Darling must answer to banking inquiry

The SNP offered a cautious welcome to the announcement of a joint parliamentary inquiry into standards in banking by Chancellor George Osborne but said a full and open public inquiry would guarantee the accountability of Labour Ministers in office at the time of the LIBOR fixing scandal.

The SNP last week called for the Treasury Select Committee to be allowed to conduct an immediate investigation without ruling out the benefits of a broader public inquiry. It also published yesterday ten questions relating to Labour’s period in office which Labour Leader Ed Miliband could compel his colleagues to answer in the interests of a transparent and open investigation into the banking industry and its oversight.

Meanwhile, an opinion poll released yesterday by the Sunday Times/You Gov demonstrated the confidence of the Scottish people in Alistair Darling’s tenure as Chancellor. It found that Scots consider Darling’s competence in office, leading up to and during the financial crisis, to be as bad or worse than Tory ministers who were in charge around the dark period of British economic history known as “Black Wednesday” in 1992.

The SNP Treasury Spokesperson Stewart Hosie MP, a member of the Treasury Select Committee, said:

“The FSA report into Barclays highlights a staggering litany of prolonged manipulation of the LIBOR. A parliamentary inquiry is a welcome step, but a full, open independent inquiry will help all of us understand how banks, regulators and politicians failed to notice and act at the time this was going on.

“We must have full transparency from not only the banks but also the Labour members who were Ministers at the time, and the financial regulators that reported to them.

“Alistair Darling was Chancellor, Gordon Brown was Chancellor and Prime Minister and Ed Balls was Economic Secretary to the Treasury when LIBOR fixing was going on. Were Darling and his colleagues asleep at the wheel or did they know what was going on yet fail to take any action?

“Americans and British regulators received complaints about LIBOR manipulation as early as 2007. Why was Parliament, the markets and the public not informed of the allegations by Alistair Darling? Given the importance of transparency and openness around liquidity for UK banks particularly during the credit crisis, it is unforgivable that these allegations were not reported to Parliament nearer the time.

“The consequences of LIBOR fixing at any point are almost endless but of particular significance during a financial crisis. Confidence in the banking system is based on trust.

“For too long Labour has been trying to pretend that the economic crisis had nothing to do with them – but now we know that Mr Darling, Mr Brown, Mr Balls were in charge during the worst period of regulation in the history of the UK financial system. The buck stops with Ministers and they must account for their actions in public.”