Tories say Labour’s bank swap puts unions in charge

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SENIOR CONSERVATIVES have warned that a move by Labour to end a long-standing relationship with the troubled Cooperative Bank would hand trade unionists even more control over the Tories’ political rivals.

Labour’s general secretary Iain McNicol is understood to want to move a £1.2m loan to the trade union-controlled Unity Trust Bank. Labour’s current account facilities are also expected to be shifted.

Conservative Party chairman Grant Shapps said the move “would hand the trade unions even more control over Ed Miliband and the Labour Party” as the Unity Trust Bank was already 75 per cent union-owned.

“The unions already pick the candidates, buy the policies and choose the leader. Now Ed Miliband wants them to hold the purse strings as well,” he said.

“If Ed Miliband is too weak to stand up to the trade union barons then he is too weak to stand up for hardworking people. This would put Britain’s economic security at risk.”

The move by Labour comes after a tumultuous period for the bank, which has seen big losses and the resignation of its chairman Paul Flowers, a former Bradford councillor and Methodist minister who is now facing drug possession charges.

It would effectively draw a line under a financial relationship going back nearly a century.

The Cooperative Movement and Labour joined as parties in the 1920s and the link-up with the banking arm is believed to have started then. Labour stressed the change of tack was for “commercial reasons”, but the controversy over the past year is thought to have strained relations.

The BBC reported that the bank – now 70 per cent-owned by American investors – was also keen to become “apolitical”.

A party spokesman said: “The Labour Party is constantly reviewing its financial arrangements. All decisions are taken for commercial reasons.”