Ed Miliband accuses PM of 'smears' over Co-op's Flowers

Cooperative Group undated handout photo of Paul Flowers Paul Flowers chaired the Co-op Bank from April 2010 to June this year

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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 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.

Ed Miliband said David Cameron should be concentrating on "sorting out a serious situation"

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.

"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."

'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.

It has since emerged that:

  • Mr Flowers resigned as a Labour councillor in Bradford in 2011 after "inappropriate but not illegal adult content" was found on his computer
  • He resigned from running drugs charity Lifeline in 2004 after allegedly lodging false expenses claims. According to Thursday's Daily Mail, the figure involved was £150,000. The Charity Commission said it had received a complaint at the time but had no evidence Mr Flowers "acted in bad faith or fraudulently"
  • He was convicted of drink-driving in 1990. A Methodist Church disciplinary hearing was held but he was allowed to continue his role in the Church
  • In 2005, he referred himself to local authority watchdog Standards Board for England for sending a "joke" message to council colleagues that was alleged to have had "sexual connotations", according to the Daily Telegraph
  • Co-op Group has asked Mr Flowers to return £31,000 he has been paid as its vice-chairman since resigning as chairman in June. A source told BBC News: "We want it back, because he has brought Co-op into disrepute."
  • The Co-op Group is also investigating Mr Flowers' expenses, computer and emails

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".

Labour and Co-op Group

  • February 2010 - Paul Flowers attends Downing Street reception, with Ed Miliband present
  • April 2010 - Mr Flowers appointed chairman of Co-op Bank and vice-chairman of Co-op Group
  • September 2011 - Mr Flowers resigns as Labour councillor in Bradford after pornography is found on his council laptop
  • 31 March 2012 - Co-op Group donates £50,000 through Labour Party to support shadow chancellor Ed Balls's office
  • 6 March 2013 - Ed Miliband meets Mr Flowers to discuss banking reform
  • 1 April 2013 - Labour takes out £1.2m loan from Co-op Bank, to be repaid by 2016

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.

Labour claims Treasury ministers had 30 meetings with the Co-op Bank over its future but Conservative Party chairman Grant Shapps said that was not the same as taking money from it.

He said it was in the "public interest" to investigate the way the "much-loved" bank had been run - but also what he said were the close links between Mr Flowers and senior Labour figures.

"How is it that somebody who is so inappropriate to be the chairman of the Co-op Bank was also the person signing off donation, at what seems like 'mates rates'... to Ed Miliband, to the Labour Party, for millions of pounds?", he said.

He said the Labour leadership must have been aware of questions about Mr Flowers after he had resigned as a Labour councillor.

Mr Flowers had also told MPs he had personally approved a £50,000 donation to Ed Balls, said Mr Shapps.

This is strongly denied by Mr Balls, who says Mr Flowers had no involvement in the donation.

The shadow chancellor says he never had a personal meeting with Mr Flowers or any direct phone or email contact with him, although he met him at a group dinner.

He says David Cameron's claims he and Mr Miliband were aware of concerns about Mr Flowers but did nothing are a "lie".

Lib Dem leader Nick Clegg, said the stories about Mr Flowers "all sound extremely murky" and "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.

Start Quote

So why did the FSA allow the Co-op Bank to continue to chunter down the track towards this proposed massive expansion?”

End Quote

"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".

The independent inquiry cannot begin until police have concluded their investigation into allegations that Mr Flowers bought and used illegal drugs.

Lifeline complaint

The Charity Commission said it "does not appear" that it was provided with any evidence that Reverend Paul Flowers "acted in bad faith or fraudulently" in claiming expenses from the Lifeline Project charity.

Lifeline says it was concerned by the scale and type of expenses, such as meals and travel, claimed by Mr Flowers when he was a trustee.

It launched an investigation but Mr Flowers left the charity before it was completed.

The Charity Commission has confirmed that Lifeline informed it of concerns about Mr Flowers' claims.

However, it says it appeared that trustees of the charity had been able to claim expenses such as a company credit card, car lease and mileage, which were not allowed under charity or company law.

