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| Former Co-op bank chief Paul Flowers speaks of personal 'hell' | Former Co-op bank chief Paul Flowers speaks of personal 'hell' |
| (35 minutes later) | |
| Former Co-op Bank chairman Paul Flowers has spoken of his "hellish" personal ordeal and the government pressure he faced over the aborted Lloyds takeover. | Former Co-op Bank chairman Paul Flowers has spoken of his "hellish" personal ordeal and the government pressure he faced over the aborted Lloyds takeover. |
| He told Newsnight ministers had made it clear they wanted the deal - which was what first exposed the Co-op Bank's poor financial health - to go ahead. | He told Newsnight ministers had made it clear they wanted the deal - which was what first exposed the Co-op Bank's poor financial health - to go ahead. |
| Mr Flowers stepped down last summer and in November was arrested as part of an ongoing "drugs supply investigation". | Mr Flowers stepped down last summer and in November was arrested as part of an ongoing "drugs supply investigation". |
| He said he had undergone "cathartic" and "traumatic" addiction treatment. | He said he had undergone "cathartic" and "traumatic" addiction treatment. |
| The Methodist minister was thrust into the public spotlight last November when the Mail on Sunday published footage showing him allegedly buying illegal drugs. | The Methodist minister was thrust into the public spotlight last November when the Mail on Sunday published footage showing him allegedly buying illegal drugs. |
| He was arrested days later at his home in Merseyside and is currently on bail. | He was arrested days later at his home in Merseyside and is currently on bail. |
| 'More self-aware' | 'More self-aware' |
| Speaking exclusively to Newsnight, in his first interview since his arrest, Mr Flowers said "things got pretty hairy round about the end of November". | Speaking exclusively to Newsnight, in his first interview since his arrest, Mr Flowers said "things got pretty hairy round about the end of November". |
| As well as the newspaper allegations, he was also facing questions about his suitability to have run the bank after he was questioned by MPs and did not appear to know what its assets were. | As well as the newspaper allegations, he was also facing questions about his suitability to have run the bank after he was questioned by MPs and did not appear to know what its assets were. |
| "Up to then there hadn't been much commentary about things we were doing at the bank, but it got worse after that," he said. | "Up to then there hadn't been much commentary about things we were doing at the bank, but it got worse after that," he said. |
| "And for me personally there have been several moments where it has been hellish. | "And for me personally there have been several moments where it has been hellish. |
| "But during that process I've actually been very well supported by a raft of very good friends. You certainly find out who your friends are because a significant number of people in politics and in the Co-op, and some in the church, have been noticeable by their silence or their absence." | "But during that process I've actually been very well supported by a raft of very good friends. You certainly find out who your friends are because a significant number of people in politics and in the Co-op, and some in the church, have been noticeable by their silence or their absence." |
| After his arrest, he said he had sought "professional support for the issues that I was facing" and underwent a 28-day addictions treatment programme before Christmas. | After his arrest, he said he had sought "professional support for the issues that I was facing" and underwent a 28-day addictions treatment programme before Christmas. |
| "I found that both cathartic and traumatic, but it actually helped me to look at not so much the superficial issues of the addictions themselves, but the more deep-seated reasons why people resort to any sort of addiction, and for me that was I think life-changing," Mr Flowers said | "I found that both cathartic and traumatic, but it actually helped me to look at not so much the superficial issues of the addictions themselves, but the more deep-seated reasons why people resort to any sort of addiction, and for me that was I think life-changing," Mr Flowers said |
| "I think I'm now much more secure in my own skin, much more self-aware certainly than I was before. I put that down to the treatment at the hospital and I continue to go there every week for therapy." | "I think I'm now much more secure in my own skin, much more self-aware certainly than I was before. I put that down to the treatment at the hospital and I continue to go there every week for therapy." |
| Financial troubles | Financial troubles |
