George Osborne told to calm down after furious clash with Ed Balls over rate-rigging scandal

 
9 July 2012
WEST END FINAL

Get our award-winning daily news email featuring exclusive stories, opinion and expert analysis

I would like to be emailed about offers, event and updates from Evening Standard. Read our privacy notice.

George Osborne was urged to tone down his attacks on Labour’s Ed Balls today as the Tory MP in charge of the Barclays rate-rigging inquiry appealed for a “cooling off” period.

The Chancellor was embroiled in a furious war of words in the Commons yesterday after alleging that Labour ex-ministers were implicated in claims that members of the last government put pressure on the bank to lower its borrowing rate submissions.

After a series of fierce exchanges, Mr Osborne conceded that the shadow chancellor was not personally involved in the scandal. The extraordinary bust-up overshadowed David Cameron’s success in winning a vote to set up an inquiry headed by MPs and peers rather than a judge.

Andrew Tyrie, the chairman of the Treasury Select Committee who will head the probe, made clear he was uncomfortable with the partisan tone of the debate.

“It can only get anywhere if there is all-party support for it to go ahead,” he warned. “I think what we need now is a cooling-off period for a few days and then the front benches need to do some work to decide whether and how they want the inquiry to go ahead.”

He vowed not to let it become a “witch-hunt”. Government sources said the members of the committee will not be announced until next week, despite Mr Cameron’s hope it would be up and running within a week. Mr Tyrie said he did not know when it would start sitting.

Labour’s position on the cross-party committee has been strengthened by the row because Mr Tyrie is keen to avoid appearing partisan. Previously it was believed that Mr Osborne wanted to make the actions of the last Labour government a particular focus.

The Times today quoted several anonymous Tory MPs criticising the Chancellor’s tactics. One said he had a “disproportionate obsession” with beating Mr Balls and another said he should spend more time in the Treasury, adding: “When are we going to get a Chancellor who is not part-time?”

In yesterday’s debate, Mr Osborne challenged Mr Balls to “explain what Labour’s involvement was, who were the ministers, who had the conversation, who were the senior figures”. But the shadow chancellor branded his attack “partisan and desperate”.

Comment: George’s fantasy is no substitute for swift reforms

Anthony Hilton

The Romans used to organise circuses where Christians were eaten by lions to keep the populace happy. The modern equivalent organised by the Government to distract attention from the dire state of the economy is to feed City figures to the Treasury Select Committee. This week it was Bob Diamond the just-departed chief executive of Barclays. Next week it will be Paul Tucker, Deputy Governor of the Bank of England, and Barclays chairman Marcus Agius, who is also on his way out.

George Osborne’s behaviour in the Commons yesterday suggested the Tories have a private fantasy that Tucker will crack and confess to being involved in some Libor-rigging plot with Diamond, which they hatched with senior figures in the last Labour government. They will be disappointed. Tucker is obviously innocent — as indeed in this respect at least are Alastair Darling, Ed Balls and even Baroness Vadera. In ignoring the fact that Libor rigging had been going on for years before the bank collapses, the Tories have put self interest above the public interest.

The bigger parliamentary inquiry agreed in the Commons last night is unlikely to tell us much new either. The Vickers report published last year delivered a top-down analysis of what was wrong with the structure of banking, so we have all we need there. Regulators around the world have just spent two years working on the Libor cases. It would be a lot cheaper just to make them publish their findings.

What we need is rapid progress to reform the culture in banking, not to have months of political grandstanding about whose fault it was that we got into this mess.

Create a FREE account to continue reading

eros

Registration is a free and easy way to support our journalism.

Join our community where you can: comment on stories; sign up to newsletters; enter competitions and access content on our app.

Your email address

Must be at least 6 characters, include an upper and lower case character and a number

You must be at least 18 years old to create an account

* Required fields

Already have an account? SIGN IN

By clicking Create Account you confirm that your data has been entered correctly and you have read and agree to our Terms of use , Cookie policy and Privacy policy .

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged in