Labour withdraws £1.2m from Coop Bank in bid to sever links with troubled group
Thursday 24 April 2014
Labour is looking to end its long-standing relationship with the troubled Cooperative Bank.
The party's general secretary Iain McNicol is understood to want to move a £1.2 million loan to the trade union-controlled Unity Trust Bank.
Its current account facilities are also expected to be shifted.
The move comes after a tumultuous period for the bank, which has seen big losses and the resignation of chairman Paul Flowers, who is now facing drug possession charges.
It would effectively draw a line under a financial relationship going back nearly a century.
The Cooperative Movement and Labour joined as parties in the 1920s and the link-up with the banking arm is believed to have started then.
Labour stressed that the change of tack was for “commercial reasons”, but the controversy over the past year is thought to have strained relations.
The BBC reported that the bank - now 70%-owned by American investors - was also keen to become “apolitical”.
A party spokesman said: “The Labour Party is constantly reviewing its financial arrangements. All decisions are taken for commercial reasons.”
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