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Ed Miliband accuses PM of 'smears' over Co-op's Flowers | |
(about 1 hour later) | |
Ed Miliband has accused David Cameron of "unjustified smears" over claims about Labour's links to disgraced ex-Co-op Bank chairman Paul Flowers. | |
The Labour leader said the PM was scoring "cheap political points" and ignoring serious regulatory issues. | |
The prime minister has suggested Labour was aware of concerns about Mr Flowers but did nothing about them. | |
He has ordered an inquiry into how Mr Flowers was deemed a suitable chairman of the bank. | He has ordered an inquiry into how Mr Flowers was deemed a suitable chairman of the bank. |
Mr Miliband said he suspended Mr Flowers from the Labour Party as soon learned of allegations about the Methodist minister. | |
He said the former Labour councillor had "deeply let down" people but the inquiry should focus on the regulatory failings that allowed him to become chairman of the Co-op Bank. | |
He said Labour had a "long-standing" commercial relationship with the bank, which predated Mr Flowers's role, and he was satisfied there were no questions to answer on it. | |
"The Conservative Party is just trying to throw around wild allegations," said Mr Miliband. | |
"What the inquiry needs to be looking at is the regulatory failings." | |
Mr Flowers apologised after a video on the Mail on Sunday website showed him handing over £300 in a car, apparently to buy cocaine. | Mr Flowers apologised after a video on the Mail on Sunday website showed him handing over £300 in a car, apparently to buy cocaine. |
It has since emerged that: | It has since emerged that: |
David Cameron has claimed the Co-op bank was "driven to the wall" by Mr Flowers, while he approved millions of pounds worth of "soft loans" to the Labour Party. | David Cameron has claimed the Co-op bank was "driven to the wall" by Mr Flowers, while he approved millions of pounds worth of "soft loans" to the Labour Party. |
He said Mr Flowers, who was a business adviser to Mr Miliband, had "trooped in and out of Downing Street under Labour". | |
Labour has hit back by attempting to implicate Chancellor George Osborne in the controversy. | Labour has hit back by attempting to implicate Chancellor George Osborne in the controversy. |
The party says Mr Osborne failed to carry out due diligence on the Co-op Bank over its plan to buy more than 600 branches from Lloyds Bank and that he pressed the EU to ease regulation on mutuals, including the Co-op. | The party says Mr Osborne failed to carry out due diligence on the Co-op Bank over its plan to buy more than 600 branches from Lloyds Bank and that he pressed the EU to ease regulation on mutuals, including the Co-op. |
The Treasury has dismissed the Labour claims as "a total distraction". | The Treasury has dismissed the Labour claims as "a total distraction". |
Shadow chancellor Ed Balls said he had never had a personal meeting with Mr Flowers or had any direct phone or email contact with him, though he had met him at a group dinner. | |
BBC business editor Robert Peston said it was unlikely that Mr Osborne would have ordered the regulator, the Financial Services Authority, to make the £750m Lloyds deal happen despite concerns the Co-op had too little capital. | |
He says in his blog: "This can't be the case, because if it was, George Osborne would be signing his own execution by ordering an investigation into all this. | He says in his blog: "This can't be the case, because if it was, George Osborne would be signing his own execution by ordering an investigation into all this. |
"Perhaps more likely is that the FSA simply didn't have the backbone to go against the prevailing political mood, that co-ops and mutuals were a good thing, and needed to be promoted." | "Perhaps more likely is that the FSA simply didn't have the backbone to go against the prevailing political mood, that co-ops and mutuals were a good thing, and needed to be promoted." |
When Mr Flowers appeared before the Treasury Select Committee of MPs on 6 November, he appeared to have "no grasp" of "basic" facts about the bank, Peston said. | When Mr Flowers appeared before the Treasury Select Committee of MPs on 6 November, he appeared to have "no grasp" of "basic" facts about the bank, Peston said. |
Mr Flowers had never worked in the banking sector in "any senior capacity", he said, but had been appointed chairman of the Co-op Bank as a result of a "power struggle within the co-operative movement". | Mr Flowers had never worked in the banking sector in "any senior capacity", he said, but had been appointed chairman of the Co-op Bank as a result of a "power struggle within the co-operative movement". |
The independent inquiry cannot begin until police have concluded their investigation into allegations that Mr Flowers bought and used illegal drugs. | The independent inquiry cannot begin until police have concluded their investigation into allegations that Mr Flowers bought and used illegal drugs. |