Professional Standards in the Banking Industry

Clive Efford Excerpts

Thursday 5th July 2012 Commons Chamber

[Clive Efford (Eltham) (Lab)]

The tone of this debate has been regrettable. It was, in effect, set by the article written in The Spectator by the Chancellor. It is clear that that article was written before Bob Diamond appeared before the Select Committee yesterday, so the evidence the Chancellor uses to back up what he says in it was given after it was published. He cannot produce any proof or evidence backing up the unfortunate accusation he has made.

The Government must understand that the public are very angry about what banks have been getting up to, and they are not going to be satisfied if a Select Committee or a Joint Committee is set up to investigate the matter. That is just not going to get to the bottom of the issues that have made the public extremely angry.

Mr Diamond was deputy chief executive of corporate investment and banking until 2010, and he had been in that role for three years. That is the division of banking that deals with this area of investment. The idea that when he became the chief executive of Barclays he had no understanding of how LIBOR is set, the negotiations between banks and some of the sharp practices employed, and that he would remain completely ignorant of them, is beyond belief. In my opinion, it is clear that he attempted to cover up his knowledge of that when he appeared before the Select Committee yesterday. That just goes to show that there is a great deal of background that needs to be investigated. A Select Committee or Joint Committee would not be able to do that.

When hybrid Committees investigate a planning issue, it takes an enormous amount of effort and time to trawl through all the evidence and come to a balanced judgment. I have some knowledge of the Crossrail hybrid Committee, as that project affected my constituency. The Committee took up an enormous amount of its members’ time and effort. In respect of this banking issue, in-depth investigations of the allegations and counter-allegations are required, and I am not sure whether a Committee of Members of this House, supported by House of Commons staff, will be able to undertake them with sufficient thoroughness to meet the level of public anger and concern.

[Bill Esterson (Sefton Central) (Lab)]

My hon. Friend is right. Does he agree that the partisan nature of the debate demonstrates why a parliamentary inquiry of any kind cannot do this job properly?

[Clive Efford]

My hon. Friend anticipates another part of my speech. The processes in this House to set up Committees of this nature—with Government Whips selecting Committee members—will undermine the independence of any investigation. Unless this Committee is independent and the Government take their grubby little hands off it, its investigations will not satisfy the public at all.

[Mr George Mudie (Leeds East) (Lab)]

Does my hon. Friend agree that a Government majority on such a Committee prevents any chance of equality or objectivity? Does he also agree that before the wind-up speeches, the Chancellor should be asked whether he will agree with the Whips that, as a minimum, there will be equality of representation on the Committee, in order to secure public support?

[Clive Efford]

My hon. Friend has made the point, and in the interests of brevity I will leave it there for the Government to comment on.

The Attorney-General is wrong to say that we cannot set up an inquiry such as the one the Opposition are calling for today while a criminal investigation is taking place. At least two criminal investigations are going on while the Leveson inquiry is taking place.

We have been here before. On 4 September 2010, the News of the World issued the following statement:

“We reject absolutely any suggestion there was a widespread culture of wrongdoing at the News of the World.”

We all know what that meant. The then editor of the News of the World, Colin Myler, told the Press Complaints Commission in August 2009 that

“Our internal inquiries have found no evidence of involvement by News of the World staff other than Clive Goodman in phone-message interception”.

Let us compare that with Mr Diamond’s comment in his letter accepting the invitation to appear before the Treasury Committee:

“This inappropriate conduct was limited to a small number of people relative to the size of Barclays trading operations, and the authorities found no evidence that anyone more senior than the immediate desk supervisors was aware of the requests by traders, at the time that they were made.”

We heard exactly the same sort of defences being made against the Leveson inquiry being set up, suggesting that this was a small matter that needed to be investigated. This is too deep an issue to investigate through a Joint Committee of this House or a Select Committee.

I am instinctively supportive of the idea that we should set up such Committees, but fundamental reform of this House of Commons would be required for us to carry out such an inquiry. Back Benchers would need to be able to conduct business independently of the Executive. We do not have the structures to deal with an issue such as this. We would also have to change the culture of this place. Back Benchers would have to have a duty to the public, rather than to our respective Front Benchers.

[Mark Reckless (Rochester and Strood) (Con)]

Will the hon. Gentleman give way?

--- Later in debate ---

[Clive Efford]

I have given way twice and I will not give way any more because of lack of time.

Fundamental change in this House would be required of the type that simply has not taken place. It is such fundamental reform that we need, rather than the messing about that we have with the House of Lords, which will go absolutely nowhere.

The inquiry that the Opposition are calling for today could establish what we need to do in order to legislate to clean up the setting of the LIBOR rate. That could be dealt with and expedited, but when it comes to the underlying issues and the people involved, we are talking about criminal activity. Let us remember that, at a time when taxpayers’ money was being poured into the banking system to prop it up, these people were acting in their own personal interest and to profit Barclays and other banks, and against the interests of the country. In fact, it could even be called treason. These people belong behind bars, and the inquiry that needs to take place here—[Interruption.] Millionaires’ row over there are giggling at that, but I can tell them that the public out there do not think it is funny. We need to have a proper investigation, independent of this House, that will satisfy the public.