Row grows as chancellor accuses Balls of Libor role

Tim Wallace
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Senior Labour politicians fiercely denied any involvement in the Libor fixing scandal yesterday, after George Osborne said those around Gordon Brown “were clearly involved” in rate rigging, and former Barclays boss Bob Diamond said the bank was in regular contact with ministers.

Meanwhile Labour MPs said Bob Diamond’s failure to answer all the Treasury select committee’s (TSC) questions showed the need for a judge-led inquiry into the scandal, while Tories insisted time is still of the essence – a debate which will be fully played out in today when MPs vote on the type of inquiry to hold.

Osborne yesterday said he had his suspicions that Ed Balls knows more than he is letting on about why Barclays entered falsely low interest rates in its Libor submissions.

“My opposite number [Ed Balls], who was the City Minister for part of this period and Gordon Brown’s right hand man for all of it so he has questions to answer as well,” he told the Spectator magazine.

But shadow Treasury minister Chris Leslie hit back, saying the chancellor was making “false allegations with no evidence.”

“This is desperate stuff from George Osborne – lashing out in a frenzied way that demeans the office of the Chancellor of the Exchequer,” he said.

“It’s now increasingly clear that George Osborne isn’t interested in getting to the truth, only in playing party politics.”

In parliament David Cameron accused the opposition of trying to avoid facing up to their own actions when in government.

However, shadow chancellor Ed Balls argued he was not in the Treasury in the time period in question, while former City minister Lord Myners claimed to know nothing of any discussions about Libor manipulation.

Meanwhile Labour MPs said the best way to fully investigate the Libor scandal and the culture of the banking industry was with a judge-led inquiry.

“To really get into the detail, the nitty gritty, you need all day to interview someone – which is performed better by a judge than in the setting of a parliamentary committee,” TSC member John Mann told City A.M.

But the Prime Minister called for a “swift and decisive” investigation in parliament.