"I think that the thing the British people want most of
all is banks which reflect their values - responsibility, integrity, reward
linked to effort... You [the Co-op] have always understood that ethics of responsibility,
co-operation and stewardship must be at the heart of what we do." - Ed Milliband[1]
ETHICAL BANKING is seen, somewhat cynically, as a
contradiction in terms by the Left. Unless such a bank is run, not by bankers,
but by ordinary everyday people, who may know little about banking, but knew
how such an institution should operate according to ethical principles; and at
the Co-operative Bank, ethical standards were to apply. Charities such as Oxfam
traded with them; as no doubt did certain other types like the Guardianista,
environmentalists, teachers, and much of the public sector, as well as the
Labour and Lib Dem party supporters and activists - while the Labour Party
itself took more out than it ever put in, via multi million pound soft loans.
The
Co-operative bank sniffley turned up its nose to hundreds of millions of pounds
of business each year, in order to keep its ethical label well polished - for there
would be no city slickers from London's banking centre sitting on the Co-op's
board - oh no. Only the everyday modern tinker tailor type from professions
like those found in teaching, local government, and on the factory floor.
Into
this menagerie of the banking ignorant came Paul Flowers with a copy of the
Idiots Guide to Banking tucked away in his brief case between the cocaine, crystal meth and ketamine - and he became chairman of the Co-operative Bank.
Flowers allowed himself to be talked
into buying the Britannia Building Society, by the Brown government. This
decision has almost broken the back of the bank which is now seeking a £1.5
billion bailout to keep afloat.
Flowers
resigned from his position as the bank's chairman last May. While, in 2011, he had
already resigned from Bradford City Council after pornographic material was
found on his council owned computer's hard drive when he submitted it for
repair. The ruling Labour group on Bradford City council suggested (deceptively) that his resignation was due to
time pressure; what with his role as a councillor and chairman of the Co-op
bank
The
Co-op bank (financially) sponsors 25 Labour MPs, and it gave £50,000 to the
opposition chancellor Ed Balls; and the bank has also loaned over £18 million
to the Labour Party[2].
What the banks Lib Dem customers think of this, Cable only knows.
In
March Flowers met with Red Ed, after which a £1.5 million pound loan was
granted to the Labour Party…a coincidence? Well hopefully it will all come out
in the wash, as, once the police enquiries into Mr Flower's activities are
complete; there will be an independent enquiry ordered by George Osborn, the
chancellor, into this sad state of affairs…what, after all, would the Rochdale
pioneers make of this sorry business?
IF YOU SWIM with the sharks, you had better be a
shark, or risk being eaten. This is the lesson the Co-operative bank failed to
learn, and it did so because traditional banking was anathema to them. At least
if the bank had appointed a chairman from the City of London, then it may not
have been put in the position it now finds itself; as he or she would have
refused the overtures to take over the Britannia Building Society that now
leaves the bank with a £1.5 billion black hole.
I
have a fondness for the Co-operative society, as it has played a part in my
growing up. In the 1950s the co-op had a dairy, bakery, grocery and department
store within a 200 yard radius of my home in Great Yarmouth. We also had a
co-op hall where we, as children, were sent to pick up our weekly ration of
orange juice. The hall also became a focal point for the community with nightly
bingo sessions.
The
co-operative movement did a great service to families like my own all over the
country. Its ethos served the very purpose the Rochdale pioneers insisted it
should: that it should exist on behalf of the poor, and the labouring men and
women there is no doubt. My family of grandparents aunts, uncles, and cousins;
as did millions of other families, saved the dividend (divi) stamps that were
issued with every purchase made from the Co-op.
BUT FOR SUCH a culture to embark upon banking
(especially in the modern age) it had better be prepared to abandon its former
social impulses; for they mean very little in the banking world; and if you
wish to compete in such an environment you need far better representatives than
Paul Flowers to run the bank.
The
board of the Co-op bank were lucky that the banks survival has managed to last
as long as it has. If a banking organisation, whose impulses are socialist,
seeks to survive in an environment where the impulses are competitive, then
such an institution must employ the best banking talent from their competitors
at a salary and bonus determined not on ethical grounds, but on the market
price.
To
disobey this precept is to find yourself in the Co-op's position. The world of
financial services is a highly competitive business; the greater its success,
the greater the tax intake by the British government. As far as London's
financial centre is concerned it brings in £20 billion each year to the
treasury in taxes which help fund our public services.
The
world of banking runs contrary to the impulses of collectivism that socialism
believes in - that the likes of Ralph Miliband believed in. Today's Labour
Party is as much to blame for the Co-op banks predicament as Paul Flowers.
Flowers was, as it turned out, as much a useful idiot for the Labour Party, as
he was for the banking industry.
As
chairman of the Co-operative Bank, he was charmed into lending the bank
depositors money, to the Labour Party at highly favourable terms of interest.
This buffoon not only holed the collectivist ship that was the Co-operative
Bank; but in doing so was flattered into doing it by a desperate Labour Party eager
for funds…to the tune of £18 million over several years.
Ed
Milliband has chided the Tories for months about greedy bankers and their
million pound bonuses: always making the connection between the Tory Party and
rich city bankers. Well, now the tables have been turned on the Labour Party. If
Cameron was as well connected with the City, as Milliband was to the Co-op
bank; then at least Cameron could boast that
his allegiances were with highly competent people in banking profession
- a claim, if made by Milliband, would only invite guffaws, if he made it about
the Co-op boardroom.
As
I have said, my family history, as well as millions of others, was connected to
the Cooperative society. It saddens me to see such an institution being exposed
to public ridicule because of cupidity
and stupidity of Paul Flowers. But I am left with the impression that he was
seen as an easy touch by the Labour Party, and if so, Miliband is as culpable
as Flower's in what may turn out to be the demise of the Co-op Bank.
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