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politicalbetting.com » Blog Archive » The Co-Op in crisis – what now?
The scandal surrounding Paul Flowers has had plenty to keep the media entertained: drugs, sex, money, power and the fall from grace not just of a preacher-politician but also, and in parallel, that of the bank he once headed. However, while the human interest may lie in the man, the longer term political consequences of the events lie with the questions that must be asked of the Co-Op itself.
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The Guardian is still very, very disappointed with the Tories who have let themselves down very badly as we all know seeking to extract political advantage from the discomfiture of their opponents is something Labour would never do......
http://www.theguardian.com/commentisfree/2013/nov/22/paul-flowers-2015-election-coop-mid-staffs-tory
The Coalition Minsters were relaxed to see it acquire 630 Lloyds branches, great for competition but unsure about competence. Cable, & Osborne might have some thoughts on that. Labour can't keep banging the moral equivalence drum, given the supine nature of their creation, The FSA, and ministerial support for the Britannia merger, any questions about loan books? The close financial and political links between The Co-Op and Labour present a very different aspect to the problems of the Co-Op's governance. It would be a disaster for Labour if soft loans were being forced through by the politicised parts of the Group & Bank Boards.
Plenty of how on earth did Rev Flowers get there stuff from the media written this week, by commentators, and journalists who didn't think to pose the same questions five, six, ten years ago, 20-20 hindsight rules OK.
Sanctimonious twaddle - Co op esque.
That certainly sounds like bullshit but it's easy enough to check. That's odd? Why on earth wasn't the headline "someone with his background and lack of experience was appointed to such a senior position in the first place, shame of bank chief?"
Must just be an oversight obviously and the rest of papers didn't bother with his personal life.
But now the story has moved on, hasn't it? Perposterous! Surely he should have been arrested for lack of experience and his unsuitable background to run a bank??
LOL
Time to face the facts Back to Basics Tories. It's a sex and drugs scandal or nobody would care about Flowers to begin with.
Now if you could please just ask for little Ed to resign because of his close links to Flowers then that would be just perfect.
I can't think why Peston wasn't. ....
http://www.theguardian.com/business/nils-pratley-on-finance/2013/nov/22/regulation-is-lesson-of-co-op-bank
On the political aspect, it's a bit like a left-wing newspaper being taken over by more conservative management. They will consider whether a change in strategy is what customers want. The money involved is pretty small but I know lots of people who have an emotional bond to the Coop and would be sorry to see them become "just another big company". It'd be interesting to see some polling of customers.
A more significant political question is whether the concept of mutuals can adjust to the modern fiercely commercial era. We are all very nice about credit unions, and that's partly because they are usually locally-based and have some knowledge of the customers, enabling them to make more informed decisions about lending than Wonga. But my impression is that they're feeling pressure to merge and form larger units, which may erode their USP in the same way. In 20-30 years, will every major enterprise be a branch of a multinational conglomerate with no particular philosophy?
Ed Balls under pressure over links to Co-op Bank
Shadow chancellor attempted to woo voters in the Labour-affiliated Co-operative party during 2010 leadership contest
http://www.theguardian.com/politics/2013/nov/22/ed-balls-links-to-co-op-bank
Without the Daily Mail drugs splash, I doubt this story would have ever really got going...at worst, some bloke who was crap, got put on management board of a bank...well add that to the long list then.
But that been said, as David correctly points out, it is the fact this guy was let anywhere near the management of a bank that is the true scandal. Plus the fact there is a long list of previous, which appears that important people were blind to.
Compare this to Falkirk...I don't think outside of the political anoraks anybody really took any notice and only the Times & Mail have been plugging away with Union / Labour links angle..meaning that it hardly registers.
Add in a bit of sex, drugs and a bank, and all the media are digging at the story...even the BBC have decided it might be of some interest, although of course Ed has been smeared by that nasty Cameron and Ed Balls nothing to see move along (just like when the Telegraph dug up all that stuff on Ed or McBride stories).
As regards your second paragraph, many posters here are probably too young to recall what happened to the main Labour supporting paper in the very early 60.s It ran into financial problems and eventually metamorphosed into the Sun. Need I say more?
Yeah, right.
http://www.bbc.co.uk/news/uk-england-hampshire-25061357
No matter how much some tories on PB would like to put their fingers in the ears and silence all dissent on the matter, I'm afraid everyone knows full well why the tories getting so deeply involved in this scandal is such a staggeringly stupid move.
