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Libor scandal: George Osborne urged to apologise to Ed Balls Libor scandal: William Hague rejects Ed Balls apology calls
(about 1 hour later)
Chancellor George Osborne should apologise to Ed Balls for saying he had "questions to answer" over the Libor scandal, a Conservative MP has said. William Hague has backed George Osborne in his row with Ed Balls, saying the shadow chancellor still has "questions to answer" over the Libor scandal.
It comes after Bank of England deputy governor Paul Tucker said no ministers asked him to "lean on" Barclays over its inter-bank lending rates in 2008. A Tory MP has called on Mr Osborne to apologise to Mr Balls for suggesting he was implicated in rate fixing.
Andrea Leadsom, who is on the Treasury Select Committee, said Mr Osborne "made a mistake" and "he should apologise". Andrea Leadsom, a member of the Treasury committee, said the chancellor had "made a mistake" with his claim.
A Treasury spokesman dismissed calls to apologise to the shadow chancellor. But Mr Hague said: "There remains questions to answer and I see no reason why he should apologise."
He said Mr Balls had questions to answer as the man who designed the system of regulation that failed and he should account for his record. The foreign secretary told BBC Radio 4's Today programme there were "questions to answer for ministers in the previous government" which would be investigated by a Parliamentary inquiry.
Labour's Chris Leslie, shadow financial secretary to the Treasury, has called on Mr Osborne to "publicly withdraw these false allegations and apologise". And that would include the role played by Mr Balls, who was Labour's City minister between 2006 and 2007, he added.
'Valid discussion' 'Personal accusations'
Mr Osborne made the allegation last week in an interview last week with The Spectator magazine, in which he said "people around Gordon Brown" while he was prime minister had "questions to answer" over allegations from Barclays that "senior Whitehall figures" had put pressure on them to post artificially low Libor rates.
"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," he added.
He was confronted by Mr Balls during a Commons debate, who called on him to withdraw the "false, personal accusations", describing them as "cheap, partisan and desperate".
Mr Osborne stood his ground and urged his Labour shadow to "explain what Labour's involvement was, who were the ministers, who had the conversation, who were the senior figures".
But senior Tory MP Andrea Leadsom has now added her voice to Labour calls for Mr Osborne to correct the record.
And when asked on BBC Radio 4's World Tonight programme whether Mr Osborne should apologise, Mrs Leadsom said: "Yes I do. I mean I think obviously he made a mistake and I think he should apologise."And when asked on BBC Radio 4's World Tonight programme whether Mr Osborne should apologise, Mrs Leadsom said: "Yes I do. I mean I think obviously he made a mistake and I think he should apologise."
'Decisive action'
The Conservative MP went on: "I think it was a very valid discussion at the time about who knew what and it has now been completely squashed by Paul Tucker."The Conservative MP went on: "I think it was a very valid discussion at the time about who knew what and it has now been completely squashed by Paul Tucker."
She said "at a personal level", the chancellor "probably would want to apologise", although she added that was a matter for Mr Osborne.She said "at a personal level", the chancellor "probably would want to apologise", although she added that was a matter for Mr Osborne.
BBC political correspondent Gary O'Donoghue said there was a sense from some Tory MPs he had spoken to that the chancellor "may have messed up on this" because the attack went wrong and "he didn't have the evidence to back up what he was saying". On Monday, Bank of England deputy governor Paul Tucker was asked by the Treasury Select Committee whether any government official or minister in 2008 had asked him "to lean on" Barclays or any other bank to lower their Libor submissions.
The row began last week when Mr Osborne told the Spectator that "people around Gordon Brown" while he was prime minister had "questions to answer" over allegations from Barclays that "senior Whitehall figures" had put pressure on them to post artificially low Libor rates.
"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," he added.
And during a Commons debate, Mr Osborne urged his shadow to "explain what Labour's involvement was, who were the ministers, who had the conversation, who were the senior figures".
But Mr Balls called on the chancellor to withdraw the "false, personal accusations", describing them as "cheap, partisan and desperate".
'Wrong impression'
On Monday, Mr Tucker was asked by the Treasury Select Committee whether any government official or minister in 2008 had asked him "to lean on" Barclays or any other bank to lower their Libor submissions.
Specifically, he was asked about Shriti Vadera, an adviser to then-Prime Minister Gordon Brown, shadow chancellor Ed Balls, who was then a Labour minister, and the then Downing Street chief of staff Sir Jeremy Heywood.Specifically, he was asked about Shriti Vadera, an adviser to then-Prime Minister Gordon Brown, shadow chancellor Ed Balls, who was then a Labour minister, and the then Downing Street chief of staff Sir Jeremy Heywood.
Rejecting claims that any of them had asked him to pressure Barclays to lower its Libor submissions, his response each time was "absolutely not".Rejecting claims that any of them had asked him to pressure Barclays to lower its Libor submissions, his response each time was "absolutely not".
He also told the MPs he did not instruct Barclays to lower its Libor submissions in 2008 and that ex-Barclays boss Bob Diamond's account of a conversation between them gave "the wrong impression".He also told the MPs he did not instruct Barclays to lower its Libor submissions in 2008 and that ex-Barclays boss Bob Diamond's account of a conversation between them gave "the wrong impression".
Mr Tucker said that Mr Diamond's resignation from Barclays last week was the right decision because "absolutely decisive action was needed to start a new chapter".Mr Tucker said that Mr Diamond's resignation from Barclays last week was the right decision because "absolutely decisive action was needed to start a new chapter".
Barclays chairman Marcus Agius is set to give evidence to the Treasury Select Committee on Tuesday.Barclays chairman Marcus Agius is set to give evidence to the Treasury Select Committee on Tuesday.
He is expected to be asked about fines issued against the bank and Mr Diamond's resignation.He is expected to be asked about fines issued against the bank and Mr Diamond's resignation.
Emails released on Monday revealed that the BoE had almost daily contact with Barclays over inter-bank lending at the end of October 2008.Emails released on Monday revealed that the BoE had almost daily contact with Barclays over inter-bank lending at the end of October 2008.
At this time, during the height of the financial crisis, Barclays was trying to manipulate Libor rates by submitting lower borrowing rates.At this time, during the height of the financial crisis, Barclays was trying to manipulate Libor rates by submitting lower borrowing rates.
These rates, submitted by a number of banks, go into calculating the daily Libor, or London inter-bank lending rate, which is the basis for millions of daily financial transactions.These rates, submitted by a number of banks, go into calculating the daily Libor, or London inter-bank lending rate, which is the basis for millions of daily financial transactions.