Even Labour wants to give up on the Co-op Bank

It turns out the Labour Party is considering moving its banking facilities to the little-known Unity Bank.

by Emma Haslett
Last Updated: 24 Apr 2014

When even your best friend deserts you, you know you’re in trouble: the Labour Party is apparently considering moving its bank away from the Co-operative Bank, which would put an end to a relationship that’s been going on since the 1920s. It’s the latest in a long list of events that includes the discovery of a £1.5bn hole in its balance sheet, the ridiculing of former chairman Paul Flowers, the resignation of chief exec Euan Sutherland, the departure of fairy godmother Lord Myners, and much, much more…

Labour has had a long and beautiful relationship with the Co-op: at the moment its loan and current account facilities are worth about £1m, although the Co-op has provided very generous overdraft facilities to the party during various general elections.

But now Ian McNicoll, Labour’s general secretary, is reported to be considering moving those facilities to the Unity Trust Bank, a bank owned by a load of trade unions. And, er, the Co-op Bank, which has a 26.6% stake.

Is this a reaction to the Co-op Group’s decision to cut the £805,000-odd it gives the Labour Party every year? Depending on what side of the divide you’re on, it’s either a sign that the Co-op is straying even further from its roots (the bank is, after all, now 70% owned by hedge funds), or a valuable move away from its heavily politicised past. Either way, it’s another sign that times are a-changing at the Co-op.

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