Home Business NewsFinance News Osborne and Balls lock horns over rate-rigging scandal vote

Osborne and Balls lock horns over rate-rigging scandal vote

by LLB Editor
5th Jul 12 3:58 pm

George Osborne and Ed Balls have clashed over the Libor rate-rigging scandal ahead of a vote on whether a judge-led independent inquiry will take place.

The chancellor accused his opposite number of being involved in the rate-rigging row, but Balls denied involvement and said Osborne’s “cheap and partisan” conduct “demeans the office he holds”.

Labour has called for a full, judge-led independent inquiry into the culture of banking, while the Conservatives have expressed a preference for a parliamentary investigation.

Deputy Commons speaker Nigel Evans battled to maintain order as Osborne and Balls clashed in heated opening exchanges. Balls claimed the chancellor’s actions had demonstrated the requirement for an independent investigation.

When asked by James Morris, the Tory MP for Halesowen and Rowley Regis, about his actions while in government, Balls said: “At no point, at any time when I was an adviser or a minister in the City, was any point put to me by the Financial Services Authority, the Treasury, the Bank of England or anyone in this House that there was any reason to doubt the integrity of the Libor market, which only came to light subsequently and has now been properly investigated.”

Tory MP for Stratford-on-Avon Nadhim Zahawi asked Balls: “Can you confirm that in your time in office, no other minister either in No 10 or the Treasury spoke to the Bank of England on Libor that you know about?”

While Balls did not provide a direct answer, he said: “The reason why we advocate an open, public inquiry, judge-led, is to get precisely to the bottom of all these things.”

Balls had taken exception to an interview with Osborne in The Spectator, where the chancellor claimed former prime minister Gordon Brown’s inner circle had “questions to answer” on apparently putting Barclays under pressure to register lower Libor rates during the economic downturn.

Bob Diamond, Barclays’ former chief executive, told the Treasury Select Committee he was unable to provide any information on the identity of the “senior Whitehall figures” who advised the rates were too high.

Balls asked Osborne to take back the “false, personal accusations” which were said “purely in the hope of political advantage”.

However, the chancellor said a report commissioned by UBS on Libor was seen by Lady Vadera, a former Labour minister, and Diamond had said the Whitehall figures involved were “ministers”.

Osborne asked Balls to “explain what Labour’s involvement was, who were the ministers, who had the conversation, who were the senior figures” and said he needed to “answer for his time in office”.

 

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