Parliament to choose between Labour and Tory plans for rate-fixing inquiry

Cameron responds to deadlock over whether judge or politicians should examine scandal

David Cameron will move to break the political deadlock over how the rate-fixing scandal should be investigated by forcing the issue to a vote in the House of Commons tomorrow.

The Prime Minister announced plans on Monday to put senior parliamentarians, rather than a judge, in charge of the inquiry into the manipulation of interest rates by bankers.

But Labour is insisting the issues involved are so serious they have to be scrutinised by an independent inquiry free of politicians – and is refusing to promise to take part in a parliamentary inquiry.

Tensions have also been raised by attacks by Mr Cameron and George Osborne, the Chancellor, on the previous Labour administration for allowing the abuse of interest rates to develop on its watch.

The Government's problems were further heightened by the warning by Andrew Tyrie, the Tory MP chosen to head the inquiry, that he would pull out if his investigation was not supported by all parties. He said: "I am certainly not going to want to run an inquiry that is in any sense partisan or perceived to be partisan."

MPs will be asked to choose tomorrow between the alternatives of a parliamentary investigation, as proposed by the Coalition, or the judge-led inquiry advocated by Labour.

The Government looks certain to win a majority for the former and ministers would then urge MPs of all parties to close ranks and co-operate with the committee investigation.

Downing Street insisted the Government was committed to an all-party inquiry and suggested it could have a wider remit than expected.

A senior Labour source said: "This is a Government in retreat; 48 hours ago we did not have an inquiry and 24 hours ago we did not have a vote. Now David Cameron must go one step further and have an independent, judge-led inquiry."

Labour refused to be drawn on whether it would co-operate with the parliamentary inquiry if it loses tomorrow's vote, insisting it could still harness public opinion to defeat the Government on the issue.

Ed Balls, the shadow Chancellor, insisted he had not given up hope of persuading ministers to accept a judicial inquiry. He said: "We need as politicians to say: 'look we all got this wrong, there needs to be big change'.

"And we can only do that in the open scrutiny of proper hearings with proper disclosure from the politicians and the bankers."

Mr Osborne said the judge-led inquiry favoured by Labour would take two years to set up and run and would not result in legislation until 2016-17.

"It is not what the country wants. A proper parliamentary inquiry with real powers to hold evidence under oath [will] get some answers in the next few months instead of waiting until a decade after the scandal itself. So let's get on with the job," he told BBC Radio 4.

Simon Hughes, the Liberal Democrat deputy leader, said: "A judge-led inquiry into banking should now not be the priority. The failures of the banking system and specifically the attempt to fix interest rates comes after a successful investigation by the regulator.

"For years people like my friend Vince Cable warned about the consequences of the gambling by spivs in the City."

A poll by TNS BMRB, a research agency, found 82 per cent of the public supported tighter regulation of the financial industry even if it resulted in some banks leaving Britain. Less than one-fifth believed the Government should be more careful in its comments because of the contribution banks make to the public finances.

Sport
formula oneLive lap-by-lap coverage of championship decider
News
Boxing promoter Kellie Maloney, formerly known as Frank Maloney, entered the 2014 Celebrity Big Brother house
people
Life and Style
Small winemakers say the restriction makes it hard to sell overseas
food + drink
News
peopleFormer civil rights activist who was jailed for smoking crack cocaine has died aged 78
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksNow available in paperback
Arts and Entertainment
Jerry Hall (Hand out press photograph provided by jackstanley@theambassadors.com)
theatre
Arts and Entertainment
tv
Arts and Entertainment
Carrie Hope Fletcher
booksFirst video bloggers conquered YouTube. Now they want us to buy their books
Arts and Entertainment
Damien Hirst
artCoalition's anti-culture policy and cuts in local authority spending to blame, says academic
Sport
premier leagueMatch report: Arsenal 1 Man United 2
Arts and Entertainment
Kirk Cameron is begging his Facebook fans to give him positive reviews
film
News
i100
Arts and Entertainment
Jason goes on a special mission for the queen
tvReview: Everyone loves a CGI Cyclops and the BBC's Saturday night charmer is getting epic
Sport
Jonny May scores for England
rugby unionEngland 28 Samoa 9: Wing scores twice to help England record their first win in six
Life and Style
fashionThe Christmas jumper is in fashion, but should you wear your religion on your sleeve?
Sport
Tony Bellew (left) and Nathan Cleverly clash at the Echo Arena in Liverpool
boxingLate surge sees Liverpudlian move into world title contention
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