I'll ask you again, when are you going to call for little Ed and Balls to resign over their links to Flowers?
If not, why not?
However,
http://www.goodwithmoney.co.uk/ethical-banking/
On your second point Nick, you raise some interesting issues. One would expect small businesses (e.g. credit unions) to grow, but perhaps once they get too big, and if they get unweildy, they should be replaced by new businesses. Its known as creative destruction.
It is clear, you're trying to reference in the outcome of the phone hacking trials.
Any more violations, and your ability to instantly publish will be revoked until after the conclusion of the phone hacking trials.
I have not referenced the phone hacking trials. I have explicitly referenced three examples of how this scandal can backfire. None of which were phone hacking.
Are you saying I am not allowed to reference any scandals in case you mistake them for phone hacking?
Interestingly, Hamilton reckons he has no chance if it rains:
http://www.bbc.co.uk/sport/0/formula1/25060786
Have to say his assessment seems correct. Rosberg looks good in the rain, Hamilton much less so.
But will Tories lose in the court of voter opinion because, by default, bankers are associated with their party? Look at MPs' expenses: Labour MPs jailed but Tories derided for moats and duck houses. (Repost of joke: Google and Microsoft have agreed to government proposals to block searches using phrases associated with child pornography, though both companies expressed surprise when they learnt that paedophiles frequently use code words like "MPs expenses" and "government sleaze".)
Damian McBride reports in his book (chapter 47) that a Labour wheeze for ministers to publicly deny using drugs foundered when one feared being asked about class As, but it shows Labour's belief that the Conservative leadership is vulnerable on this issue.
That is the case, isn't? Just wanted to check.
Or is this just aimed at me personally? And if so, why?
SNP claims 'yes' vote forces English to share the pound
SNP ministers were last night accused of “treating Scots like fools” after claiming the English would be forced to share the pound if they win the independence referendum.
http://www.telegraph.co.uk/news/politics/10466211/SNP-claims-yes-vote-forces-English-to-share-the-pound.html
This ends the discussion.
Factually Incorrect. That was not a discussion it was a refutation.
Or haven't you grasped the obvious yet like all scottish tory surgers?
“The UK Government has signed up to respect the outcome of the referendum so we would expect them to respect the outcome of the referendum and therefore to respect the currency position that we have set out as part of that process.”
Still waiting.
That might be true of the Coop too, but it's hard to be sure (as Gerry gently notes, we're being anecdotal here) - that's why a poll would be interesting.
"The Scots must separate from the evil English, but at all costs we must retain the same currency!"
"Vote Yes to independence to give monetary policy to a foreign country!"
"Who needs a lender of last resort these days?"
As for 'forces': it's my understanding from the great amount written here that:
1) Scotland could use the pound without the British agreeing
2) However, that would mean that there would be no Scottish lender of last resort
3) Exchange rates would be dictated by the much larger British economy
4) In order to get any say over monetary policy Scotland would probably have to sign up to fiscal restraints and/or make other concessions
Using the pound is feasible, but utterly at odds with the concept of independence. Whilst deliberately pissing off the English by acting (presumably) like a pillock may help energise a certain part of the Yes camp it will also help to increase the near certain decline in bilateral trade between Scotland and the UK should independence occur.
Salmond's approach seems, from south of the border, to be as much about knocking the English as some sort of limiting factor on Scottish magnificence as anything else. That sort of thing may mean initial relations between the two countries (should Yes win) might well be frostier than would be the case. As well as "England holding us back" talk (which is soft), there's the hard reality of Faslane, and the fact our debt is bloody enormous because of two Scottish banks and a Scottish chancellor. The former could be resolved by a long-term deal to relocate and a quid pro quo over monetary policy, and the latter by a just division of the debt.
However, my suspicion is that the result of any negotiation between Scotland and the UK would be such that at best one side would consider it fair.
Edited extra bit: apologies for the overlong, rambly nature of this post.
http://www.bbc.co.uk/news/world-asia-25062525
1) The Scots are generally pro-EU (certainly compared with evil England). If they are, then they may as well accept their monetary subservience early on. Why vote to leave the UK and then hand monetary policy back to the country you've just left?
