Five questions answered on the Co-op Bank’s plans to cut branches

How many stores is the Co-op Bank planning on closing?

Amid an ongoing struggle to bring the Co-op Bank back into profit it has announced it will close some of its stores by the end of next year. We answer five questions on the Co-op’s branch closure plan.

How many stores is the Co-op Bank planning on closing?

The banking group plans to reduce its branch network by 15 per cent by the end of next year, which means closing around 50 branches.

How will the branch closures affect jobs at the bank? 

In regards to this, Euan Sutherland, group chief executive, told BBC Radio 5 live: "We do need to take the overall costs down, unfortunately [that] will hit jobs, but we don't have the details today."

He added: "We have taken a major step forward towards achieving our plan to secure the future of the bank.”

Why is Co-op closing these branches?

The branch closures are part of a £1.5bn recapitalisation plan rescue deal to bring the bank back into profit.

The rescue deal will see shares of around 70 per cent of the bank handed over to creditors, leaving Co-op Group with 30 per cent.

The Co-operative Group will inject £462m into the bank to retain this 30 per cent equity.

However, investors have to vote in this plan in a vote that will take place before the end of the year. Three quarters of investors must support the plan for it to proceed.

The Co-op also plans to list the bank on the London Stock Exchange in 2014.

What else have decision makers at the Co-op Bank said?

Niall Booker, chief executive of the bank, is reported as saying by The Telegraph:

“You can see by what’s happened to other banks,” he said, naming the Royal Bank of Scotland and Lloyds Banking Group, “that’s it going to take time.”

“One thing we must not forget is the core part of our operation is profitable on an ongoing basis; the drag comes from the run-off portfolio,” he continued.

Finally he added that:  “it’s going to take us four to five years to restructure this bank.”

What has bank regulators the Prudential Regulation Authority said about the Co-op Bank’s new recapitalisation plans?

"We welcome the announcement by the firm today setting out the final details of how it will raise the capital required," it said in a statement.

The banking group plans to reduce its branch network by 15 per cent by the end of next year. Photograph: Getty Images.

Heidi Vella is a features writer for Nridigital.com

Photo: Getty
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What are Len McCluskey's chances of re-election at Unite?

The union boss's re-election bid will have far-reaching consequences for the Labour party. 

Len McCluskey has stepped down early as general secretary of Unite, Britain’s largest trade union, in order to stand again for a third term. The contest has potentially far-reaching consequences for the Labour party. McCluskey was elected in 2013 to serve a five-year term; but his supporters hope that the move will allow him to stay in post until the next general election. 

Unite, as well as being Britain’s biggest trade union, is the largest affiliate to the Labour party. That makes it a power player in the party’s internal politics, although their reach and influence is often overstated. It is the GMB, a trade union from the party’s centre, which has dominated parliamentary selections so far in this parliament. “It’s easier for people who’ve met Lisa Johnson [the GMB’s political officer in charge of selection] once in the pub to get selected than it is for Len to get his favourites in,” jokes one trade union official.

That McCluskey is going now and not in 2018 is itself the result of events beyond his control. Assistant general secretary Steve Turner, long spoken of as McCluskey’s chosen successor, is judged not to have  the credibility with Unite’s left flank to win. McCluskey, who is 66, had been trying to overturn a rule barring him from standing again in 2018 due to his age. However, that plan has been mothballed after it became apparent that he does not have the necessary votes among the executive committee.

McCluskey has been dogged by the widespread perception – one that Unite’s press officers strongly deny – that his preference in the 2015 Labour leadership election was Andy Burnham, not Jeremy Corbyn. (In the end, Unite backed Corbyn.)  That matters because in 2013, McCluskey’s strongest opposition came from the left, in the shape of Jerry Hicks, a member of the Respect party who has tried for the top job three times. Since then, McCluskey has been a vocal supporter of Corbyn’s leadership and Unite underwrote much of the Islington MP's second leadership bid. But the perception that he is a fairweather friend of the Corbyn project still lingers in some circles.

However, McCluskey is unlikely to face a well-organised challenge from the left, which would potentially be fatal. 

Who might face him? Hicks is believed to be highly unlikely to mount a fourth bid for the job, while Sharon Graham, the director of organising, is “ambitious but will sit this one out”, say insiders. It is expected that someone from Unite Scotland will likely make a bid. The great hope for Labour’s Corbynsceptics is Gerard Coyne, the regional secretary in the west Midlands. Allies of McCluskey hoped he could be bought off with a parliamentary seat, but he is now all-but-certain to challenge McCluskey for the post.

McCluskey is well-prepared for his bid. Jennie Formby, a close aide and former political director, now serves as regional secretary in the South-East, in preparation for the crucial task of getting the vote out for her boss. He starts as the frontrunner, albeit a vulnerable one. Coyne, for his part, has the advantage of coming from the West Midlands, where the old Labour right – once the backbone of Amicus and its predecessor unions, now merged into Unite – is still strong and relatively well-organised.

But here's the question. Has McCluskey's friendliness with the Corbynite left alienated his members with high-paying industrial jobs, who are not enamoured with the current Labour leader? McCluskey’s allies hope that he has done enough in defending Labour’s policy commitment to Trident to offset his support for Corbyn, who is opposed to the nuclear deterrent. His opponents believe they can successfully link him to the Labour leadership’s opposition to fracking, pharmaceuticals and defence, all of which are industries whose members are represented by Unite.

This election matters within the Labour party because Unite has multiples votes on its ruling national executive committee, and on the conference floor. It is also keen to put forward Unite-backed parliamentary candidates. So whether Len McCluskey serves another term could change the direction of British politics. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.