MPs have debated and voted on the type of inquiry into the Barclays banking scandal.
They have voted for a parliamentary inquiry, defeating Labour's calls for a judge-led inquiry.
Summary:
- The government defeats Labour's calls for a public inquiry. The government defeated the Labour motion by 320 votes to 239 - a majority of 81.
- A heated debate between the Chancellor and Shadow Chancellor on the subject of which ministers knew about the LIBOR fixing
- All parties emphasise the need for immediate action to combat the public's lack of trust in the banking industry
- The wider banking culture, the future of the UK economy and the origins of the controversy were regarded as significant
- Both sides noted the direction of an inquiry, but were divided on the path to take - whether it should be a quicker, cross party, joint parliamentary committee, or a full, forensic, judge-led public inquiry
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The government defeats Labour's calls for a public inquiry. The government defeated the Labour motion by 320 votes to 239 - a majority of 81.
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Motion 2 produced a division, which now has a resulted in the lobby.
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Sir George Young, for the government sums up, proposing a joint, parliamentary inquiry.
He notes the heated debate of the afternoon, but concludes the parliamentary inquiries are a far calmer affair.
Andrew Tyrie is happy to chair, he adds. He wanted the inquiry to be broad, encompassing all parties, and wanted assurances of resources. The Chancellor confirmed this.
He also noted that David Davis said that there were narrow differences between the two options.
He mentions the people who's reputations have been tarnished by this situation, and praises the hard work.
Many contributions have called for urgent action, he says, to prevent future wrong doing.
We have a need for a strong, more transparent banking culture, he says. The House is united on the direction of travel, he says, but not the vehicle and the speed.
He adds that the government support a cross party, joint committee, accountable to parliament, that can be introduced in this parliament.
He combats criticisms, saying that the correct resources will be provided to take the inquiry forward. They are in a good position to do this as part of parliament. He has more confidence in parliament to rise to the challenge of this, and notes that the opposition have not indicated whether they will take part in a parliamentary inquiry.
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The wind-ups of the debate have begun, starting with Angela Eagle for the opposition. She notes the behaviour of the Chancellor, Prime Minister and Shadow Chancellor. She notes since then they have had a unexpectedly calmer debate since the start of the afternoon. This should not, she says, be an opportunity for petty political point-scoring.
Motion from the government for a tightly drawn political parliamentary inquiry, or a two part, one year, forensic, judge-led inquiry.
She says that we must consider:
- whether there are similar cultures across the industry
- whether it threatens the future of prosperity in the UK
- whether the culture took root in the 1980s
She notes the banking industry does not want a full judiciary inquiry, but the people do want this.
She says that they are sick to death of bankers making big bonuses and refusing to support small businesses. They are still angry about the credit crunch, and they want change.
She says that the public want action that will work, and notes the right decision of the Leveson inquiry. She argues that they should conclude the same thing now.
Angela Eagle says that the situation has already been "poisoned" by political partisanship. She says that it has been focused on political interest, not the national interest.
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David Rutley notes how difficult it is to instigate change in the banking system, but it is still very much needed.
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David Rutley recalls his experience in investment banking when asked "David, how greedy are you?" He says it is this sort of attitude that gives bankers a bad review, adding it is difficult to build required trust.
He says that often they are focused on the short term, and forget the customer relations.
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Russell Brown says the majority who work in the banking sector are good hard working people.
He adds that he has had countless emails from people demanding a full public inquiry, and that there is "no faith in this place".
He says that the people of the country will only have faith if the inquiry is done through the judiciary. "As a House... we need to put this right."
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Priti Patel praises the work of the majority of bankers who do a good job in the economy, and says it is wrong to blame them for the actions of the few.
Patel pays tribute to Andrew Tyrie for bringing "sanity" back to the debate.
She says that we must look at the role of parliament in dealing with this in the right and proper way. She says there should be a proper crackdown, but not demonise everyone in the city. She feels that we should regulate where possible, to ensure that this never happens again.
