The Labour Party likes to say the wealthy should not exert undue influence on our politics. Entrepreneur and bank CEO Anthony Watson clearly can’t have had any because Labour cheerfully pocketed £340K from him. As his financial empire is engulfed by crisis, questions are now being asked about what Labour really knew about Watson and the extent to which his donations were used to promote his own curious political views. 

The speculation has been triggered by events at Watson’s brainchild, Bank of London. In 2021 regulators awarded him a license to create only the second new clearing bank in the UK in 250 years. Bank of London was launched with considerable hype and claims it would revolutionise banking. It wasn’t long before doubts emerged. Its PR claimed the bank was valued at $1.1Bn but a year later its accounts reported a £48k loss and The Times revealed it had less than £100 in cash. 

Its most recent accounts reported a pre-tax loss of £41.8m. Then this month, without warning, Watson announced his resignation as CEO. Two days later HMRC moved to have the Bank’s holding company wound up for failing to pay tax. Bank of London claims the two events are unrelated and has announced a lifeline of £48M in new financing.

There was nothing wrong with Bank of London’s ambition. Two years before it was founded another new clearing bank — ClearBank — had been awarded a license. The potential of technology in general and AI in particular to transform the way we access and use money has only begun to be tapped. 

A problem with Bank of London was that Watson always struck observers as an unlikely bank CEO. For one thing he revelled in showing off his lavish lifestyle on social media. He came to prominence just as the EDI obsession reached its peak. With global corporations competing to out-woke each other it didn’t seem strange that Watson never lost an opportunity to remind the world he was gay. But do we really need to know all about a bank CEO’s sexuality?

Watson seemed to think so. In the last three months alone, there were two two stories in City Am in which he waxed lyrical about how unique he was in being a gay CEO. There were others about coming out and about how great it was to be gay. Enough, already. Watson was also behind the Bank of London’s lavish sponsorship of the LGBT+ Rainbow Awards held at the Natural History Museum (the hiring of which cost an estimated £80K alone). As losses mounted, this endless discussion of LGBT+ issues and his own sexuality didn’t exactly suggest laser focus on the day job. 

Watson’s activism has begun to feel not so much pioneering as passé

Perhaps the mood has changed too. Major firms like Ford are publicly retreating from the EDI obsession and there is a growing backlash in the US in particular against nonsense like compulsory pronouns on emails. Watson’s activism has begun to feel not so much pioneering as passé. Nor did it help that his tone on sites like Twitter/X was often snarky bordering on hysterical. He noisily denounced anyone who refused to kowtow to the demands of the trans lobby; in one public statement bemoaning “toxic attacks on our trans siblings”.

Whether all of these distractions were part of the problem at Bank of London has not been established — but they can’t have helped. The problem for Labour may be more serious. In the wake of other accusations of cronyism, it is worth knowing whose financial heft helped Labour advance the political positions it did.

One of the biggest recipients of Watson’s donations was, for example, Dawn Butler the Shadow Equalities Minister — who in 2020 surprised the public by claiming that babies were born without a sex. In 2018, she appointed Watson head of her committee of equalities advisors. Two months later he spent £14000 to take her on an all-expenses paid trip to Los Angeles to attend the Annual Awards of GLAAD, a giant American LGBT organisation which relentlessly attacks JK Rowling. GLAAD even has a regularly updated page on its website that “monitors” her alleged transphobia. Watson is on the organisation’s Board.

Watson liked to use his role as the Labour Party’s “Equalities Tsar” to criticise feminists and anyone else who defended the overwhelming importance of biological sex, such as the dissident gay group LGB Alliance in which I am involved. He described them as a hate group.

The link between Labour and Watson extended beyond LGBT+ issues. Eyebrows were raised when Watson appointed Peter Mandelson as Bank of London’s Deputy Chairman, despite the fact he had resigned from Labour governments twice as the result of ethical scandals. Headlines continued to follow Mandelson after his term as an EU Commissioner. There was one notable trip in 2012 to Siberia to hang out with one of Russia’s richest men Oleg Deripaska which the Mail said included a visit to a sauna together and beatings with birch branches. Each to his own. Suitably energised, Mandelson accompanied the oligarch on a tour of aluminium smelters. In 2018 Deripaska was sanctioned by the US government and accused of laundering money for Putin. As well as threatening the lives of corporate rivals and ordering the murder of a businessman. 

Watson defended Mandelson’s appointment and that of another Labour peer as a corrective to the right wing bias in banking. But is there really an appetite for a left wing bank? If there was then the old Cooperative Bank would hardly be the shell it is now. Watson’s stance on left-wing directors only served to remind critics that in 2016 he had been appointed by Jeremy Corbyn as his Business Tsar and claimed “Corbyn’s Labour is the perfect partner for Business”. 

Labour should come clean about what, if anything, was the consequence of Watson’s donations — and whether he continued to give donations while his holding company allegedly failed to pay its tax. As for Bank of London, if it can sort out its problems it could well succeed. One hopeful sign is that the venture capitalists who have pumped new funding into the firm, Mangrove Capital Partners, appear decidedly disinterested in all things woke. On Twitter/X their CEO Mark Tluszcz has recently applauded Hungary’s stricter immigration controls, quoted Thomas Sowell’s criticism of America’s woeful education system, and denounced Labour’s sister Socialist party in Spain. Who knows — with a genuine capitalist running this bank it might even make money.