Former Co-op Bank chairman Paul Flowers has blamed pressure from the government as the main reason for the group’s downfall.
In an interview with Jeremy Paxman on BBC’s Newsnight Programme, Flowers alleged that ministers put pressure on him to go ahead with the failed attempt to buy more than 600 branches of Lloyds’ Verde portfolio.
Flowers claimed he had received calls from then junior Treasury minister Mark Hoban “two or three times a week”. “They wanted the deal,” he said.
“He was the junior minister, I know,” he said. “This originated from much higher up.”
“Clearly they wanted a deal which would help them in terms of public finances. They actually said that they were keen on Co-op becoming a much more significant player with more scale,” Flowers said. “There was pressure certainly from Mark Hoban but I believe and know that that originated much higher up with the chancellor himself,” he added.
A Treasury spokesman said: “The selection of the Co-op and the decision on whether to proceed with the Verde deal was a purely commercial matter for Lloyds Bank and the Co-op Bank, as the chairman and chief executive of Lloyds have consistently made clear. In the event, Co-op withdrew from the transaction. Since the full extent of the situation at Co-op Bank became clear the chancellor has ordered an independent investigation into the events at the Co-op Bank and the circumstances surrounding them.”