Save Our Bank update
Where now for the campaign?
What now for the Save Our Bank campaign? by Sean Fensom Save Our Bank campaign co-ordinator.
When the Co-op Bank completed its re-capitalisation at the end of 2013, involving a ‘rescue’ by private bond holders, it seemed that the most dangerous point had passed. The bank looked likely to survive, albeit with the wrong owners. It would keep its name and continue to promote itself as an ethical alternative, with a strong focus on consumer and small-business banking. The task for a new management team was to nurse the bank back to health and – after Paul Flowers – keep it out of the headlines.
At Save Our Bank campaign we stopped to reflect on the best way forward. Encouraged by the many thousands signed up for the campaign, we felt that our original instinct was correct: there is still something worth saving. For all its faults, the record of the Co-operative Bank as a campaigning ethical business is quite unique. A longer-term campaign That’s why we decided to work on building a long term campaign.
We have set two priorities. Most immediately, we need to make sure the promised customer consultation on ethics will not be used as an excuse to water the ethical policy down. In the longer term, we are trying to create a mechanism so that ordinary customers can invest in the bank. Our aim is to replace the private ownership bit by bit with a growing, independent, co-operative stake. Those remain our priorities, and I’ll be reporting in this column on the progress we make. The period since the recapitalisation, however, has not been as quiet as the new management would have liked.
Trouble at the Co-op Group
The Co-operative Group’s ‘Have Your Say’ online survey conducted in February attracted lots of responses from the public. But many co-op members were suspicious of apparently leading questions. Confusingly, the survey was unconnected with the promised bank survey on ethical policy. Indeed it was not about the bank at all.
Have Your Say added to a growing unease among activist members worried about the review of Group governance being conducted by Lord Myners. Unease gave way to dismay, however, when the Observer published leaked details of proposed pay for the new executive team at the Group. Including ‘retention’ payments, chief executive Euan Sutherland would have earned £6.6m over two years. Many Save Our Bank supporters contacted us to say how disgusted they were.
Confusingly however, again this story wasn’t about the bank. The Co-operative Group is now struggling to regain control after the resignation of Euan Sutherland over the pay leak, with massive losses and debts that may force it to sell more of the family silver.
Link-up with Unite the Union
Save Our Bank had already been discussing a more formal collaboration with Unite the Union, which represents many bank staff, and which had contacted us to say that they too supported the aims of the campaign. We announced this link-up in March with a joint statement on executive pay. In it we asked the new bank management not to make the same mistake as the group.
We stated: “We know from our supporters that any move by the bank to pay its executives Citystyle bonuses would lead to a haemorrhaging of trust and customers. Frankly the bank can’t afford that.”
Unite added: “Our members are being asked to make sacrifices and many face losing their jobs. The bank must show that any pain will be shared at all levels and that pay is fair.”
More bad news
In March, the Bank announced that it had discovered yet another hole in its finances. A further £400m will be needed from shareholders to cover past losses. It’s far from clear that The Co-operative Group will be able to muster enough cash to prevent its share being “diluted” below 30%. What future for the ethical policy if the private stake in the bank increases?
Our biggest challenge at Save Our Bank is overcoming the view expressed by some people that it’s a lost cause. We don’t think so. The bank needs us more than ever. We think it will survive, but it can’t risk losing more customers by being seen to go soft on ethics. We will be pushing strongly the view that loyal co-op members and customers should be given a chance to invest. Working in co-operation with Unite the Union, this coming period could be a unique opportunity to establish a strong, organised, customer influence. We are excited about the prospects ahead.
For more information visit the Save Our Bank site.