BUSINESS SECRETARY Jonathan Reynolds chose to make a personal keynote appearance at Labour conference with Starling Bank: 10 days later, Starling was fined £28 million for “shockingly lax” failures to screen criminals and sanctioned individuals from accounts.

Reynolds sat for an “In Conversation” event at Labour’s Liverpool conference. These In Conversation events are the most personal (or egotistical) conference events, set up like a two-seater chat show with the minister as the “star.”

The Reynolds event with a Bloomberg correspondent, Lizzy Burden, was organised by key Starmer-supporting organisation Labour Together in front of a limited audience inside its conference marquee.

The event (and refreshments) were paid for by Starling Bank. Reynolds was introduced by Starling chief executive Raman Bhatia and spoke in front of two Starling banners.

Starling Bank, founded in 2014, is a new, techy “challenger” bank. The “challenger” banks were encouraged by the government after the financial crash, with the theory that more “competition” would improve banking, which had been shown to be too reckless and too keen to squeeze customers.

When the government bailed out RBS, one of the conditions was that an RBS fund would be used to fund “challenger” banks: Starling got £100m from this government-mandated fund. While nominally a “challenger” to established banks, Starling also has a big investment from the very established bank Goldman Sachs.

The Financial Conduct Authority (FCA) found this “challenger” bank was not improving banking behaviour. In 2021, the FCA found big problems with Starling’s anti-money laundering and sanctions controls.

However, instead of fixing them, Starling failed to comply with FCA rules. The bank opened accounts for 49,000 high-risk customers it was supposed to avoid. Starling’s “automated screening system” was only checking new customers against a “fraction” of those on the sanctions list — which includes customers linked to Putin’s Russia.

The bank gave an account to “at least one” sanctioned person, as well as giving new accounts to 294 customers it had previously cancelled for “financial crime reasons.”

On October 2 this year, shortly after Reynolds’ meeting with Starling, the FCA imposed the £28m fine, saying Starling’s systems were “shockingly lax” and “left the financial system wide open to criminals and those subject to sanctions.”

Starling had admitted it was under investigation by the FCA over money laundering rules in June, long before the event with Reynolds.

Starling also already faced heavy criticism over Covid “bounce bank loans.” The government guaranteed these £50,000 small business loans, which were made through banks. Starling expanded its business greatly with these government-backed loans. Its latest accounts say 89 per cent of its £832m small business loans are government guaranteed.

However, former Conservative minister Lord Agnew said Starling had acted against “taxpayers’ interests” because it did not properly check for fraud as it built its business on these publicly backed loans, leading to high default rates, which the taxpayer must cover. Starling rejects these charges.

Labour has tried to sound tough on both City sanctions-busting and Covid waste, but it looks like Reynolds found the temptation of getting bankers to pay for his events irresistible.

Hating Palestine pays well for Jenrick

ONE of Tory leadership contender Robert Jenrick’s biggest donors is Idan Ofer, the owner of some of Israel’s biggest companies. He shares Jenrick’s antagonism towards pro-Palestinian protesters.

Jenrick’s biggest single donor for his leadership campaign is Quantum Pacific Corporation, one of billionaire Idan Ofer’s firms. Quantum Pacific gave Jenrick £35,000 for his leadership campaign in August, having given Jenrick another £35,000 for campaigning before the general election, in April.

Jenrick called Ofer a “family friend” in 2020 when he held a ministerial meeting with the businessman. Ofer is a bigger Jenrick donor than he is a Tory donor, having only given the party £10,000 in 2019.

Ofer lives in Britain but has extensive business interests in Israel. He is the son of Sammy Ofer, who was, in his lifetime, Israel’s richest man.

Ofer has built on his father’s businesses, owning much of the Israel Corporation, a formerly state-owned chemical-and-fertiliser conglomerate, Israel’s Zim container shipping line and a major Israeli power generator, along with other global interests.

Jenrick has been firmly against pro-Palestinian protesters. Jenrick condemned Gaza marchers in Britain, claiming we “allowed our streets to be dominated by Islamist extremists.”

Jenrick linked his anti-protest argument with an anti-immigrant argument, claiming last December that there are immigrant communities in Britain who are “leading parallel lives” which he saw on the “pro-Palestinian marches” which Jenrick said included “some people who simply did not share British values.”

Jenrick’s backer, Ofer, has also been angered by pro-Palestinian protests. Last October, Ofer and his wife Batia angrily resigned from the board of Harvard’s Kennedy School of Government. A Harvard student group had issued a statement after Hamas’s October 7 massacres and IDF counter-attacks, saying it held “the Israeli regime entirely responsible for all unfolding violence.”

The Ofers condemned this sentiment, but also seemed to blame Harvard for somehow allowing it, resigning because of “the lack of clear evidence of support from the university’s leadership for the people of Israel following the tragic events of the past week.”

In 2018 Batia Ofer, a major British art collector, attacked Banksy, saying his “posters resemble Nazi propaganda in the 1930s and spread anti-semitism.” The Banksy poster, which Batia Ofer was calling “Nazi propaganda,” showed children playing on a West Bank military watchtower with the slogan “Visit historic Palestine, the Israeli army liked it so much they never left!”

Banksy has long included the plight of the Palestinians among his satirical subjects, but the suggestion that this or any other Banksy work is “Nazi” or “anti-semitic” is a fringe view that is rarely found outside of Israel.

Batia Ofer sees herself as a pro “two-state solution” liberal on Israel, so her anti-Banksy outburst shows that this kind of “liberalism” is becoming less separate from more right-wing thought on Palestine.

I have no doubt that Jenrick genuinely holds his anti-Palestinian protest views, and he doesn’t need backing from Idan Ofer to persuade him. But the donation shows that it is not hard to get significant backing if you take his position.

Follow Solomon on X @SolHughesWriter.