28.11.2013

Co-op 'scandal': Labour is the real target

The manufactured outrage at the plight of Paul Flowers is really an attack on the Labour Party, argues Adam Jensen

You might not think that a banker taking large quantities of drugs and paying for sex would be a news story with legs. But that is the case with Paul Flowers, former non-executive chair of the Cooperative Bank - financial arm of the British mutual which also runs supermarkets and funeral services, and the country’s biggest farmland owner.

The ‘scandal’ was broken on November 16 by - surprise, surprise - the Mail on Sunday, which featured a video on its website of Flowers handing over £300 for a mixed bag of cocaine and crystal meth. This was the day after Flowers - also a Methodist minister - was hauled in front of the treasury select committee to explain a £1.5 billion hole in the bank’s accounts (Flowers had stepped down from his role in May, when it became clear that the Co-op was in dire straits). Of course, most people would need something to take the edge off after one of these ritual humiliations, which have become the bourgeois state’s substitute for any serious examination of the ongoing financial uncertainty.

It quickly became apparent, however, that the (presently suspended) reverend was a regular consumer of a variety of hard and soft drugs, as well as a frequent customer of male prostitutes - or ‘rent boys’, as the rightwing press prefers to label them. Hardly unusual amongst his milieu, one might think - take a stroll around the City of London on a Friday night and witness the cocaine- and Bollinger-induced carnage. But it is pretty easy to identify the real target of this story, which has a nasty undercurrent of homophobia. The Cooperative Party, the group’s political wing, has been affiliated to the Labour Party since 1927 and currently sponsors 32 of its MPs, including, as the Mail helpfully informs us, shadow chancellor Ed Balls. It is also a major donor to Labour, as well as providing easy access to credit through its banking arm and supplying Labour-branded credit cards to party members.

None of this will come as a shock to Weekly Worker readers, or indeed anyone with an interest in British politics. But both the rightwing press and the Tories have been making as much hay as possible out of the story, as if ‘red’ Ed Miliband - who has met Flowers on a few occasions at party jollies and the like - was fully aware of, or endorsed, his behaviour.

And it is hardly the case that Flowers has been pulling Labour strings from behind the scenes; while he was not badly remunerated at £132,000 a year, it is the Co-op group itself which provides the party funding and, unlike the billionaire capitalists who bankroll the Tories, the Co-op’s board is elected: any of the mutuals’ thousands of owner-members are theoretically eligible to sit at the top table. Flowers himself has a degree in theology, and beyond once working as a teller and having partially completed an Institute of Bankers qualification, had no experience of the higher realms of finance (which may account for his telling MPs that the bank’s assets totalled a mere £3 billion - the true figure is £47 billion).

In the upper echelons of the Co-op cliquishness abounds, and Flowers reached the top after years of schmoozing local associations and Labour Party politicians, with which there is inevitably a crossover (Flowers himself was a Labour councillor in Rochdale and Bradford before stepping down to focus on his work at the Co-op). By all accounts he is naturally a ‘people person’ and led a successful church in Bradford, where he attracted unemployed and migrant worshippers. This has given the story more life for the right: clearly people from working class backgrounds, and not educated in the ‘right’ places, cannot be trusted with positions of high financial responsibility.

Of course, it is now evident from his testimony before the treasury select committee that Flowers was a bit of a bumbler when it came to business, to put it mildly. And the way Co-op members rise to the top does appear to take little account of their real aptitude for the job. Clearly, within working class organisations and those of the left, we want people who can actually do the job assigned to them, not people who are merely popular or domineering. But this is a matter of education and training: the implication that the mutual model is doomed to failure on account of its (in this case, relative) openness and democracy is yet another example of an increasingly unabashed rightwing in this country.

As far as Flowers’ sexual and narcotic preferences are concerned, communists could not care less, though there is certainly something sad about a man in his 60s, and not in the best shape, trying to live the lifestyle of a 20-something party animal. The man is probably running from something - the death of his mother a year ago, the stresses of a job he was clearly unsuited for - and clearly needs help, perhaps of the qualified psychological kind (in addition to the counselling he is seeking from the Methodist church).

