LORDS rejected Labour calls for a judge-led inquiry into the Libor fixing scandal last night, increasing the chance that the government will get its favoured parliamentary investigation into the manipulation of the key inter-bank interest rate.
However David Cameron and George Osborne may not get the exact panel of MPs and peers they hope for, with Treasury select committee (TSC) chairman Andrew Tyrie MP warning he will only lead the inquiry if he has the full backing of the House of Commons.
That looks unlikely to happen, as Labour have forced a debate on the issue tomorrow, with shadow chancellor Ed Balls arguing that “only when you have the forensic judicial and QC process you can really open this up”.
Meanwhile today the committee will grill former Barclays chief executive Bob Diamond on his role in the Libor affair.
It is understood that the committee’s members want to find out how many people at Barclays knew about the false interest rate information being given by Barclays, how many people were involved in the activity, and whether adequate controls have been put in place to stop the manipulation from happening again.
They are also expected to try and cast some light on Diamond’s relationship with the Bank of England’s deputy governor Paul Tucker. Evidence submitted to the TSC includes notes made by Diamond of a conversation with Tucker in late 2008, claiming they discussed irregular Libor readings.
The TSC expects to uncover so much information from Diamond and the evidence already submitted that it has delayed the interrogation of Barclays chairman Marcus Agius and other non-executive directors until next week, rather than tomorrow as initially planned.
“[This] is not a one-off. I expect the Bank of England, the FSA and other banks to be called in the in the next few weeks,” TSC member John Mann said.
“I am quite happy to have former Labour ministers such as Baroness Vadera called in front of the committee. We will hold any government to account.”