David Cameron should beware taunting Ed Miliband over the Co-op Paul Flowers affair

 

Be careful what you wish for. David Cameron  should heed this warning as he lashes out at Ed Miliband  over the Labour Party's close ties to the Rev Paul Flowers, the "Crystal Methodist" former chairman of the Co-op Bank who was arrested on Friday for alleged drug-dealing.

Slinging mud - like cocaine - has a habit of coming back at the thrower. Labour has much to answer about the Co-op affair; the disgraced Flowers was appointed chairman under Labour's reign in March 2010 and vetted by the City's watchdog, the Financial Services Authority. However, it was under Cameron, and the two new regulators created specifically by the coalition to tighten banking supervision - the Bank of England's Prudential Regulation Authority and the Financial Conduct Authority - that Flowers was allowed to run riot at the bank.

So Tory MP, David Davis, is on the money to ask what due diligence done by the Treasury at a time when the Co-op's bid for 632 Lloyds branches was being encouraged. Not much is the answer; and here's why. Remember, this was just after the financial crash and everyone, led by the Chancellor, George Osborne, was championing the Co-op over rivals as they wanted a shiny, ethical knight in armour to help challenge the high street's big banks.

Now the story gets murkier. Lord King, the Bank of England's former Governor, is said to have warned Lord Levene, the boss of a rival bidder, there was a "political push" for the Co-op to win, and Levene warned Lloyds over the Co-op's dire finances. It didn't suit them to listen. That the Chancellor's knight has turned out to be a dirty old man sacked for having pornography on his computer as recently as 2011, fiddling the expenses of the charity he worked for and now at the Co-op, is as uncomfortable for the coalition as it is for Labour. You couldn't make it up.

Yet the culprits are the regulators. They have many questions to answer: how did the old FSA, chaired by Lord Turner and led by Sir Hector Sants, let Flowers through? We know the regulators were worried enough about his lack of banking experience that they insisted on two deputy chairmen. If this is true, a few background checks by the FSA's ex-coppers should have shown up his colourful past as a Labour councillor in Rochdale and Bradford.

Or did the FSA never look out of its Canary Wharf glass-house and only tick boxes? And how did the FSA's Graeme Hardie, who vetted Flowers, get a non-executive job at the Co-op? Should John Griffith-Jones, the ex-head of KPMG, which audited the Co-op, HBOS and Bradford & Bingley, stay on as FCA chairman? And why did the ex-FSA boss, Sants, resign so suddenly from Barclays a few weeks ago?

Rather than waste time taunting Miliband, Cameron must ensure the new inquiry he has launched answers these questions. More pertinently, those involved must be punished and held accountable. It would be beyond irony if Flowers went to jail for drug-dealing but not punished for blowing up a bank and causing hard-working people to lose their savings.

Banks are dead: the new technology predators

Don't worry about the banks; they're on their way out. If Thomas Power, the top technology thinker, is right the world's big banks will be smashed to pieces by the end of the decade. Their predators? Technology giants such as Amazon, Google, Facebook, Apple (right) and Twitter, as well as China's Alibaba.

Here's how: these giant beasts already have the payments and billing systems in place - Amazon has 1-Click, Google has its new debit card, the Google Wallet Card, Apple has the payment system for iTunes, eBay has Paypal and so on. They also have the customers with mobiles - a billion people use Google's Android phone and around 600 million people have an iPhone. Amazon is close to launching a free phone to its customers - 67 million customers use its site daily. These lords of the clouds also have everyone's personal details; so at the slip of a mouse, they can offer you home loans, insurance, banking, credit cards as well as your mobile service. Now you see why Amazon disclosed on Friday it's in talks with Transport for London about offering collection points at redundant Tube ticket offices.

If this sounds sci-fi, read the brilliant new biography of Jeff Bezos and the age of Amazon - The Everything Store - by the US reporter, Brad Stone, which won the FT-Goldman Sachs Business Book of the year last week, for a feel for the scale of Bezos's ambition. Barnes & Noble didn't get what Bezos was doing - and nor do today's bankers. What they need to know is that Bezos is not a simple retailer - he's a disrupter of anything.

