LABOUR leader Ed Miliband hit out at David Cameron yesterday, saying the Prime Minister had reached a “new low” by using the Co-op Bank’s near collapse and its scandal-hit former chairman’s troubles to score political points.
Mr Miliband accused Mr Cameron of “desperate” smears over Labour’s links to the Rev Paul Flowers.
In a strongly-worded attack on the Tory leadership’s style, Mr Miliband accused the Prime Minister of resorting to a strategy of mud-slinging in an effort to win the 2015 election.
Mr Flowers was arrested last week after being filmed allegedly buying cocaine.
Conservative Party chairman Grant Shapps yesterday insisted Mr Miliband’s response was “ludicrous” and said the scandal raised questions for Labour.
Mr Schapps said there were “conflicting reports” about how much the Labour hierarchy knew about Mr Flowers’ past, including his resignation as a Labour councillor when “adult content” was found in his computer.
Labour insists Mr Miliband and shadow chancellor Ed Balls were unaware of the reasons for Mr Flower’s resignation.
Chancellor George Osborne has announced an independent review of the bank, which will add to an enforcement investigation being considered by the Prudential Regulation Authority and the Financial Conduct Authority (FCA), looking at whether there were adequate controls in place and if there was any wrongdoing by individuals that could lead to fines and censures.
Mr Miliband said Mr Cameron “hit a new low by trying to use the gross errors and misconduct of one man, Paul Flowers, to impugn the integrity of the entire Labour movement”.
He said: “We all want proper answers as to what went on at the Co-operative Bank, and the public deserves better than the desperate attempts by the Tory party to score the cheapest political points.
“Of course, the credibility of their smears was undermined when it emerged that the Chancellor himself was promoting the Co-op’s bid to take over Lloyds Bank branches.”
The Labour leader added: “David Cameron cannot resist a low blow. His main political strategy is now to sling as much mud as possible in the hope that some of it sticks. When he does so, he demeans his office.”
Mr Shapps said there were “conflicting reports” about how much the Labour leadership knew about Mr Flowers’ past.
He said yesterday: “Arguing about what they knew and when, I think there’s a much bigger issue here. You have got Ed Miliband saying, ‘we don’t have to answer any of these questions’, they are somehow all smears. This is ludicrous.”
He continued: “Labour, the party, certainly knew about these very difficult circumstances in which he resigned as a councillor.
“If Ed Miliband didn’t know about that, then why didn’t he know about that?”
The Tories have sought to highlight the close links between Labour and the Co-op, including “soft loans” at preferential rates and a £50,000 donation to Ed Balls’ office from the Co-operative Group.
But Labour has used the row to put pressure on Mr Osborne over his support for the Co-op’s bid for the Lloyds branches.
Meanwhile, the City regulator’s head said the police could be called in to investigate the Co-op Bank if a review found any evidence of criminal activity.
FCA chief executive Martin Wheatley said regulators would only know whether laws had been broken when they had more information.
He added that the previous regulator, the Financial Services Authority, was not required to approve the appointment of Mr Flowers as the bank’s chairman, despite his lack of experience.