The cooperative movement as a whole has become thoroughly bureaucratised and, with the partial exception of its marginally left-of-centre political wing, with its almost exclusive focus on promoting mutuals, depoliticised. The relationship with Labour is cosy, and no longer has much connection with the original attempt to serve the needs of workers. But in a sense this is a reflection of the low level of politics in the labour movement generally. Marxists, of course, support the formation of workers’ cooperatives. While not being able to escape the law of value and the dictates of capitalist accumulation, in their mode of operation they can point to the sort of society we want to create, as well as providing a buffer against the hardships constantly imposed on workers. Thanks to capitalism’s continued erosion of national borders and the global division of labour, we can easily imagine these on a European scale - a development, like EU-wide trade unions, which would be a factor in realising a very different world order, of international solidarity and democratic planning.

But in its present form, the UK’s largest mutual is not much of a threat to the rule of capital. Indeed, the Conservative-led government supported the Co-op Bank’s recent abortive takeover bid for over 631 branches of the nationalised Lloyds TSB group, and George Osborne himself has called for mutuals to be encouraged as an alternative to the banking colossi, which, if and when they fall, promise to sink a gaping hole in the country’s GDP. Far from being a cynical attempt to win over left-leaning folk, this is based on a sober assessment of the fact that mutuals usually weather the crises of capitalism better than capitalist banks with their focus on returning quick profits for shareholders.

It seems doubtful that this is currently the case with the Co-op, however, whose current woes stem from pursuing the same course as those other banks; overextending itself in the belief that the good times were here to stay - not to mention the disastrous acquisition of the Britannia Building Society, which merely saddled the Co-op with hundreds of millions in bad loans. In all fairness, the Co-op is another victim of the greatest recession since the 1930s. But the result has been that its banking arm is now two-thirds owned by American hedge funds. Initially, there were statements to the effect that the ‘ethical’ practices of the bank would continue under this new regime, but in the wake of the Flowers revelations this looks very unlikely indeed.

Despite Miliband’s rebuttals, the scandal has also given the Cooperative Bank’s new owners the excuse to drop its historic support for Labour; a third of the group’s £850,000 donations will be cut immediately. A “senior Labour figure” cited in The Guardian reckoned that all funding would soon disappear (November 23). Hardly surprising, given the new majority shareholders. And - as The Guardian points out - coming hot on the heels of the GMB union reducing its funding from £1 million a year to £100,000. As far as the Mail and the Tories are concerned, a good day at the office. Not content with going back to the 19th century in terms of worker’s rights and conditions, they seem intent on destroying even the idea of a workers’ party, leaving us to choose between a liberal capitalist party and an out-and-out reactionary one. Even in The Guardian, what passes for a leftwing newspaper in this country, we have Deborah Orr furiously denouncing Flowers for bringing her beloved Co-op into disrepute, entirely missing the point that one man’s tragedy is being used as cover to grind into the dirt the party she would instinctively support (November 22).

Amidst this shitstorm, what might be surprising is the utter silence of the far left. One can only conclude that the left’s position on Labour - now a thoroughly bourgeois party, we are told by the likes of the Socialist Party in England and Wales, and no longer a ‘bourgeois workers’ party’ in Lenin’s classic, and deliberately contradictory, formulation - prevents it from acknowledging what is going on here. For this scandal, if it proves nothing else, is that the bourgeoisie, even now, does not quite trust the Labour Party, and would rather it ceased to exist, or were at least relegated to a position of impotence.

This would emphatically not be good news for the left. For many, Labour still represents some sort of independent representation of workers. Its reliance on a working class, and left-leaning voter base, is evidenced by Ed Miliband’s quiet dumping of the New Labour project and fractional moves to the left. Despite all the recent attacks by the right, Labour is still the most likely port of call for the millions outraged by austerity, not any of the ‘Labour mark two’ projects being hawked around. Genuine Marxists must engage in order to highlight the contradictions of Labour and build a pole within it - not hold their noses for the sake of ‘revolutionary purity’.