"It seems that expenses arrangements were agreed by the charity's board. None of the files we currently hold suggest that the charity or the Commission considered reporting the matter to the police.

"We cannot, therefore, at this time verify media reports that a former trustee 'stole' money from the charity or made 'fraudulent claims'," said the charities regulator.

The Commission says Lifeline Projects did ask it for advice taking legal action to recover £65,000 of expenses.

However, the Commission says it told Lifeline it had not provided any evidence to support claims Mr Flowers had acted in bad faith or had claimed for expenses that were not related to the charity's work.

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  54.  
    09:13: Deputy PM on debates Call Clegg

    Nick Clegg has told LBC he is prepared to stand up and defend the government in the TV debates if David Cameron doesn't take part. The deputy prime minister says he is "about the only person who is prepared to step up to the plate and actually defend the record of this government."

     
  55.  
    09:06: 'Down to the broadcasters ' Norman Smith BBC Assistant Political Editor

    It all hinges on what the broadcasters do now. At the moment, they are saying nothing in public. But privately, they seem determined to tough this out.

     
  56.  
    09:05: Labour's Scottish challenge
    Ballot box

    There are other political stories today, even if the debate row is drowning out coverage. Prof John Curtice has been speaking to BBC Scotland about Labour's prospects north of the border at the election. He said there may be tough times ahead for the party after new polling by Tory peer Lord Ashcroft suggested big gains for the SNP at May's election.

     
  57.  
    @xtophercook Chris Cook, Newsnight policy editor

    tweets: I don't get why CCHQ doesn't just say "Last time, we think the debates were a distraction and we would rather run a traditional campaign"

     
  58.  
    09:03: Your say

    Politics Live readers on TV debates

    Mr Cameron, in effect, is the CEO of the United Kingdom. His duty is to abide by what the electorate requests or risk losing power, he has already lost face. He doesn't want to stand in front of his company's employees and explain his failures.

    Chris

    Either David Cameron or Ed Miliband will be obliged to form a (probably minority) government on 8th May so why is Cameron running scared of a 1 to 1 debate with Miliband?

    ... The public want to see an old fashioned 1 to 1 between the 2 potential Prime Ministers and if it doesn't happen it will be David Cameron's fault.

    Andy Kirkland

    If the conservatives think Ed Miliband is so weak why is David Cameron not willing to go head to head with him?

    Pat Pierce.

    Cameron is always going on about the achievements of this Government, how at all costs the good work being done should continue and not change course, the long term etc. If he speaks so passionately about this and how anything else would be utter chaos and doom, and he wants people to vote Tory, why does he not go all out in TV debate with Miliband and pull opposition apart and vice versa, so the voters get to see a real debate.

    K.Pearce

     
  59.  
    @IsabelHardman Isabel Hardman, assistant editor at The Spectator

    tweets: Tory MPs are in a mutinous mood over defence spending, dismissed as having "no votes". Me in today's Times

     
  60.  
    08:47: 'Thatcher would have debated' BBC News Channel

    Lord Ashdown tells the BBC he can't imagine Margaret Thatcher refusing to take part in debates - he says David Cameron's decision is "unbelievable". The former Lib Dem leader adds that broadcasters should go ahead with their plans and "empty-chair" the prime minister if needs be.

     
  61.  
    08:46: Greens on TV debates
    Nathalie Bennett

    The Green Party has just released a statement on the TV debate row: "This swerve by Cameron will further damage trust in our political system. Not only is Cameron's announcement cowardly but it also shows his contempt for the electorate.

    "People want to see a set of debates between all major party leaders, yet the Prime Minister is clearly scared of scrutiny.

    "Natalie is very much looking forward to debating with the other 6 party leaders. David Cameron must not be allowed to scupper these plans."

     
  62.  
    @jimwaterson Jim Waterson, BuzzFeed UK deputy editor

    tweets: Happy to host a seven-way leaders' debate over Twitter group DMs at a time that suits the parties.

