Double-whammy: Bob Diamond loses pay-off and faces parliament recall

Bob Diamond gives up on pay-off
Bob Diamond gives up on pay-off
Ian Dunt By

Bob Diamond waved his £20 million pay-off today and faced being recalled to parliament, following allegations he mislead the Treasury committee.

Appearing before the committee this morning, Barclays chairman Marcus Agius said Diamond would walk away with half his annual salary - £675,000.

But his appearance raised serious questions about the reliability of Diamond's testimony, particularly in relation to a letter from Adair Turner, chairman of the FSA.

The damning letter raises "specific areas of concern" about "a pattern of behaviour" at Barclays, saying the bank benefited from "complex structures" and "favourable regulatory interpretations".

Diamond had no memories of that letter at all, but Agius said the letter was discussed for around half an hour by the board.

"Bob Diamond has calculatedly and deliberately misled this parliamentary committee," Agius was told repeatedly.

Several times he replied: "I can't speak to his testimony."

MPs also raised suspicions that Diamond has misled regulators and parliament about stress tests carried out on Barclays.

Speaking about a specific statement by Diamond, chairman Andrew Tyrie said: "It will look to us, and to anyone watching, like another example of a complete lack of candour by the chief executive of Barclays to parliament."

The questions raised by the session make it almost certain Diamond will be recalled to face the committee. If MPs conclude he has misled them, he will find himself in the same position as the three News International employees currently being investigated for having misled the media committee over phone-hacking.#

Agius also revealed it was Sir Mervyn King who forced the bank's hand when it came to sack Diamond.

The Bank of England governor called senior Barclays directors to a meeting and made it clear Diamond did not have the support of the regulator, the chairman revealed.

In a gruelling and hostile interrogation, Agius was asked: "What do you say to people who say you're not very good at your job?"

MPs criticised the chairman for hedging his responses, leading one to comment: "You're also not responding to very straight forward binary questions."

He added: "Under your chairmanship a great British bank has been dragged through the mud. Are you ashamed of that?"

Agius replied: "I regret deeply what happened to Barclays and I said in my resignation letter I'm truly sorry."

Meanwhile, William Hague was forced to defend George Osborne this morning, as even Tory MPs demanded the chancellor should apologise to Ed Balls.

Osborne has been fighting off demands he apologise to his counterpart on the Labour benches since he strongly implied Balls had been linked to the Libor scandal in 2008.

But during an appearance before the Treasury select committee yesterday, deputy Bank of England governor Paul Tucker said there had been no pressure from government for a reduction in Barclay's Libor rating and the only people asking questions were in the Cabinet Office.

"Obviously he made a mistake and I think he should apologise," Andrea Leadsom, a Conservative MP on the committee, told BBC Radio 4's World Tonight.

"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."

Speaking on the BBC's Daily Politics, former Tory chancellor Lord Lamont said Osborne had "overplayed his hand".

"If there is an allegation Ed Balls intervened it doesn't stand up - that is clear," he added.

During a spectacularly bad-tempered parliamentary debate last week, Balls repeatedly demanded Osborne present evidence of his assertion or apologise, but the chancellor refused to do so.

Speaking to the Today programme this morning, Hague tried to defend his Cabinet colleague.

"He was the minister responsible at times in the last government for the regulation of the City, so of course when something like this happens there are questions to answer for the people who were in government at the time," he said.

"The chancellor said there are questions to answer, there remain questions to answer, and I see no reason why he should apologise for that."

Ms Leadsom, who was tipped by some to be lined up for a Cabinet job after a mid-term reshuffle this summer, tried to backtrack on her comments this morning, telling BBC News she was referring to "a very specific point" and arguing Balls still has "a huge amount to answer for about his time in office".

It is not the first time Osborne has come off the worse from a personal intervention. In 2008, he briefed journalists about a private conversation with Peter Mandelson in Corfu, only for the then-business secretary to turn the table on him by reporting his own comments on his Tory colleagues.


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