Savage Commons debate appears to scupper Libor inquiry
Government plans for a parliamentary inquiry into the Libor scandal seemed to be in deep trouble today, following a brutal Commons debate.
It seemed implausible that proposed chair Andrew Tyrie would be able to fulfil his role, after he reiterated he would only go forward if it had cross-party support.
That was a laughable prospect today, as the Commons endured one of its most bad tempered and party-political debates in recent memory.
A succession of deputy Speakers struggled to contain MPs, who repeatedly stood up and tried to shout their opponents down during the session.
At one point Labour MP Dave Watts was forced to withdraw a remark after he accused George Osborne of lying.
Several other MPs, including Ed Balls, strongly insinuated the chancellor had failed to tell the truth without being reprimanded.
Tyrie then appeared to directly contradict David Cameron's promises during PMQs that the inquiry would have a broad remit when he insisted he would only chair an inquiry into which changes of Libor regulations could be put in the financial services bill.
Attorney general Dominic Grieve inadvertently made the prospect of a parliamentary inquiry even less likely when he said Labour's preferred option of a public inquiry would be impossible while a criminal investigation was already underway.
Opposition MPs forcefully argued that a politician-led inquiry would be far more susceptible to breaking sub-judice rules than a judge-led inquiry.
The Grieve comment raises serious questions about the government's line of argument, which is that a parliamentary inquiry could report back quickly so that laws could be changed early next year.
Despite the problems, Labour and other parties are unlikely to be able to vote down the motion for a parliamentary inquiry, due to Liberal Democrat support.
Nevertheless the plans are unlikely to go ahead unless the government can replace Tyrie, who has effectively ruled himself out by his contribution to the debate. Even then, Labour could refuse to put MPs forward to the inquiry.
Two divisions are expected after 17:15 BST as opposition parties reject the coalition's proposed parliamentary inquiry into the Libor scandal.
Ministers have allowed a vote on Labour's proposal for a judge-led inquiry, after which they will press ahead with a separate vote on their own preferred probe by MPs and peers.
Labour's motion, which is also backed by parliament's smaller parties, demands an inquiry into "the lessons learnt from the scandal of manipulation of the Libor".
It would be paid for by the banking industry and reports within 12 months – with an interim report on Libor by the end of 2012.
The government's motion merely proposes the establishment of a joint committee looking at "professional standards in the banking industry".
Cameron taunted Ed Miliband in prime minister's questions yesterday over the Labour leader's refusal to acknowledge the legitimacy of a Commons majority.
"If he wants a quick resolution to this he must accept the outcome of the vote in the House of Commons," the prime minister said.
"I'm prepared to do that, why isn't he?"
MPs in both parties appear divided over the merits of both proposals.