She says that parliamentary-led inquiry is the most appropriate way to proceed as they have been elected to bring experiences to the forefront, to interrogate and to question.
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He concludes that ultimately, people won't have faith in a parliamentary inquiry. There is little point in doing so, he says. We need a full and fair inquiry to tell the people what is going on.
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Mitchell speaks about the nature of American banking "if it's going on in the States, it's going on here."
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Austin Mitchell praises the professional and calm nature of the debate now, and explains that it is clear when looking at the debate from earlier, it would be hard to have a non-partisan inquiry.
He speaks about the importance of deregulation and its disastrous consequences on the banking industry.
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Opposition member intervenes, asking if the market was distorted as a result of the government bailing out the banks.
Mark Reckless agrees that it may have been a concern.
He concludes that you can have a non-partisan committee that can come up with a report and learn lessons for the future.
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Mark Reckless says its not just about under or over-regulation, but the quality of such.
He argues that there are different types of market abuse that must be considered.
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Michael Meacher says it is about the flawed current role of banking rather than the culture of banking. He says they have too much power, too much control of funds.
He says we need to regain control of the money supply, putting the money into the national interest. He concludes up by asking the house to support the opposition's proposal.
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A Conservative member notes that people may be inclined to "press the snooze button" on a full inquiry and lose interest.
Michael Meacher disagrees, saying that Leveson has aroused great public interest. He says yesterday Bob Diamond was not able to be put under proper questioning.
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Michael Meacher questions whether the government are concerned over plans for a full inquiry because they are afraid of what might be uncovered.
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Jenkins will support the government's motion, but emphasises the money and resources that will be needed, should a parliamentary inquiry take place. He recommends the recall of retired clerks as to not remove resources from elsewhere.
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Jenkins adds that it is "dotty" to go into a lengthy judicial inquiry. He says that he doesn't think an inquiry could deal with the behaviour of the front benchers.
He condemns the Shadow Chancellor, as he did not answer whether he would cooperate with a parliamentary inquiry.
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Bernard Jenkin comments that the scandal has been a "mortal blow to the reputation of the city". He also condemns the actions of the front benches during the debate this afternoon, naming it as a "complete car crash".
"There is no solution that will work unless there is consensus," he adds.
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Roger Godsiff strongly supports a judicial inquiry because it goes far beyond LIBOR - it's the "bigger issue that needs to be addressed." He doesn't believe that just changing the people at the top of banks will solve the problem.
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He says that a parliamentary inquiry is up to the job, but only if the procedure is improved, for example, with a legal team and forensics, so new evidence can be assessed properly. We must support an inquiry, whether it be public or parliamentary, he adds. Let us for now "get on with the job... and deliver banks for our citizens that our fit for purpose."
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John Thursco details what he feels the roles of the banks should be on the high street, that there should be great focus on this. There should be a separation between the high street aspect of banks, and of investment aspects.
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John Thursco says that the situation is truly a scandal to the public.
He says that first, we need to know all the facts about LIBOR and scandal. Second, we must know how that has affected the constituents. Third, we need to know whether banking is fit to purpose to deliver what society requires of it.
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He said he will back the call for a judge-led inquiry because the issues are wider than just technical. However, he will not stand in the way of a parliamentary inquiry, if that motion does not pass.
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Stewart Hosie is now speaking. Concerns must be more than just technical changes and some more sanctions on banks. He references Bob Diamond's statement, that no one above desk supervisors knew anything about LIBOR, which dictates a cultural problem.
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He says that "enormous damage" would be done to the economy and the country if this inquiry is not done right. If it is, it could be the most important thing that happens this government.
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David Davis says to look at Coulson and Brooks' evidence at parliamentary inquiries and the problems. This would not be solved with a judge, he says.
He says that a parliamentary committee would be quicker, but would still have trouble completing by Christmas.
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He says that we must consider the powers of the inquiry, saying that those powers are not that different. He says that witnesses were made to appear at parliamentary inquiries in the past.