Reach Volunteering: Financial Trustee and Company Secretary

Voluntary Only - Expenses Reimbursed: Reach Volunteering: A trustee (company d...

Recruitment Genius: Senior Project Manager

£45000 - £65000 per annum: Recruitment Genius: This is a fantastic opportunity...

Recruitment Genius: Shopfitter

Negotiable: Recruitment Genius: This is an opportunity to join a successful an...

Recruitment Genius: Digital Sales Account Manager

£25000 - £30000 per annum: Recruitment Genius: A Digital Sales Account Manager...

Day In a Page

Mau Mau uprising: Kenyans still waiting for justice join class action over Britain's role in the emergency

Kenyans still waiting for justice over Mau Mau uprising

Thousands join class action over Britain's role in the emergency
Isis in Iraq: The trauma of the last six months has overwhelmed the remaining Christians in the country

The last Christians in Iraq

After 2,000 years, a community will try anything – including pretending to convert to Islam – to avoid losing everything, says Patrick Cockburn
Black Friday: Helpful discounts for Christmas shoppers, or cynical marketing by desperate retailers?

Helpful discounts for Christmas shoppers, or cynical marketing by desperate retailers?

Britain braced for Black Friday
Bill Cosby's persona goes from America's dad to date-rape drugs

From America's dad to date-rape drugs

Stories of Bill Cosby's alleged sexual assaults may have circulated widely in Hollywood, but they came as a shock to fans, says Rupert Cornwell
Clare Balding: 'Women's sport is kicking off at last'

Clare Balding: 'Women's sport is kicking off at last'

As fans flock to see England women's Wembley debut against Germany, the TV presenter on an exciting 'sea change'
Oh come, all ye multi-faithful: The Christmas jumper is in fashion, but should you wear your religion on your sleeve?

Oh come, all ye multi-faithful

The Christmas jumper is in fashion, but should you wear your religion on your sleeve?
Dr Charles Heatley: The GP off to do battle in the war against Ebola

The GP off to do battle in the war against Ebola

Dr Charles Heatley on joining the NHS volunteers' team bound for Sierra Leone
Flogging vlogging: First video bloggers conquered YouTube. Now they want us to buy their books

Flogging vlogging

First video bloggers conquered YouTube. Now they want us to buy their books
Saturday Night Live vs The Daily Show: US channels wage comedy star wars

Saturday Night Live vs The Daily Show

US channels wage comedy star wars
When is a wine made in Piedmont not a Piemonte wine? When EU rules make Italian vineyards invisible

When is a wine made in Piedmont not a Piemonte wine?

When EU rules make Italian vineyards invisible
Look what's mushrooming now! Meat-free recipes and food scandals help one growing sector

Look what's mushrooming now!

Meat-free recipes and food scandals help one growing sector
Neil Findlay is more a pink shrimp than a red firebrand

More a pink shrimp than a red firebrand

The vilification of the potential Scottish Labour leader Neil Findlay shows how one-note politics is today, says DJ Taylor
Bill Granger recipes: Tenderstem broccoli omelette; Fried eggs with Mexican-style tomato and chilli sauce; Pan-fried cavolo nero with soft-boiled egg

Oeuf quake

Bill Granger's cracking egg recipes
Terry Venables: Wayne Rooney is roaring again and the world knows that England are back

Terry Venables column

Wayne Rooney is roaring again and the world knows that England are back
Michael Calvin: Abject leadership is allowing football’s age-old sores to fester

Abject leadership is allowing football’s age-old sores to fester

Those at the top are allowing the same issues to go unchallenged, says Michael Calvin