When Amazon and the other internet beasts have gobbled up the banks, they'll most likely spread their claws into other utilities such as energy. But there will be anti-trust issues to deal with. By then, Bezos will most probably be the next US president. Why else would he buy The Washington Post?

The new girl's network

What I love about Birgitte Nyborg, Denmark's ex-prime minister in the Borgen television series, is her boldness in plotting her comeback. There's no sulking, no moaning about the old boy's network; she just sets up her own party. But that's easy, you say, it's fiction, but life has a funny way of imitating art; a real Danish MP - a Conservative - recently introduced a bill of rights for prostitutes inspired by Borgen.

Has the Tory MP Nick Boles got the Borgen bug too? You might think so after his suggestion last week that the Tories can only get the young on side by disinfecting the party brand with a new name such as the National Liberal party. Like Boles, Theresa May is another MP who bravely dared talk of detoxing the brand, and has made a big play for making big business more accountable and public life cleaner. Maybe Boles and May should talk more; Boles could be Bent Sejro to May's Nyborg or vice versa.

Mandelson's makeover

Here's a tale that needs no spin. I'm told the reason Lord Mandelson was so keen to appear on early morning TV shows while Labour's spin-doctor was because he liked getting his make-up done professionally for the day. The make-up lady of the big US broadcaster who used to powder him for the shows says he was always particular about how she applied the eye-liner.

Voices
On the last day of campaigning before the polling booths open, the SNP leader has written to voters in a final attempt to convince them to vote for independence
scotland decidesIs a huge gamble on oil keeping First Minister up at night?
Arts and Entertainment
Rosalind Buckland, the inspiration for Cider with Rosie died this week
booksBut what is it like to be the person who inspires a classic work of art?
Life and Style
techApple has just launched its latest mobile operating software – so what should you do first?
News
A male driver reverses his Vauxhall Astra from a tow truck
newsThe 'extremely dangerous' attempt to avoid being impounded has been heavily criticised
PROMOTED VIDEO
Arts and Entertainment
Lionel Messi in action for Barcelona
filmSo what makes the little man tick?
Arts and Entertainment
tvReview: An undercooked end (spoiler alert)
News
i100
News
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
Pharrell dismissed the controversy surrounding
musicThe singer said 'the last thing I want to do is degrade'
Sport
Cesc Fabregas celebrates his first Chelsea goal
footballChelsea vs Schalke match report
Arts and Entertainment
Toby Jones (left) and Mackenzie Crook in BBC4’s new comedy The Detectorists
tvMackenzie Crook's 'Detectorists' makes the hobby look 'dysfunctional', they say
Life and Style
fashion

Olympic diver has made his modelling debut for Adidas

News
i100
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Trainee Recruitment Consultant Birmingham

£18000 - £23000 per annum + Comission: SThree: The SThree group is a world lea...

Trainee Recruitment Consultant - Birmingham - Real Staffing

£18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...

Recruitment Consultant - Soho - IT, Pharma, Public Sector

£20000 - £25000 per annum + OTE £35,000 first year: SThree: The SThree group i...

Sales Executive

£20 - 24k (Uncapped Commission - £35k Year 1 OTE): Guru Careers: We are seekin...

Day In a Page

Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

Exclusive extract from Janis Winehouse's poignant new memoir
Is this the role to win Cumberbatch an Oscar?

Is this the role to win Cumberbatch an Oscar?

The Imitation Game, film review
England and Roy Hodgson take a joint step towards redemption in Basel

England and Hodgson take a joint step towards redemption

Welbeck double puts England on the road to Euro 2016
Relatives fight over Vivian Maier’s rare photos

Relatives fight over Vivian Maier’s rare photos

Pictures removed from public view as courts decide ownership
‘Fashion has to be fun. It’s a big business, not a cure for cancer’

‘Fashion has to be fun. It’s a big business, not a cure for cancer’

Donatella Versace at New York Fashion Week