Michael Dugher MP, Labour’s Shadow Minister for the Cabinet Office, has today written to Sir Jeremy Heywood calling for a public and written assurance that any inquiry into revelations regarding the Co-operative Bank must be genuinely independent and robust and not become some sort of Trojan horse for a party political attack.

The full text of the letter is below:

Dear Sir Jeremy,

You will be aware that there is growing concern over the politicisation by senior Government Ministers of recent revelations regarding the Co-operative Bank. It cannot be acceptable that issues which could affect the deposits of thousands of families and businesses up and down the country are subject to party political point-scoring and smear.

All in the Labour Party have been shocked at recent events and we fully back an independent inquiry to ensure such events cannot be repeated.

We believe, however, that as Cabinet Secretary it is your responsibility to ensure that any such inquiry must be genuinely independent and robust. It must not become some sort of Trojan horse for a party political attack. We would therefore be grateful if you could provide a public and written assurance that this will be the case.

The purpose of the inquiry must be to examine and confront the regulatory problems faced by the Co-op Bank. In particular, the inquiry should examine why Mr Flowers was appointed to such a senior position at the Bank, why the Co-op was able to proceed with its attempt to purchase Lloyds branches and whether the new regulators are sufficient to prevent a repeat of recent events.

I hope that you will also be able to confirm that the scope of the inquiry will encompass the role and recent actions of current Government Ministers. This must include examining what due diligence was done by the Chancellor and the Treasury into the state of the Co-op Bank and its leadership when Ministers were encouraging the bank’s failed bid for 632 Lloyds branches. In light of concerns expressed by the FSA, the public will want to know why this was allowed to proceed. It will also be important to establish the reasons behind the Chancellor arguing in Brussels for the Co-op Bank to be spared from tougher capital rules.

Financial institutions need to be headed by appropriate and qualified individuals, prevented from engaging in practices which can put at risk the deposits of customers and overseen by rigorous authorities. Labour will support an inquiry with these objectives which is free from political bias. Public confidence is vital. This inquiry must not become a political sham.

Yours sincerely

Michael Dugher MP
Shadow Minister for the Cabinet Office

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