MPs to vote on banking inquiry
MPs are to vote to decide whether Parliament or a judge should stage an investigation into the banking scandal as George Osborne accused Labour of being "clearly involved" in it.
The Chancellor claims members of former prime minister Gordon Brown's administration have questions to answer about "who knew what and when" on lending rate rigging.
Ex-Barclays chief executive Bob Diamond has admitted feeling "physically ill" when he discovered traders had fiddled the key Libor rate but denied he was "personally culpable" for their actions. He blamed a "series of unfortunate events" for his departure from the bank as he fended off calls to give up his multimillion-pound bonuses.
Mr Diamond told MPs that Bank of England deputy governor Paul Tucker had relayed concerns in Whitehall about Barclays' high Libor rates to him in a phone call in October 2008.
He believed Mr Tucker was trying to warn him that "there are ministers in Whitehall who are hearing that Barclays is always high, that could lead to the impression that you are not funding yourself". But he told the Treasury select committee: "My recollection is Paul did not mention who he was referring to or I would have put it in the note."
Pressed by Tory committee member Michael Fallon on whether Mr Tucker could have meant the then Cabinet Office minister Baroness Shriti Vadera, Mr Diamond said he would only be "speculating". Both Shadow chancellor Ed Balls and Lady Vadera have denied speaking to Mr Tucker about Libor.
But Mr Osborne told The Spectator: "As for the role of the Labour government and the people around Gordon Brown - well I think there are questions to be asked of them." He added: "They were clearly involved and we just haven't heard the full facts, I don't think, of who knew what when."
Labour and Westminster's minority parties will make a final push for an independent "forensic" judicial public inquiry, claiming it is the only way to restore public faith in the disgraced industry. But the coalition insists a parliamentary investigation is the best way to get speedy recommendations to be included in a banking reform Bill early next year.
Labour leader Ed Miliband insists the two-part judicial inquiry he is pushing for would report back on Libor rate-fixing by the end of the year before going on to look at wider issues. The whole thing would be wrapped up by summer 2013 and the cost would be met by the banking industry, Labour's motion states.
It has been backed by the DUP, SNP, SDLP, Plaid Cymru, Green Party and Independent MP Sylvia Hermon. But the motion is expected to be defeated by the coalition and Mr Miliband is keeping his cards close to his chest over whether he would then oppose the Government's move for a parliamentary inquiry.