Rate-fixing began on Gordon Brown's watch, says George Osborne

Osborne says there are 'questions to be asked' of Labour as Commons showdown looms

George Osborne ratcheted up political tensions ahead of today's Commons showdown over the Barclays scandal as he accused members of the last Labour government of being "clearly involved" in rate fixing.

In the strongest attempt by a minister to implicate the previous administration over the manipulation of the Libor rate, the Chancellor said there were "questions to be asked" of the "people around Gordon Brown".

His attack – in which he singled out Ed Balls, the Shadow Chancellor – sets the scene for acrimonious parliamentary clashes today over what form the investigation into the future of banking should take.

Labour is pressing for a two-part, judge-led inquiry, while the Coalition wants to hand responsibility to an all-party committee of MPs and peers. The Government looks certain to win the vote – and will then challenge the opposition to respect the will of Parliament and co-operate with the committee.

The temperature surrounding the debate will be raised by Mr Osborne's comments in today's edition of The Spectator. Referring to efforts to keep Libor low during the financial crisis of 2008, he said: "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 said: "They were clearly involved and we just haven't heard the full facts, I don't think, of who knew what when."

Mr Osborne added: "My opposite number 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. That's Ed Balls, by the way."

Last night, Chris Leslie, a shadow Treasury minister, retorted: "This is desperate stuff from George Osborne – lashing out in a frenzied way that demeans the office of the Chancellor of the Exchequer. It's now increasingly clear the isn't interested in getting to the truth, only in playing party politics and throwing around false allegations with no evidence."

The Tories have sought to link senior Labour figures, including Mr Brown, Mr Balls and the former Treasury minister, Baroness Vadera, to claims that "senior Whitehall figures" pressed Barclays to report lower lending rates. Their concerns were allegedly relayed to Barclays by Paul Tucker, the Bank of England's deputy governor.

Bob Diamond, the former Barclays chief executive, told MPs on the Treasury Select Committee yesterday that he did not want to speculate about to whom Mr Tucker had spoken.

The Government has nominated the Conservative MP Andrew Tyrie to head the joint committee into the Libor scandal. But doubts are growing over whether he will accept the nomination, which would leave the Government looking for a replacement. Labour's proposal is for a judicial inquiry into the "culture and professional standards of the banking industry".

Banking inquiry: Who'll be the boss?

If Mr Tyrie drops out as chairman of the planned joint committee, the Government could turn to:

Lord O'Donnell Stood down this year as Cabinet Secretary. He was Permanent Secretary to the Treasury for three years.

Lord MacGregor Was Chief Secretary to the Treasury in the Thatcher government. He worked for a merchant bank before serving as an MP between 1974 and 2001.

Lord Turnbull Was Cabinet Secretary under Tony Blair. Before that he was Treasury Permanent Secretary when Gordon Brown was Chancellor.

Peter Lilley The Tory MP for Hitchin and Harpenden. He served as a Treasury minister for three years, followed by a seven-year spell in the Thatcher and Major Cabinets.

Start your day with The Independent, sign up for daily news emails
Arts and Entertainment
filmPoldark production team claims innocence of viewers' ab frenzy
Life and Style
Google marks the 81st anniversary of the Loch Ness Monster's most famous photograph
techIt's the 81st anniversary of THAT iconic photograph
News
Katie Hopkins makes a living out of courting controversy
people
News
General Election
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
2015 General Election
May2015

Poll of Polls

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

Recruitment Genius: Office Administrator

£14000 - £18000 per annum: Recruitment Genius: An Office Administrator is requ...

Recruitment Genius: Sales Executive - Commercial Vehicles - OTE £40,000

£12000 - £40000 per annum: Recruitment Genius: Due to expansion and growth of ...

Ashdown Group: Senior PHP Developer - Sheffield - £50,000

£40000 - £50000 per annum: Ashdown Group: Senior PHP Developer position with a...

Recruitment Genius: Operations Leader - Plasma Processing

Negotiable: Recruitment Genius: An Operations Leader is required to join a lea...

Day In a Page

Revealed: Why Mohammed Emwazi chose the 'safe option' of fighting for Isis, rather than following his friends to al-Shabaab in Somalia

Why Mohammed Emwazi chose Isis

His friends were betrayed and killed by al-Shabaab
'The solution can never be to impassively watch on while desperate people drown'
An open letter to David Cameron: Building fortress Europe has had deadly results

Open letter to David Cameron

Building the walls of fortress Europe has had deadly results
Tory candidates' tweets not as 'spontaneous' as they seem - you don't say!

You don't say!

Tory candidates' election tweets not as 'spontaneous' as they appear
Mubi: Netflix for people who want to stop just watching trash

So what is Mubi?

Netflix for people who want to stop just watching trash all the time
The impossible job: how to follow Kevin Spacey?

The hardest job in theatre?

How to follow Kevin Spacey
Armenian genocide: To continue to deny the truth of this mass human cruelty is close to a criminal lie

Armenian genocide and the 'good Turks'

To continue to deny the truth of this mass human cruelty is close to a criminal lie
Lou Reed: The truth about the singer's upbringing beyond the biographers' and memoirists' myths

'Lou needed care, but what he got was ECT'

The truth about the singer's upbringing beyond
Migrant boat disaster: This human tragedy has been brewing for four years and EU states can't say they were not warned

This human tragedy has been brewing for years

EU states can't say they were not warned
Women's sportswear: From tackling a marathon to a jog in the park, the right kit can help

Women's sportswear

From tackling a marathon to a jog in the park, the right kit can help
Hillary Clinton's outfits will be as important as her policies in her presidential bid

Clinton's clothes

Like it or not, her outfits will be as important as her policies
NHS struggling to monitor the safety and efficacy of its services outsourced to private providers

Who's monitoring the outsourced NHS services?

A report finds that private firms are not being properly assessed for their quality of care
Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

The Tory MP said he did not want to stand again unless his party's manifesto ruled out a third runway. But he's doing so. Watch this space
How do Greek voters feel about Syriza's backtracking on its anti-austerity pledge?

How do Greeks feel about Syriza?

Five voters from different backgrounds tell us what they expect from Syriza's charismatic leader Alexis Tsipras
From Iraq to Libya and Syria: The wars that come back to haunt us

The wars that come back to haunt us

David Cameron should not escape blame for his role in conflicts that are still raging, argues Patrick Cockburn
Sam Baker and Lauren Laverne: Too busy to surf? Head to The Pool

Too busy to surf? Head to The Pool

A new website is trying to declutter the internet to help busy women. Holly Williams meets the founders