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| Labour hits back at coalition 'smear campaign' over links with Paul Flowers | Labour hits back at coalition 'smear campaign' over links with Paul Flowers |
| (1 day later) | |
| Ed Balls and Ed Miliband have hit back at what they describe as a concerted coalition smear campaign over the extent of the Labour leadership's links with the disgraced former Co-op Bank chairman Paul Flowers. | Ed Balls and Ed Miliband have hit back at what they describe as a concerted coalition smear campaign over the extent of the Labour leadership's links with the disgraced former Co-op Bank chairman Paul Flowers. |
| Miliband claimed Cameron was going to try to smear his way to an election victory, and as prime minister he should instead be focused on trying to stabilise the bank. | Miliband claimed Cameron was going to try to smear his way to an election victory, and as prime minister he should instead be focused on trying to stabilise the bank. |
| Flowers quit the troubled bank after it was alleged he had taken drugs, prompting further revelations over his activities including a decision to step aside from a Manchester-based drugs charity following complaints over the scale of his expenses between 1992 and 2004. Flowers left without being disciplined by the charity, the Lifeline Project. | |
| Earlier Nick Clegg asked on his LBC radio programme why Labour had not known about Flowers' past and alleged Flowers had given £50,000 to Ed Balls. | Earlier Nick Clegg asked on his LBC radio programme why Labour had not known about Flowers' past and alleged Flowers had given £50,000 to Ed Balls. |
| Balls accused Clegg of lying, saying the donation came from the Co-op Group – and not from Flowers or the bank. He also accused the chancellor, George Osborne, and the regulators of being asleep at the wheel over the state of the Co-op Bank. | Balls accused Clegg of lying, saying the donation came from the Co-op Group – and not from Flowers or the bank. He also accused the chancellor, George Osborne, and the regulators of being asleep at the wheel over the state of the Co-op Bank. |
| Referring to Clegg's claims, Balls said: "To allege and smear that I have received £50,000 from Paul Flowers, it's a lie, and I hope he will withdraw that. I've never in my life had a conversation with Paul Flowers about that matter or any other financial matter in any one-to-one meeting or email. | Referring to Clegg's claims, Balls said: "To allege and smear that I have received £50,000 from Paul Flowers, it's a lie, and I hope he will withdraw that. I've never in my life had a conversation with Paul Flowers about that matter or any other financial matter in any one-to-one meeting or email. |
| Justifying the donation, he said: "It's a not-for-profit organisation and it's supported me in the past and it came forward a year or so ago and said they would like to help me with my office costs because I'm a co-operator and so are they." | Justifying the donation, he said: "It's a not-for-profit organisation and it's supported me in the past and it came forward a year or so ago and said they would like to help me with my office costs because I'm a co-operator and so are they." |
| He added that he had known nothing about the allegations concerning the former Co-op Bank chairman, and said Flowers had been suspended from the Labour membership and was "out, out, out". | He added that he had known nothing about the allegations concerning the former Co-op Bank chairman, and said Flowers had been suspended from the Labour membership and was "out, out, out". |
| Defending Labour's links to the Co-op group, including the provision of loans to the party, he said: "The Co-operative group is all about the Co-op shops and funeral parlours and all those things across the country; it has been a supporter of the Co-op party and the Labour party for 100 years, we share the same values." | Defending Labour's links to the Co-op group, including the provision of loans to the party, he said: "The Co-operative group is all about the Co-op shops and funeral parlours and all those things across the country; it has been a supporter of the Co-op party and the Labour party for 100 years, we share the same values." |
| He said the coalition had questions to answer over the way in which they had encouraged the expansion of the Co-op Bank. | He said the coalition had questions to answer over the way in which they had encouraged the expansion of the Co-op Bank. |
| He alleged: "They've been there for three years, they have advocated Paul Flowers buying 600 Lloyds branches. Were they asleep? Did they not know what was going on?" | He alleged: "They've been there for three years, they have advocated Paul Flowers buying 600 Lloyds branches. Were they asleep? Did they not know what was going on?" |
| He went on: "Mark Hoban, the Treasury minister, has had 30 meetings with him; I've never had a meeting with him. I've been at a dinner he was at, I was at a reception he was at; he was the chair of a bank, but the idea that Ed or I knew what was going on – we weren't the regulator, we weren't the chancellor, we weren't in charge and where were these guys? Why was George Osborne asleep on his watch?" | He went on: "Mark Hoban, the Treasury minister, has had 30 meetings with him; I've never had a meeting with him. I've been at a dinner he was at, I was at a reception he was at; he was the chair of a bank, but the idea that Ed or I knew what was going on – we weren't the regulator, we weren't the chancellor, we weren't in charge and where were these guys? Why was George Osborne asleep on his watch?" |
| Hoban refused to discuss the issue with the Guardian. | Hoban refused to discuss the issue with the Guardian. |
| Miliband also urged Cameron not to treat the state of the Co-op Bank as a convenient political football. He said: "What this episode shows is more about the character of the prime minister than about the character of Labour's relationship with the Co-op. We have a prime minister who, when he sees a serious situation at the bank, tries to make cheap political points rather than sorting it out. | Miliband also urged Cameron not to treat the state of the Co-op Bank as a convenient political football. He said: "What this episode shows is more about the character of the prime minister than about the character of Labour's relationship with the Co-op. We have a prime minister who, when he sees a serious situation at the bank, tries to make cheap political points rather than sorting it out. |
| "David Cameron is determined to smear his way through the next 18 months. That is not what the British people expect from their prime minister." | "David Cameron is determined to smear his way through the next 18 months. That is not what the British people expect from their prime minister." |
