Ed Murphy on Ethical Banking for Peterborough City Council

07:20 Friday 20th July 2012
Peterborough Breakfast Show
BBC Radio Cambridge

PAUL STAINTON: Does Peterborough City Council have a moral obligation when it comes to who it banks with? It’s recently been revealed the Council, like many others, is a customer of Barclays. Now the bank made the headlines of course after allegations of the rate-rigging scandal, bankers’ bonuses, and Bob Diamond doing this and that. One Labour councillor thinks the Council should review its banking arrangements. Ed Murphy is that councillor,and he’s here this morning. .. Why?
ED MURPHY: Well I think if Peterborough City Council wants to show people it’s got a public ethos, then it really needs to be careful about what it does with its money and its banking arrangements. And it’s quite clear, now that there has been a call for criminal investigations into operations at Barclays Bank, who’ve been playing fast and loose with the rules, I think the City Council should look elsewhere, and perhaps go with a mutual bank, a bank that has more in common with ordinary people, and a bank that plays by the rules, and a bank whose chief executive isn’t facing calls for criminal conviction.
PAUL STAINTON: So you’re saying that the Council should put morals above money, even if they’re getting a good deal with this bank? They morally should look to change.
ED MURPHY: Well they’re not actually getting a good deal with this bank anyway. They’d get a better deal with the Nationwide and the Co-op, or with a credit union.
PAUL STAINTON: You’ve checked that out, have you?
ED MURPHY: We’ve had a look into the situation now, and people in credit unions in Peterborough are probably getting a better return than they are in most banks. And they’re not as risky either.
PAUL STAINTON: They’ve tried a few banks, haven’t they? We’ve been to Iceland haven’t we? That didn’t work out very well. We don’t want to keep changing.
ED MURPHY: I think it was £1.4 million they lost playing the money markets in Iceland. No, I think it’s very very important that there is a moral side to this, and that the public authorities do stick with the good people, not with the bad people. We’ve had recent revelations that HSBC have been laundering drugs cartel money. I haven’t seen how that’s been verified yet or not. But we need to be very very careful, and I certainly don’t want to pay my council tax to an organisation that’s giving it to dodgy outfits.
PAUL STAINTON: Have you spoken to the Council? What’s been their response?
ED MURPHY: I put in a question to ask at the last Full Council meeting.
PAUL STAINTON: (LAUGHS) It got a bit carried away that Council meeting, didn’t it?
ED MURPHY: It did indeed. They didn’t get round to the question about the banking arrangements, and the Cabinet Member for Resources has written back to me yesterday evening. Maybe he knew we were going to be talking about this this morning. But anyway, he’s said that they will actually look at building societies. I think I need to enlighten him that some banks are mutuals as well, like the Co-operative. He does point out that it can be a real hassle when you change banks. Well the Tories did move Peterborough City Council a few years ago from the Co-operative to Barclays.
PAUL STAINTON: You get a divvie with the Co-op as well, don’t you?
ED MURPHY: They probably did that on the advice of a friendly consultant.
ED MURPHY: They should get away from the old boy’s network and go for a decent bank.
PAUL STAINTON: Well Peterborough City Council says they “have a duty to obtain best value and protect Council tax payers’ money, as each year hundreds of thousands of transactions and hundreds of millions of pounds pass through their accounts. Banks have to have a very very high level of creditworthiness, and we do keep our choice of bank under continual review, talking into account credit ratings.