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Conservative David Davis is now speaking. He says it is not just about LIBOR, and says if it was, a change of procedure and criminal proceedings would solve that issue.
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Clive Efford continues: "This is criminal activity... acting in their own personal interests... you could even call it treason." He calls for a proper public inquiry.
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Clive Efford speaks about the News of the World scandal and that any widespread conduct took place across the press. He then compares the statements of Barclays in the past few days, and addresses the arguments that were made setting up Leveson.
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Clive Efford is speaking now. He says that there is a great deal of background to be investigated in this situation. He says that a parliamentary inquiry may not combat the anger that the public are experiencing in the banks.
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He concludes by saying that if colleagues across the house, including the front benches, want him to, he will do all he can to clear up this scandal.
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He hopes that the outcome on any inquiry will help to repair the damaged trust of the electorate in the banks.
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Andrew Tyrie says that any committee should be Commons-led, and will need full technical support from officials, the Bank of England and legal advice.
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He continues that if there is cooperation between the front benches, then concerns over the possibility of witnesses lying to an inquiry will be able to be sorted out.
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Andrew Tyrie, Conservative Chair of the Treasury Committee is now speaking. He states that any committee of inquiry must have the support of the major parties across the House, and that he feels it does not have at the time.
He also says that any inquiry must be tightly focused.
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He continues that if the chair of the Treasury Committee and members of the Committee were to be taken to complete a joint-parliamentary committee, they would be stretched, doing "two jobs" when there are other important issues that have yet to be concluded.
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John Mann says that we need to see what the FSA has to say about the rest of the banks. The only thing that he says we can be certain of is that there is more to come, it is moving. It cannot be tied to a few months, he says.
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John Mann is next to speak.
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George Osborne concludes by asking why the public should have confidence in their politicians when they cannot hold people to account. He reiterates Cameron's summing up sentence: "let's get on with it."
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Osborne says that the "Brownites" are alive and well in the Labour party.
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He continues that a joint-committee can sit in public, call witnesses, and adds that he will give it all the resources he can to give a joint-committee the powers it needs.
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George Osborne says that he feels that this inquiry on the professional standards of the banking industry would at least take longer than the shortest inquiry he previously mentioned, and that we must include finding a judge, consultation, and a white paper on this issue. He says that he will not get done in this parliament.
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Osborne says that the idea that an inquiry on banking taking place in less time than one investigating an explosion at a plastic factory in Glasgow is "fanciful" and that Labour knows that.
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Secondly, Osborne says that a judge-led inquiry would take a long time. He notes 14 inquiries, 7 still on-going due to criminal proceedings. One set up 7 years ago, not published. Shortest inquiry was 1 year and 5 months, no others taken less than two years.
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He says a judge-led inquiry would be a "mistake."
Osborne argues that judge-led inquiries are used when other methods have been exhausted. He notes that Leveson was set up because of police failures. He says that no such investigation has failed, and now we must act.
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Osborne brings the debate back to the "heart of the debate". He notes the independent commission on banking the Conservatives introduced.
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A member of the opposition asks what the Chancellor has to fear of a judge-led inquiry.
He responds, that it would not allow us to amend the law and deal with things in this parliament. Simply wouldn't allow the decisions to be made in the current parliament.
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The first thing that George Osborne says they want to do is review what needs to be done immediately to regulate LIBOR in the financial markets and report this summer.
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Nigel Dodds says that the public want to see a public, judge-led inquiry.
Osborne says it is entirely possible for a parliamentary inquiry to take place, and notes the Treasury Committee questioning that occurred yesterday.
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George Osborne says that everyone can agree that what happened at Barclays was "completely and utterly unacceptable". This misconduct threatened the stability of the financial system.
He also says that they should both agree that the FSA and the Department of Justice have done a good job on what happened after the events.
