Labour 'involved in Libor scandal,' claims George Osborne

 

Members of Gordon Brown's government were “clearly involved” in the scandal of Barclays' manipulation of its Libor rate, Chancellor of the Exchequer George Osborne has claimed.

In an interview for tomorrow's edition of The Spectator, the Chancellor said that Mr Brown's inner circle - including current shadow chancellor Ed Balls - have "questions to answer" about their role in the false posting of inter-bank lending rates during the bank crisis of 2008.

Tories have been pointing the finger of blame at Labour figures including Mr Balls and former Treasury minister Shriti Vadera over claims that "senior Whitehall figures" pushed for the bank not to report such high rates.

A memo released by Barclays records a phone conversation which chief executive Bob Diamond had in October 2008 with Bank of England deputy governor Paul Tucker, who allegedly relayed Whitehall concerns over why Barclays was always towards the top end of Libor pricings, adding that the bank's rate did not "always" need to appear so high.

Both Mr 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."

And he added: "They were clearly involved and we just haven't heard the full facts, I don't think, of who knew what when."

The Chancellor insisted that the Bank of England itself had been cleared of having instructed Barclays to fiddle its rate.

This charge has been "specifically addressed, not just by our own investigators at the Financial Services Authority but also in the US Department of Justice", said the Chancellor.

"And they are not people who will pull their punches, and they're very clear that the Bank did not issue instructions to Barclays to cut its Libor rate."

In an interview before the publication of Mr Osborne's interview, Mr Balls told the BBC: "At no point did I have any conversations with Mr Tucker at all at any time when I was a Treasury minister and Treasury adviser or, subsequently to that, when I was a Cabinet minister.

"I had no conversation with anybody about the Libor market during any of those periods and at no point, in any of the time that I was a minister or an adviser, were concerns raised about the Libor market from the FSA, the Bank or the Treasury to me.

"The idea that I have an issue on this... is completely false and untrue... and I would be very happy to say that to an inquiry."

Lady Vadera also rejected claims that she authored a Treasury note titled "Reducing Libor" but insisted that it dealt with entirely legitimate government concerns.

"I did not have a conversation with Paul Tucker about Libor," she told BBC Radio 4's The World at One.

"I did not have the conversation that is being alleged and I didn't write that note.

"I commented on the note, in particular to focus the issues on the lending conditions in the real economy for real people."

Asked if anyone in the Labour government had suggested to the Bank of England that the rate should be manipulated, she said: "I can only speak for myself. I can't obviously speak for everybody in government.

"You asked me if Libor was a concern and of course it was a concern. There is nothing wrong with concerning yourself with access to credit. That's the job."

PA

Suggested Topics
News
people'It can last and it's terrifying'
Sport
Alexis Sanchez, Radamel Falcao, Diego Costa and Mario Balotelli
football
Sport
Danny Welbeck's Manchester United future is in doubt
footballGunners confirm signing from Manchester United
News
people Emma Watson addresses celebrity nude photo leak
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksAn unforgettable anthology of contemporary reportage
Sport
footballFeaturing Bart Simpson
News
Katie Hopkins appearing on 'This Morning' after she purposefully put on 4 stone.
peopleKatie Hopkins breaks down in tears over weight gain challenge
News
i100
Arts and Entertainment
Olivia Colman topped the list of the 30 most influential females in broadcasting
tv
News
Kelly Brook
peopleA spokesperson said the support group was 'extremely disappointed'
Life and Style
techIf those brochure kitchens look a little too perfect to be true, well, that’s probably because they are
Sport
Andy Murray celebrates a shot while playing Jo-Wilfried Tsonga
TennisWin sets up blockbuster US Open quarter-final against Djokovic
Arts and Entertainment
Hare’s a riddle: Kit Williams with the treasure linked to Masquerade
booksRiddling trilogy could net you $3m
Arts and Entertainment
Alex Kapranos of Franz Ferdinand performs live
music Pro-independence show to take place four days before vote
News
news Video - hailed as 'most original' since Benedict Cumberbatch's
News
i100
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Infrastructure Lead, (Trading, VCE, Converged, Hyper V)

£600 - £900 per day: Harrington Starr: Infrastructure Lead, (Trading infrastru...

Software Solution Technician - Peterborough - up to £21,000

£20000 - £21000 per annum + Training: Ashdown Group: Graduate Software Solutio...

Supply teachers needed- Worthing!

£100 - £120 per day: Randstad Education Crawley: Supply teachers needed for va...

Year 4 Teacher

Negotiable: Randstad Education Plymouth: Year 4 Primary Teachers needed Rand...

Day In a Page

'I’ll tell you what I would not serve - lamb and potatoes': US ambassador hits out at stodgy British food served at diplomatic dinners

'I’ll tell you what I would not serve - lamb and potatoes'

US ambassador hits out at stodgy British food
Radio Times female powerlist: A 'revolution' in TV gender roles

A 'revolution' in TV gender roles

Inside the Radio Times female powerlist
Endgame: James Frey's literary treasure hunt

James Frey's literary treasure hunt

Riddling trilogy could net you $3m
Fitbit: Because the tingle feels so good

Fitbit: Because the tingle feels so good

What David Sedaris learnt about the world from his fitness tracker
Saudis risk new Muslim division with proposal to move Mohamed’s tomb

Saudis risk new Muslim division with proposal to move Mohamed’s tomb

Second-holiest site in Islam attracts millions of pilgrims each year
Alexander Fury: The designer names to look for at fashion week this season

The big names to look for this fashion week

This week, designers begin to show their spring 2015 collections in New York
Will Self: 'I like Orwell's writing as much as the next talented mediocrity'

'I like Orwell's writing as much as the next talented mediocrity'

Will Self takes aim at Orwell's rules for writing plain English
Meet Afghanistan's middle-class paint-ballers

Meet Afghanistan's middle-class paint-ballers

Toy guns proving a popular diversion in a country flooded with the real thing
Al Pacino wows Venice

Al Pacino wows Venice

Ham among the brilliance as actor premieres two films at festival
Neil Lawson Baker interview: ‘I’ve gained so much from art. It’s only right to give something back’.

Neil Lawson Baker interview

‘I’ve gained so much from art. It’s only right to give something back’.
The other Mugabe who is lining up for the Zimbabwean presidency

The other Mugabe who is lining up for the Zimbabwean presidency

Wife of President Robert Mugabe appears to have her sights set on succeeding her husband
The model of a gadget launch: Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed

The model for a gadget launch

Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed
Alice Roberts: She's done pretty well, for a boffin without a beard

She's done pretty well, for a boffin without a beard

Alice Roberts talks about her new book on evolution - and why her early TV work drew flak from (mostly male) colleagues
Get well soon, Joan Rivers - an inspiration, whether she likes it or not

Get well soon, Joan Rivers

She is awful. But she's also wonderful, not in spite of but because of the fact she's forever saying appalling things, argues Ellen E Jones
Doctor Who Into the Dalek review: A classic sci-fi adventure with all the spectacle of a blockbuster

A fresh take on an old foe

Doctor Who Into the Dalek more than compensated for last week's nonsensical offering