     
  63.  
    08:40: What's happened so far?

    It's been a busy morning in Westminster. Here's a quick recap for those of you heading to work or just arriving at the office:

    There's bound to be plenty more to come. We'll bring you all the latest news and analysis. Don't forget to let us know your views; emails is politics@bbc.co.uk or tweet @bbcpolitics.

     
  64.  
    @kayburley Kay Burley, Sky News presenter

    tweets: So @campbellclaret says he's been prepping @Ed_Miliband for #TVdebates by 'playing David Cameron' Now there's a thought...

     
  65.  
    08:27: Harvey Proctor BBC Radio 4 Today

    "The police wish to interview me", Mr Proctor says. He wants it to happen "at the earliest opportunity", he adds.

     
  66.  
    08:25: Harvey Proctor BBC Radio 4 Today

    Harvey Proctor says he was a discreet man and he would not have discussed his sexuality with senior colleagues in the Commons. He tells Today he did not know about alleged sex abuse. He says he is "sure" some of the allegations are true, but others are not.

     
  67.  
    08:24: Harvey Proctor on claims BBC Radio 4 Today

    Former Conservative MP Harvey Proctor is speaking to Today after his house was searched by police. The police have told him they are investigating historical sex abuse allegations going back to 1970s and 1980s, he says. The offences he committed in the past would no longer be offences - they related to the age of consent, he adds. He denies ever attending sex parties of being part of any "rent boy ring" with high profile figures.

     
  68.  
    08:21: Debate fallout BBC Radio 5 live
    Lord Carlile

    Reaction to the debates row is pouring in. This is from Liberal Democrat peer Lord Carlile:

    "I think we should found our debates on the system we've got, upon a credible approach and treating the public as intelligent people and the Prime Minister I'm afraid is running scared from it because he knows how well Nick Clegg did at the last election so he doesn't want him in the debates."

    On plans for a seven-party debate, he adds: "I most certainly will not be watching a bun fight of that kind because I think it will be extremely uninformative. I think the public should be treated with respect in this controversy and the public expect that this will be resolved on the basis of the election system we have, like it or not."

     
  69.  
    08:19: Lord Ashdown on debates BBC Radio 4 Today

    The biggest losers from this are the British people, says Lord Ashdown. He accuses the prime minister of "cowardice" and suggests the debates could become a right for the British people.

     
  70.  
    08:16: Lord Ashdown on debates BBC Radio 4 Today

    Lord Ashdown asks "why on earth" should David Cameron be allowed to "veto" debates? He says the Lib Dems will take part in whatever debates take place. He says Nick Clegg will be happy to debate Ed Miliband on the government's record if Mr Cameron won't.

     
  71.  
    08:15: Lord Ashdown on debates BBC Radio 4 Today
    Lord Ashdown

    Lord Ashdown, chairman of Liberal Democrats election campaign, says David Cameron is frightened of "defending his own position" during the TV debates. The peer says what the prime minister is proposing is "ludicrous" and highlights it would come out before the Conservative election is published.

     
  72.  
    @georgegalloway George Galloway, MP

    tweets: How pathetic must a PM be that he is "frit" to debate with Ed Miliband....?

     
  73.  
    Norman Smith BBC Assistant Political Editor

    tweets: Ed Miliband met BBC boss Tony Hall last night to urge broadcasters to stand firm over #tvdebates

     
  74.  
    @tnewtondunn Tom Newton Dunn, The Sun political editor

    tweets: "Cameron accused of running scared on TV debates..." is the headline on BBC bulletins, who stand to lose out considerably by No10's offer.

     
  75.  
    08:07: Devolution for Cornwall
    Cornwall flag

    The Liberal Democrats want to offer the people of Cornwall a legislative assembly with powers to run local services. The option of a Cornish Assembly would be put to a referendum under the party's plans. Nick Clegg - who is in Cornwall today - says the reform would mean housing, healthcare and transport decisions were taken locally.

