Osborne caught in new round of Co-op chaos

Tim Wallace
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AN INFLUENTIAL MP yesterday attacked George Osborne for failing to explain his team’s involvement in the Co-op Bank’s disastrous efforts to buy 632 Lloyds branches.

The chairman of the Treasury Committee wants to know how and when any pressure could have been put on the banks by Osborne through his contact with key figures involved in the process. “Your letter of 3 April provided some general information on these contacts, but lacked the detail requested on the timing of contacts, the individuals involved, and the content of the discussions,” wrote Andrew Tyrie.

The row comes as the Co-op Group’s board is mired in battles between warring factions. Lord Myners, who is reviewing the group’s democratic structure, said earlier this week that he will quit the board next month after writing his report. He has faced fierce criticism from the bosses of the Midcounties Co-op, who also drove out modernising chief executive Euan Sutherland. The recommendations will be voted on at next month’s annual meeting.

Lord Levene, who also wanted to buy the Lloyds branches, called for more details of the problems. “This all goes to show the total lack of oversight by the regulator,” he told City A.M. “We certainly do need to know how much pressure they and Lloyds Bank were under to allow this totally unsuitable bid to continue.”

The Bank is expected to report a record £1.3bn in full-year losses on Friday along with plans to withhold millions of pounds in deferred bonuses of former senior staff.