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George Osborne: "one of you must know" who was involved and who knew about the LIBOR fixing at Barclays. He calls for them to take responsibility for the "absolute mess... of regulating our banks during their time in government".
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Another intervention by the deputy Speaker who calls for order. She points out that there are people watching the debate who are much angrier than those in the chamber.
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Osborne points out that Ed Balls was the City Minister during the LIBOR scandal. It was reported that ministers in Whitehall were putting the bank under the pressure. Osborne says that Balls has questions to answer - which ministers were involved?
Ed Balls brings it back to the Spectator article, in which Osborne said "they were clearly involved" and referred to Ed Balls directly. He wants Osborne to apologise.
George Osborne says that Ed Balls should apologise for his failure to deal with the problem at the time.
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Next up, Chancellor George Osborne is to speak regarding the motion.
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Ed Balls: "Do the right thing, let's get this sorted, once and for all."
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An intervention by the government asks whether the opposition will not cooperate with a parliamentary inquiry, should it pass through a vote. "Is he going to wreck it?"
Ed Balls says that he will vote for a judge-led inquiry, and encourages the rest of the house to vote for something that will "actually work".
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Ed Balls summarises that judge-led inquiry gives us a better chance into something legally sensitive. Government's proposal is "torpedoed".
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Point made that due to the Bill of Rights, with a parliamentary inquiry witnesses wishing to evade punishment may choose to come to that, rather than be charged in court.
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Ed Balls says that even if they lose the vote, they will continue to press for a public inquiry.
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Ed Balls summarises the case for a judge-led public inquiry with a quote from a Conservative calling for this, saying that it is refusing to give the people what they want. He explains that the government's opposition to their proposals are not founded.
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Dominic Grieve says that Ed Balls has failed to explain answers.
Ed Balls responds that when the subject of the public inquiry overlaps with public charges and trials, only a judge has the legal skills to conduct a wider inquiry without crossing a line.
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Simon Hughes says that the constituents want to sort out this mess, want it now, not in the future, and want the laws to be changed.
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Ed Balls concludes his final point; only a judge-led inquiry will persuade the public that it is independent and non-partisan.
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Ed Balls says that witnesses could refuse to speak at a parliamentary inquiry. "Only a judge can sort this out". He says that it is much harder to the required documents needed for a select committee.
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Ed Balls continues, saying that only a judge-led inquiry can ensure the cross-examination of witnesses, and to stop witnesses avoiding questions.
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Ed Balls argues that this issue requires a "fine legal judgment" which would only come from a judge-led inquiry.
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Intervention from the Dominic Grieve, the attorney general. He argues that the inquiry cannot take place until the criminal proceedings are over.
Ed Balls responds that Leveson is currently taking place alongside criminal proceedings, and that only a judge has the legal skills to conduct that inquiry.
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Ed Balls says that only a judge-led inquiry will have the power to recall witnesses and ensure the production of documents.
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He argues that it needs to be ensured that the inquiry is thorough, in order to try and restore trust in the banks.
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Ed Balls says that of speed, the PM has said we need to "just get on with it." They propose 2 stages of review. First, an inquiry into the LIBOR scandal, and second, into the culture of banking.
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He continues, saying that they need a full review of the banking culture, not just the LIBOR scandal. "Urgent questions that we need to answer."
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Ed Balls continues, saying that the banking industry "above all needs trust" and refusing public calls for a full inquiry will not help the situation.
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Ed Balls explains that Labour have three main objections to a parliamentary inquiry based on scope, speed, and form.
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Ed Balls says that regulation should have been tougher, and attacks George Osborne, calling for his apology on his role in the banking scandal.
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George Osborne is now continuing the debate.
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Ed Balls claims that the allegations made against him in the Spectator yesterday were completely untrue.
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MPs are making calls at each other across the chamber, which calls for the Deputy Speaker to call firmly for order multiple times.
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Ed Balls MP is currently opening the debate, arguing for a full judge-led inquiry into the banking scandal.
He says that all MPs "have a responsibility to get this right".
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