2) The UK is a single country. Although there are some differences between the UK (excluding Scotland) and Scottish economies they're reasonably closely aligned. The eurozone is not a nation-state (yet...). It also includes a bewildering variety of economies, guaranteeing that the monetary policy is wrong for many of them at any one time. That is what Scotland is ultimately signing up to. Hiding behind the Royal Mint for a few years is just delaying the inevitable.
Yesterday, 20 killed as Iraq Sunni mosques close over unrest - @AFP: http://yhoo.it/17WxDog
Los Angeles Times @latimes
Karzai on U.S.-Afghan security deal: "My trust with America is not good. I don't trust them and they don't trust me." http://lati.ms/r4hec
Link to where Osborne has said he has ruled out a currency union?
Still waiting.
Just think where we'd be if the Western Roman Empire had never plunged into darkness, or if Sulla had restored the Republic.
Mr. Pork, I was referring to things I've read on this site, not in newspapers. As for ignorance, that seems like a Yes man attacking an Englishman, which rather supports what I wrote.
They were entitled to insist that there was some banking competence on the Board and they did this by insisting that 2 people with banking qualifications were appointed. Other than that I suggest that they should and did have a fairly limited role.
And while I am making myself feel slightly queasy about writing a post supporting the FSA why is it the job of government to assess bids for either Britannia or the Lloyds branches? Clearly, again, there is financial solvency tests to be applied and the government has to be satisifed that the combined entity is not a danger to public funds but these are essentially business decisions by which the money of the participants is at risk.
I think the real problem here is the management and structure of the Co-Op itself and the blame is getting spread too widely diffusing the criticism they should face. If it is true that both of the banker appointments voted against the Britannia deal that really should have been the end of it. Ed Balls is not a banker and it was not his money. The board should have realised that they were not qualified to assess the risks they were running and have been prudent and cautious. They weren't and a worthwhile organisation has been terminally damaged as a result. They are to blame and we should not lose sight of this.
It is worse than blaming social workers for the murder of a child. The murderer is always fully responsible for their act.
Is this PB tory 'logic' in action? Try harder. Much, much harder.
If they go into administration, do they get 10 points deducted in the polls?
"As for ignorance, that seems like a Yes man attacking an Englishman, which rather supports what I wrote.
*tears of laughter etc.*
Is this PB tory logic in action? Try harder. Much, much harder."
Really? No effort to either apologise for being slightly obnoxious, or to acknowledge that calling someone 'ignorant' after he wrote that Salmond's approach seems to be to attack the English (which is itself an SNPer attacking an Englishman) is perhaps not helpful to your argument?
Just writing the equivalent of 'LOL' isn't an argument, it's a vacuum where an argument could have been.
Anyway, I've got writing to do now and F1 to consider later today (P3 is 1-2pm, so hopefully the pre-qualifying piece will be up around 2.15pm) so I'm not going to waste any more time putting foward points to which you respond with tired, vacant cliches.
Rather a sweeping generalization isn't it?
Scratch the surface of even the most inoffensive looking Tory and there's a little Enoch trying to get out........
LOL Is this the part where I'm supposed to call you anti-scottish for having a hissy fit? I don't think so. As I said you'll have to try much, much harder than that. Laughable. Either point me to where I even remotely referenced you being English or drop the absurd petted lip and victim act. It's pathetic. There are more than enough scottish tories on this site who start shrieking when questioned by me to reveal your bullshit as absurd. It's the policies and party that matters however much you incompetently try and spin it otherwise. You had nothing coherent to refute. Just baseless victim posturing and some absurd 'logic' that would make most people laugh out loud. Flounce away then. You are a prime example of those PB tories always willing to dish it out but who can never take it back, so then run off frightened with a few feeble insults as if that settled the matter.
That's not to say that the FSA did a good job. In fact it did a scandalously bad one last decade and still seems supine in the face of not just political pressure but simply the prevailing political mood. What the hell was it doing going along with the proposed Co-Op purchase of the Lloyds branches because the government favoured more competition? More competition is generally to be welcomed but not if that new entrant is considerably increasing its risk of running into serious problems in doing so.
"@Roger - it's dreadful the rubbish the right wing press print:"
I thought the Jonathan Friedland article you posted was far more interesting. Listen to Damien Green's nonsense this morning and you can see the insidiousness of employing someone like Cosby
Do you disagree with his analysis, or just wish it would go away?
