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Ed Miliband accuses PM of 'smears' over Co-op's Flowers | 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. | 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 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. | 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 had suspended Mr Flowers from the Labour Party as soon as he 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. | 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. | "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." | "What the inquiry needs to be looking at is the regulatory failings." |
'Driven to wall' | |
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". | 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 it was a "lie" that he received a £50,000 donation from the Co-op that had been authorised by Mr Flowers. | |
He told BBC Radio 4's The World at One the money was from the Co-op and denied any knowledge of Mr Flowers' involvement. | |
Mr Balls says he has never had a personal meeting with Mr Flowers or had any direct phone or email contact with him, although he has met him at a group dinner. | |
Lib Dem leader Nick Clegg, said the stories about Mr Flowers "all sound extremely murky" and he the former bank "very searching questions needed to be asked." | |
The Lib Dems have received thousands of pounds from the Co-op Bank through so-called affinity income. | |
A Lib Dem credit card, run by the bank, raises £15 for the party for every account opened, and 25p is donated by the bank for every £100 spent. | |
Party accounts show that over the past three years it has received more than £115,000 through affinity income and the Co-op credit card is the largest contributor to that pot. A Lib Dem spokesman said there were no plans to change the arrangement. | |
'No grasp' | |
BBC business editor Robert Peston said it was unlikely that Mr Osborne would have ordered the then regulator, the Financial Services Authority, to make the £750m Lloyds deal happen despite its concerns that 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. | |
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. |
The Charity Commission says it is looking into allegations that Mr Flowers claimed tens of thousands of pounds in false expenses claims from the Lifeline Project charity. | |
In a statement, a spokesman said: "We can now confirm that the charity Lifeline Projects contacted the Commission in 2004 to inform us of concerns into expenses payments made to a former trustee. | |
"We are working to establish the details of the charity's report to us and our regulatory response." |