| Jesse Norman, a Conservative member of the Treasury select committee, also urged the government to focus on the issue of poor regulation. | Jesse Norman, a Conservative member of the Treasury select committee, also urged the government to focus on the issue of poor regulation. |
| He said: "When you look on the conduct side, how people actually behaved, it's quite clear that the approved persons regime – so-called – which is what certified people like Paul Flowers to be fit and proper persons to run a financial institution, and indeed a clearing bank – it's clear that that system isn't working at all well. | He said: "When you look on the conduct side, how people actually behaved, it's quite clear that the approved persons regime – so-called – which is what certified people like Paul Flowers to be fit and proper persons to run a financial institution, and indeed a clearing bank – it's clear that that system isn't working at all well. |
| "The wider problem is that the Co-op bank itself was the victim of an incredible culture of complacency and internal politics, not party politics, internal politics. And the normal mechanisms by which a Co-op works – which is to share information and to take semi-democratic procedures – was destroyed by a culture of essentially mutually-reinforcing, back-slapping self-support, and that's what allowed essentially a piece of cronyism that allowed Mr Flowers to come to. | "The wider problem is that the Co-op bank itself was the victim of an incredible culture of complacency and internal politics, not party politics, internal politics. And the normal mechanisms by which a Co-op works – which is to share information and to take semi-democratic procedures – was destroyed by a culture of essentially mutually-reinforcing, back-slapping self-support, and that's what allowed essentially a piece of cronyism that allowed Mr Flowers to come to. |
| "And the tragedy is that the regulators – who should've been much tougher – still appear to have been ticking boxes at the time he was approved." | "And the tragedy is that the regulators – who should've been much tougher – still appear to have been ticking boxes at the time he was approved." |
| Pat McFadden, a Labour member of the Treasury select committee, said the idea that Ed Miliband knew about Flowers' misdemeanours was absurd, and accused the government of using "cheap political tactics". | Pat McFadden, a Labour member of the Treasury select committee, said the idea that Ed Miliband knew about Flowers' misdemeanours was absurd, and accused the government of using "cheap political tactics". |
| He said: "Rev Flowers has deeply let down the people who entrusted him to be the chair of the bank. Obviously he has deep questions to answer about that." | He said: "Rev Flowers has deeply let down the people who entrusted him to be the chair of the bank. Obviously he has deep questions to answer about that." |
| But he said it was completely wrong to suggest that Flowers in any way owed his position in the bank to the Labour party. | But he said it was completely wrong to suggest that Flowers in any way owed his position in the bank to the Labour party. |
| He added: "The idea that Ed Miliband would have appointed him to any business advisory board, had he known what his predilections for buying in the car whatever he was buying in the Mail on Sunday tape, is absurd. He would not have known anything about that. | He added: "The idea that Ed Miliband would have appointed him to any business advisory board, had he known what his predilections for buying in the car whatever he was buying in the Mail on Sunday tape, is absurd. He would not have known anything about that. |
| "When the Reverend Flowers gave evidence to the [Treasury] select committee, he was quite clear that the Co-op's expansion, in particular the attempt to buy 600 Lloyds branches, which the bank was in no position to do ultimately, had been actively encouraged by Conservative ministers at the Treasury. | "When the Reverend Flowers gave evidence to the [Treasury] select committee, he was quite clear that the Co-op's expansion, in particular the attempt to buy 600 Lloyds branches, which the bank was in no position to do ultimately, had been actively encouraged by Conservative ministers at the Treasury. |
| "So I think this is a sort of cheap political tactic, which is, A, untrue and, B, is in serious danger of backfiring on the government." | "So I think this is a sort of cheap political tactic, which is, A, untrue and, B, is in serious danger of backfiring on the government." |
| The Conservatives pointed out that Flowers himself had said he played a role as a member of the Co-op group board in approving the donations to Balls' office when he gave evidence to the Treasury select committee on 6 November. | The Conservatives pointed out that Flowers himself had said he played a role as a member of the Co-op group board in approving the donations to Balls' office when he gave evidence to the Treasury select committee on 6 November. |
| Flowers told the committee: "My recollection is that we paid for a particular researcher to assist the shadow chancellor in the work that he needed to do, and that we believed to be a legitimate and proper use of resources." | Flowers told the committee: "My recollection is that we paid for a particular researcher to assist the shadow chancellor in the work that he needed to do, and that we believed to be a legitimate and proper use of resources." |
| He replied in the affirmative when he was asked by Jesse Norman: "You knew about that and approved it as part of your role on the Co-op board?" | He replied in the affirmative when he was asked by Jesse Norman: "You knew about that and approved it as part of your role on the Co-op board?" |
| He also said that he had met Balls at Labour functions, but did not discuss Co-op business with him. | He also said that he had met Balls at Labour functions, but did not discuss Co-op business with him. |
| • This article was amended on 22 November 2013. The earlier version said the Charity Commission "announced on Thursday it would investigate the episode", meaning Paul Flowers' departure from the Lifeline Project charity after complaints about his expenses. The commission says it is not investigating that episode; what it said on Thursday was that it was writing to a charity of which Flowers is still a trustee, "to reassure ourselves that it is satisfied its governance systems are robust and there are no concerns relating to the issues raised by Lifeline Projects", and that it will write to all charities of which Flowers has been a trustee for the same purpose. | |
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