Wasn't the Lloyds split mandated because Lloyds (after having taken over HBOS) was seen as being too large and uncompetitive?
I think it was the European Commission, although could be wrong. And I think the sale had to be done by the end of this year.
Therefore it was the EC that favoured more competition, and the government left trying to find the best way of making the split.
Crosby is a master strategising genius. For the kippers sadly for Cammie and Osbrowne.
At least his PR skills are top notch.
Splitting off some of the Lloyd branches (as has happened now) seemed much riskier to me at the time. Essentially you need to create a new organisation and systems, which is difficult.
I wonder how long the Co-op's troubles could have continued without notice (being covered up?) if Lloyds had not noticed. Perhaps in the long run the failure of the deal did everyone a favour...
BBC news ticker.
But that's exactly what he's doing.
Which makes you wonder why Osborne was so desperate to hand over national assets, ie Lloyds bank branches, to the banking wing of the Labour party.
But then that was in line with previous Cameroon strategy such as wanting to be 'Heir to Blair', buying into Gordon Brown's 'economic miracle', green taxes and attempting to repeat Iraq in Syria.
All this helps explain why the Conservative brand is more disliked than the Labour brand.
Simply that despite such favourable opportunities to do so the Cameroons have never tried to destroy the brand image of Labour.
In the late 1970s / 1980s the Conservatives did destroy the Labour brand image. This was a factor in their landslides in 1983 and 1987 and even more so in their 'fear factor' election victory in 1992.
Likewise Labour managed to destroy the Conservative brand image in the mid 1990s.
But the Cameroons failed to do likewise, not for lack of opportunity, not for lack of electoral necessity, not for lack of importance to the good of the country but simply because they never saw anything fundamentally wrong with what Labour were doing while in government.
(1) Co-op bank goes bust
(2) Labour overdraft called in
Perhaps the master strategist had already wargamed this one.
George Eaton has it about right.
`The Tories treated the Flowers scandal as a drowning man treats a life raft`
ww.newstatesman.com/politics/2013/11/tories-co-op-attacks-have-whiff-desperation
Cable & Osborne's judgement over Co-Op and Lloyds dear is questionable, if it was going against advice of B of E and Treasury. But then Balls and Co wanting the Co-Op to get bigger by taking over Britainnia is another. If the Co-op ran breweries, drinkers would be worried.
Nobody has anything against the English , the problem is that Westminster is bleeding Scotland dry , just as it does with much of England. Difference is we are going to do something about it.
We will know soon enough who the dumplings are.
But of course this would force the Tories to become even more sceptic, and presage Brexit, if and when Cameron was re-elected.
Clever stuff from Farage, if true.
It's not whether it's true or not since Farage has said a deal is at least theoretically possible.
It's the conditions and whether Cammie would countenance them. Conditions which, as Farage hints, would make it hugely unlikely.
Not to say there won't be plenty of Eurosceptics who might just force Cameron's hand if the EU elections are a nightmare for the tories. Particularly those tory MPs in marginal seats.
He's putting the ball in Cameron's hands for all tory Eurosceptics to see.
"I’m just saying, saying you would never do something, it’s just not something I’m going to say. I’d have thought David Cameron would rather go to his political grave rather than ever contemplate doing a deal with the ghastly Ukip – that’s my judgment, I could be wrong."
http://www.itv.com/news/update/2013-11-23/co-op-chief-admits-damage-done-to-bank-not-good/
Express - 3 minutes ago:
http://www.express.co.uk/news/uk/444658/Sleaze-shame-The-fall-from-grace-of-Co-op-Bank-boss-and-reverend-Paul-Flowers
Sydney Morning Herald - 31 minutes ago:
http://www.smh.com.au/world/the-scandals-that-brought-down-crystal-methodist-bank-chief-20131123-2y2p8.html
Nah....no one is talking about it.......
I don't think anyone else does now either. A slightly weird episode that did not do anything for Mr Hodges' credibility.
Oh, that's right! Salmond only spent money on lawyers to hush up the fact that he hadn't spent money on lawyers to get legal advice.....
http://www.coventrytelegraph.net/news/news-opinion/crystal-methodist-paul-flowers-three-way-6332855
But lost to Dave Nellist, who was later expelled from the party for being a member of Militant.....