure had been lauded as an alternative to the big bonuses and ruthless business practices of City-controlled companies.
Myners said his proposals would make the group more democratic by involving its currently- ignored wider membership while making sure people with business experience were in charge of commercial decisions.
He faces opposition from within the group's senior ranks who accused Sutherland of trying to scrap the values established by the Rochdale pioneers who founded the group in 1844. But Myners argued even his most entrenched opponents now realised the status quo could not stand.
Myners said the group's directors had been paid hundreds of thousands of pounds in the last few years as the group was driven close to ruin.
"It depresses me. It's a controlled anger," he said.
He rejected claims he had alienated board members with his uncompromising verdict on their abilities and the Co-op's record.
He called for the replacement of the group's 20-strong elected board with a smaller board of six or seven non-executive directors with business experience and two executives from the group.
Members would be represented on a new National Membership Council to hold the board to the group's values and principles. Directors would be elected and reelected each year by all members, overhauling the current system which puts power in the hands of a few hundred activists.
Co-op Chaos (21 November 2013)
As a customer of the bank, I don't approve of these financial donations to Labour politicians and soft loans to the Labour Party.
So I hope the inquiry that the Government has promised will shine a light on what has been going on - and how such a preposterous hypocrite as Rev Flowers was able to land himself such an influential position, which I suspect is down to his political connections.
I also plan to write a letter of complaint to the Co-op because I won't remain a customer if the bank continues to meddle in party politics in this pathetic and one-sided way.
If I wanted to give a donation to the Labour Party or any other party for that matter, I would make it myself - I neither need nor want the Co-op Bank to do this on my behalf.
Give me the Mayor of Toronto, Rob Ford, anytime because while he's behaved very badly at least Ford has been brave enough to face his critics and he appears to have harmed only himself with his antics - as opposed to hypocrisy we've witnessed from Reverend Flowers.
Labour under fire over chaos at Co-op
Paul Flowers has said he ’did things that were stupid and wrong’ PA
By Dominic Kennedy Investigations Editor
Police search home of former Co-op chairman
The Labour Party was under pressure last night over why it failed to raise the alarm about the Co-operative Bank chairman Paul Flowers when he was forced out of a council for having pornography on his laptop.
Grant Shapps, the Conservative chairman, wrote to Ed Miliband asking what the party hierarchy knew about the Methodist minister’s increasingly erratic behaviour.
Tory MPs suggested Labour politicians covered up for Mr Flowers because he was providing gifts and loans for the party.
Police are investigating the clergyman after he was filmed by a Sunday newspaper buying £300 worth of crack cocaine and ketamine, a horse tranquiliser used as a party drug.
Officers have searched his home, West Yorkshire Police said today. “Officers executed a search warrant at an address in Hollingwood Lane, Great Horton, (Bradford) yesterday as part of an investigation into alleged drugs offences arising from a national Sunday newspaper story,” a spokesman said.
In other developments yesterday:
- Len Wardle, the Chairman of the Co-Operative Group, and a prominent supporter of Ed Balls, resigned taking the blame for appointing Mr Flowers as head of the bank.
- But Ursula Lidbetter, his replacement, was immediately accused of taking part in the same decision.
- It emerged that the one of the regulators who gave formal advice to Mr Flowers before he became head of the bank was later given a seat on the Co-Operative Bank’s board.
Questions emerged about the extent of Labour’s knowledge of Mr Flower’s eratic behaviour when Bradford council yesterday confirmed that he had resigned as a Labour councillor in September 2011 after “inappropriate but not illegal” adult content was discovered by IT staff on his work laptop. He was already chairman of the Co-op bank.
In November 2011 Mr Flowers was invited to join Mr Miliband at a dinner as a member of the Labour leader’s Business and Industry Advisory Board.
In March 2012, Mr Flowers personally took part in a decision by the Co-operative Group to give an unprecedented £50,000 gift to the office of Ed Balls, the Shadow Chancellor whose constituency is in the neighbouring city of Leeds. Mr Balls’ office said he never discussed the donation with Mr Flowers.
Brooks Newmark, a Conservative member of the Treasury Select Committee, said: “The toxic element of a great ethical institution like the Co-operative is the way the Labour Party has effectively infiltrated it and infected it because of the benefits they have been receiving from it. The only way the Labour Party could get a loan if it didn’t have the Co-operative Bank is from Wonga.”
He said Labour knew about Mr Flowers’ inappropriate behaviour “but remained silent on it because he played an important role as a key individual in giving the money to Labour MPs like Mr Balls.”
Mr Flowers issued an apology on Sunday claiming he “did things that were stupid and wrong” at the lowest point of this year following the death of his mother and the pressures at the bank, which almost collapsed under his leadership. However, the emergence of the council wrongdoing two years ago suggests he has long been going off the rails.
Mr Shapps wrote to Mr Miliband last night saying the latest revelations about Mr Flowers “have shocked and appalled the public.” He demanded to know whether Mr Balls knew of the councillor’s pornography shame before accepting the £50,000.
Mr Balls’ office last night said that the Shadow Chancellor had been unaware of the laptop incident. His office added: “Ed has never discussed the donation with Paul Flowers and, as far as Ed was aware, he had no involvement in it at all. Of course Ed’s been to a few events which Paul Flowers has also been at, but he’s never had a meeting or phone conversation with him.”
Ursula Lidbetter, the Co-Operative group’s deputy chairman, who will lead the organisation through a review of its governance said On The World At One, she described the stories about Mr Flowers as shocking.