     
  76.  
    07:58: 'Rule out SNP pact'
    Scottish Labour

    The Scotsman reports this morning that Labour's Scottish MPs are demanding a deal with the SNP is ruled out before the election. The newspaper says the call came yesterday at a weekly meeting of party MPs from north of the border. There were "no dissenting voices" when the issue was raised by Edinburgh MP Ian Murray, the report adds.

     
  77.  
    07:50: Former MP's home searched

    The home of Harvey Proctor, the former Conservative MP who left Parliament in the 1980s, has been searched by police investigating historical allegations of child abuse and murder or manslaughter. Our home affairs correspondent Tom Symonds says the move is part of Operation Midland, launched after a man in his forties alleged he was abused by a group of "prominent individuals" in the 1970s and 1980s.

     
  78.  
    Ross Hawkins Political correspondent, BBC News

    tweets: If parties invited to debates insist they happen & broadcasters stand by plan to press on whoever turns up, this will be an almighty scrap

     
  79.  
    07:39: Blair Labour donation
    Blair

    The Times is reporting this morning that former prime minister Tony Blair has donated £106,000 to Labour candidates around the UK. The money, from Mr Blair's private fortune, will be divided between 106 of Labour's target seats, the newspaper says.

     
  80.  
    07:32: Your say

    A selection of comments from Politics Live readers on the TV debates

    Rather than what broadcasters or what political parties want regarding debates, what about what the electorate wants?

    The debates at the last election and the Scottish referendum debates were widely watched and helped reconnect the public with the political process. They took leaders out of their ivory towers and made them more accountable to the people they are supposed to lead.

    Cameron refusing to take part in debates shows his contempt for this process and a fear of public scrutiny. I really think the Tories have made a major error of judgement here, the electorate will not be gentle.

    Ged Roddam

    The prime minister has stated he only wants one debate. It is not the broadcasters who should pressurise otherwise. They need to respect his position on this, as do the other parties who are name calling.

    Broadcasters would not be pressurising the CEO of a large company on how to run their business...

    Sara Brewer

    Do you agree? Email is politics@bbc.co.uk with your views.

     
  81.  
    @rosschawkins Ross Hawkins, BBC political correspondent

    tweets: Lib Dem view on debates is they'll do them even if not happy about format. Will broadcasters - as they've suggested - go ahead without PM?

     
  82.  
    @PickardJE Jim Pickard, Financial Times

    tweets: Alastair Campbell is outraged by Cameron wriggling from TV debates. Reminded he blocked Blair from doing so in 1997 he tells #today: "True."

     
  83.  
    07:22: One man debate? BBC Radio 4 Today

    Asked if Ed Miliband should offer to take part in a debate alone, Alastair Campbell says it's a "tactical judgement", but Mr Miliband should "probably" press ahead without David Cameron. It's the interest of both the Labour Party and the country as a whole that an Ed Miliband v David Cameron takes place, Mr Campbell adds.

     
  84.  
    @Kevin_Maguire Kevin Maguire, Daily Mirror associate editor

    tweets: TV election debates are important in principle. If we adopt a written constitution, put them in alongside secret ballots and spending caps

     
  85.  
    07:15: Campbell on TV debates BBC Radio 4 Today

    Alastair Campbell, Tony Blair's former director of communications, says David Cameron's decision to only take part in one TV debate is "democratically wrong and morally cowardly". He says Mr Cameron should be honest about why he doesn't want to take part - "he just doesn't want to do them", Mr Campbell says.

     
  86.  
    07:11: One-on-one debate? Ross Hawkins Political correspondent, BBC News

    Is it possible for a "one-on-one" debate to go ahead with just one person? Labour thinks so, our political correspondent reports. The party will insist the plan is credible and could lead to Ed Miliband taking part in a debate with a presenter.

    "If that were to happen, David Cameron would be pursued by a man in a chicken costume throughout the campaign, I'm certain of that", our correspondent adds.

     
  87.  
    07:06: Telegraph on debates The Daily Telegraph

    The Telegraph has penned an editorial which says the televised discussions are good for democracy. The paper argues the debates would "inject some much-needed spontaneity and excitement into the stage-managed, safety-first election campaigning". The piece says broadcasters now need to work together to make sure "some sort of debate" does take place.

