LAST weekend saw the extraordinary revelations about Rev Paul Flowers.

A Methodist minister, he was the chairman of the Co-operative Bank from March 2010 to June this year.

The newspaper articles alleged an enthusiasm for hard drugs. Whilst a significant personal tragedy for him, readers will be asking the question: what has this to do with Wyre Forest?

Under his watch the Co-op Bank collapsed. Because of catastrophic failures of management, many bond holders living in Wyre Forest lost money.

But why was this any different from other bank scandals?

This latest bank catastrophe is significant for a number of reasons.

Paul Flowers was appointed chairman in 2010 – three years after the banking crises started to unfold. Yet when he came before the Treasury Select Committee recently, it was clear that he was not fit to run a bank.

He knew little of the details of the organisation he ran and very little about current affairs. The fact that he is now facing allegations of drug use is important because banks are required to continue to monitor effectiveness of their key personnel.

So what on earth was the regulator doing allowing this man to run a bank that he didn’t know how to; and allow the bank to fail to scrutinise his performance?

There are questions about political intervention. The Co-operative Group is politically active. There is no secret about this: they reveal the fact that they donate to the Labour Party in general and 30 Labour MPs, labelled “Labour and Co-operative”, specifically.

Shadow Chancellor Ed Balls is one whilst Ed Miliband appointed Flowers a member of Labour’s Industry and Finance Board.

All this is fully declared and perfectly legal. But there are questions about Ed Balls’ part in the purchase of Britannia, which led to the collapse of Co-op.

Flowers told us Balls encouraged the deal when he was City Minister. But did Labour MPs know Flowers had personal problems and was not fit to run Co-op? Did they influence his appointment?

The Treasury Committee (of which I am a member) is digging hard into this.

The Co-operative Group is an important organisation that has high morals. That it has suffered this catastrophic failure of management in the bank is tragic.

But it is right that these hard questions are asked – and answered – to ensure that members and bond holders do not have their trust abused.

CONTACT YOUR MP

  • Email: mark.garnier.mp@ parliament.uk
  • Telephone: 020 7219 7198 or 01562 746771.
  • Write: 9a Lower Mill Street, Kidderminster, DY11 6UU, or House of Commons, Westminster, London