It also emerged that Graeme Hardie, the Financial Services Authority adviser who had an informal regulatory discussion with Mr Flowers before he took over as chairman of the bank, was later given a seat on its board. Regulatory sources said this breached no rules.
The Terrence Higgins Trust yesterday removed references to Mr Flowers from its website after newspapers published accounts of his drug-fuelled group-sex encounters with rentboys. He has resigned as a trustee of the HIV/Aids charity.
dkennedy@thetimes.co.uk
And here's a handy guide to the Reverend Flower's recent career highlights courtesy of the BBC
Police search home of former Co-op chairman
The Labour Party was under pressure last night over why it failed to raise the alarm about the Co-operative Bank chairman Paul Flowers when he was forced out of a council for having pornography on his laptop.
Grant Shapps, the Conservative chairman, wrote to Ed Miliband asking what the party hierarchy knew about the Methodist minister’s increasingly erratic behaviour.
Tory MPs suggested Labour politicians covered up for Mr Flowers because he was providing gifts and loans for the party.
Police are investigating the clergyman after he was filmed by a Sunday newspaper buying £300 worth of crack cocaine and ketamine, a horse tranquiliser used as a party drug.
Officers have searched his home, West Yorkshire Police said today. “Officers executed a search warrant at an address in Hollingwood Lane, Great Horton, (Bradford) yesterday as part of an investigation into alleged drugs offences arising from a national Sunday newspaper story,” a spokesman said.
In other developments yesterday:
- Len Wardle, the Chairman of the Co-Operative Group, and a prominent supporter of Ed Balls, resigned taking the blame for appointing Mr Flowers as head of the bank.
- But Ursula Lidbetter, his replacement, was immediately accused of taking part in the same decision.
- It emerged that the one of the regulators who gave formal advice to Mr Flowers before he became head of the bank was later given a seat on the Co-Operative Bank’s board.
Questions emerged about the extent of Labour’s knowledge of Mr Flower’s eratic behaviour when Bradford council yesterday confirmed that he had resigned as a Labour councillor in September 2011 after “inappropriate but not illegal” adult content was discovered by IT staff on his work laptop. He was already chairman of the Co-op bank.
In November 2011 Mr Flowers was invited to join Mr Miliband at a dinner as a member of the Labour leader’s Business and Industry Advisory Board.
In March 2012, Mr Flowers personally took part in a decision by the Co-operative Group to give an unprecedented £50,000 gift to the office of Ed Balls, the Shadow Chancellor whose constituency is in the neighbouring city of Leeds. Mr Balls’ office said he never discussed the donation with Mr Flowers.
Brooks Newmark, a Conservative member of the Treasury Select Committee, said: “The toxic element of a great ethical institution like the Co-operative is the way the Labour Party has effectively infiltrated it and infected it because of the benefits they have been receiving from it. The only way the Labour Party could get a loan if it didn’t have the Co-operative Bank is from Wonga.”
He said Labour knew about Mr Flowers’ inappropriate behaviour “but remained silent on it because he played an important role as a key individual in giving the money to Labour MPs like Mr Balls.”
Mr Flowers issued an apology on Sunday claiming he “did things that were stupid and wrong” at the lowest point of this year following the death of his mother and the pressures at the bank, which almost collapsed under his leadership. However, the emergence of the council wrongdoing two years ago suggests he has long been going off the rails.
Mr Shapps wrote to Mr Miliband last night saying the latest revelations about Mr Flowers “have shocked and appalled the public.” He demanded to know whether Mr Balls knew of the councillor’s pornography shame before accepting the £50,000.
Mr Balls’ office last night said that the Shadow Chancellor had been unaware of the laptop incident. His office added: “Ed has never discussed the donation with Paul Flowers and, as far as Ed was aware, he had no involvement in it at all. Of course Ed’s been to a few events which Paul Flowers has also been at, but he’s never had a meeting or phone conversation with him.”
Ursula Lidbetter, the Co-Operative group’s deputy chairman, who will lead the organisation through a review of its governance said On The World At One, she described the stories about Mr Flowers as shocking.
It also emerged that Graeme Hardie, the Financial Services Authority adviser who had an informal regulatory discussion with Mr Flowers before he took over as chairman of the bank, was later given a seat on its board. Regulatory sources said this breached no rules.
The Terrence Higgins Trust yesterday removed references to Mr Flowers from its website after newspapers published accounts of his drug-fuelled group-sex encounters with rentboys. He has resigned as a trustee of the HIV/Aids charity.
dkennedy@thetimes.co.uk
And here's a handy guide to the Reverend Flower's recent career highlights courtesy of the BBC
Career of Paul Flowers
- 1976: Starts as Methodist minister in Bradford
- 1988-92: Labour councillor on Rochdale Council
- 2002-11: Labour councillor on Bradford Council
- 2009: Joins board of Co-op Bank and Co-op Group
- 2010: Appointed chairman of Co-op Bank and deputy chairman of Co-op Group in April. Appointed by Labour leader Ed Miliband to the party's finance and industry board
- 2013: Steps down as chairman of Co-op Bank and as deputy chairman of Co-op Group in June
- 6 November: Appears before MPs on Treasury Select Committee
- 17 November: Mail on Sunday publishes footage showing Mr Flowers allegedly buying illegal drugs. He apologises and says he is seeking help
- 18 November: Suspended by Labour and his Bradford church
- 19 November: Co-op Group chairman Len Wardle resigns amid the scandal
Sources: Bradford Council, Rochdale Council, Co-op Bank, Co-op Group