     
  88.  
    Norman Smith BBC Assistant Political Editor

    tweets: Labour say Ed Miliband will still take part in Ch4//Sky head to head debate without the PM

     
  89.  
    @NickyMorgan01 Nicky Morgan, minister for women

    tweets: Looking forward to today's #CWIB2015. Bringing together ambitious business women for masterclasses and mentoring. #womensday

     
  90.  
    06:55: 'Move Parliament to Manchester' The Guardian

    Earlier this week, we reported Commons Speaker John Bercow saying the Houses of Parliament may have to be "abandoned" within 20 years without extensive repair work. There have been a number of suggestions on possible alternatives. Today, Simon Jenkins writes in the Guardian that Parliament should be moved to Manchester, arguing it would be good for democracy.

     
  91.  
    06:51: Broadcasters 'pressing ahead' Norman Smith BBC Assistant Political Editor

    "Talking to some of those involved last night, my impression at the moment, is the broadcasters are intent on toughing this one out... They do not think that one 90-minute debate involving eight parties in the next fortnight or so is acceptable. They do not think it is acceptable one party should have the power to veto what goes ahead. As things stand they are intent on pressing ahead with the debates as currently scheduled."

     
  92.  
    06:42: Cameron's debate plans Norman Smith BBC Assistant Political Editor

    Our correspondent has been analysing last night's big debate news.

    The effect is to swing a huge wrecking ball in the direction of the broadcasters' plans for these TV debates, he says. It may demolish all hopes for a debate to be held, or may leave one "paltry" 90-minute debate later this month.

    The clear view of Downing Street is that this is the fault of broadcasters, who they accuse of coming forward with proposals without consultation, to a timetable that was never going to be acceptable, and of failing to get the parties to get together for meaningful negotiations, our correspondent says.

     
  93.  
    06:39: TV debate reaction
    HuffPo

    There is plenty of reaction around to Downing Street's one-debate proposal. Including this, which leaves little doubt as to where the Huffington Post stands on the issue.

     
  94.  
    06:30: Scotland Ashcroft poll

    In other political news you may have missed from last night, a poll suggested the SNP could win Gordon Brown's seat - Kircaldy and Cowdenbeath - at the election in May. The poll by Lord Ashcroft also suggested Charles Kennedy, the former Liberal Democrat leader, could also lose his seat to the nationalists. It's the latest polling which suggests the SNP could make significant gains on 7 May.

     
  95.  
    06:25: The papers
    Daily Telegraph front page - 05/03/15

    Downing Street's announcement that the prime minister will only take part in one TV debate ahead of the election features in several papers, with The Daily Telegraph describing it as an "ultimatum" to broadcasters. The BBC's Alex Kleiderman has the full round-up of the nationals here.

     
  96.  
    06:20: Child benefit changes? BBC Newsnight BBC Two, 22:30

    The BBC has learned the Conservatives are considering limiting child benefit to three children. As Newsnight reported last night, the Treasury has "softened" to the idea, which could save an estimated £300m a year.

     
  97.  
    06:15: Debate bombshell
    Leaders

    In case you missed it, there was a significant development last night on the TV leaders debates, after Downing Street wrote to broadcasters to make a "final offer" of only one debate with seven, possibly eight, leaders. Other parties criticised the PM, accusing him of "acting like a chicken" and the broadcasters have said they will respond to the proposal in due course. Expect more reaction on this story this morning.

     
  98.  
    06:10: Good morning

    Hello and welcome to a fresh Thursday's political coverage. Nick Eardley and Matthew Davis will bring you all the action, reaction and analysis in text and you'll be able to watch and listen to all the main BBC political programmes, from Today and Breakfast through to Newsnight and Today in Parliament. Don't forget you can get in touch by emailing politics@bbc.co.uk or via social media @bbcpolitics. Here's how Wednesday unfolded.

     

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