| Mr Flowers, 63, who has been a minister in Bradford since 1976, was chairman of the Co-op Bank from April 2010 to June 2013. | |
| The Co-op Bank had to be rescued last year after it was left with a £1.5bn capital shortfall, with many of its troubles stemming from its merger with the Britannia building society in 2009. | The Co-op Bank had to be rescued last year after it was left with a £1.5bn capital shortfall, with many of its troubles stemming from its merger with the Britannia building society in 2009. |
| The bank also had to write off about £500m of bad loans, and lost even more money on an expensive IT project. | The bank also had to write off about £500m of bad loans, and lost even more money on an expensive IT project. |
| Its poor financial health was first discovered in 2012, when it was trying to acquire more than 600 branches from Lloyds - a deal that never went through. | Its poor financial health was first discovered in 2012, when it was trying to acquire more than 600 branches from Lloyds - a deal that never went through. |
| Mr Flowers told the BBC he had come under "considerable" pressure to make that deal happen "from the present government - and mainly from Conservatives". | Mr Flowers told the BBC he had come under "considerable" pressure to make that deal happen "from the present government - and mainly from Conservatives". |
| He said: "They wanted a deal and remember that the government was - still is - the major shareholder of that bank because of the structural support it had needed in 2008. | He said: "They wanted a deal and remember that the government was - still is - the major shareholder of that bank because of the structural support it had needed in 2008. |
| "Clearly they wanted a deal which would help them in terms of public finances. They actually said that they were keen on Co-op becoming a much more significant player with more scale. | "Clearly they wanted a deal which would help them in terms of public finances. They actually said that they were keen on Co-op becoming a much more significant player with more scale. |
| "We would have had about 7-8% of the market if this had gone through. And there was pressure certainly from [junior minister] Mark Hoban, but I believe and know that that originated much higher up with the chancellor himself." | "We would have had about 7-8% of the market if this had gone through. And there was pressure certainly from [junior minister] Mark Hoban, but I believe and know that that originated much higher up with the chancellor himself." |
| New shares | New shares |
| Mr Flowers said he had received calls "two or three times a week" from the junior minister to check how the deal was progressing. | Mr Flowers said he had received calls "two or three times a week" from the junior minister to check how the deal was progressing. |
| "They wanted us to do it. They might say 'no' now, but I know that was what they wanted and that was the pressure they were applying." | "They wanted us to do it. They might say 'no' now, but I know that was what they wanted and that was the pressure they were applying." |
| In November 2013, the Co-op announced that a group of private investors, made up mostly of hedge funds, would inject nearly £1bn into the bank for a 70% ownership stake. | In November 2013, the Co-op announced that a group of private investors, made up mostly of hedge funds, would inject nearly £1bn into the bank for a 70% ownership stake. |
| On Monday, the bank said it planned to raise another £400m by issuing new shares following the discovery of additional costs. | On Monday, the bank said it planned to raise another £400m by issuing new shares following the discovery of additional costs. |
| The biggest part of the additional costs relates to PPI mis-selling and lapses in the provision of mortgages. | The biggest part of the additional costs relates to PPI mis-selling and lapses in the provision of mortgages. |
| The bank said the discovery meant it would make a loss of £1.2bn to £1.3bn for 2013. | The bank said the discovery meant it would make a loss of £1.2bn to £1.3bn for 2013. |
| The group is cutting staff and selling off parts of its business in an effort to survive. | The group is cutting staff and selling off parts of its business in an effort to survive. |
| The Co-operative Bank said that as of the end of 2013, it had cut 1,000 staff equating to about 14% of its total. | The Co-operative Bank said that as of the end of 2013, it had cut 1,000 staff equating to about 14% of its total. |
| The group is currently cutting staff and selling off parts of its business in an effort to survive. | The group is currently cutting staff and selling off parts of its business in an effort to survive. |
| You can watch the interview in full on Newsnight at 22:30 on BBC Two, or later via the Newsnight website or BBC iPlayer. |