Lord Myners
Main Page: Lord Myners (Crossbench - Life peer)Department Debates - View all Lord Myners's debates with the HM Treasury
(12 years, 1 month ago)
Lords ChamberI am grateful to my noble friend for confirming that a Joint Committee is the way to take this forward. We have already increased the tax on the banks by putting a special levy on them so that the big banks effectively do not take any advantage of the lowering of corporation tax, which other parts of industry have already benefited from. This tax on the banks is enduring and will raise far more than the one-off tax that the previous Government brought in. So we have already done that.
My Lords, I broadly welcome the Chancellor of the Exchequer’s Statement, and in particular the appointment of a Joint Committee, the report to be produced by Mr Martin Wheatley and the timetable to which both those reports are working.
I would like to return to the point I made to your Lordships’ House earlier about the BBA. It is increasingly clear that the British Bankers’ Association was very aware of what was going on—the collusion that was leading to fraud. The chairman of the BBA at that time is now a Minister in Her Majesty’s Government. Will the Minister assure us that the work being done by Mr Wheatley will look at the BBA’s role? It appears that there is a prima facie case that the BBA colluded in and supported a corrupt act. I am grateful that the Minister and the Chancellor have confirmed that there is no lacuna in legislation that prohibits criminal prosecution of the quite monstrous things that appear to have occurred here.
I have two further short questions. There was no suggestion by the Minister that any action would take place to lead to an inquiry and the payment of compensation to those who lost out as a result of this systemic collusion and manipulation of an important rate. That includes taxpayers, because there were a number of arrangements between the central bank, the Treasury and banks that were based on the LIBOR rate. Will the Minister confirm that there will be an appropriate investigation about whether the taxpayer was disadvantaged? Finally, will the Minister explain why the FSA’s fine was so small compared with the fines imposed by the American regulators?
My Lords, on the first point, presumably if there is evidence that the BBA colluded in criminal activity, that will be well within the scope of the work that the SFO might do. As for the wider question about the role of the BBA, the review of LIBOR will look comprehensively at governance, which comes very much back to the BBA role and what, if any, that should be in the future framework.
On the question of whether there should be compensation, our difficulty at the moment is that we do not know whether LIBOR was successfully manipulated as opposed to there being an attempt to manipulate it. From the evidence that has already been made public, we know—
The American regulators were very clear that LIBOR was manipulated. They were unequivocal in that statement. They understand the subtleties of the issue.
My Lords, if the noble Lord will hear me out, we know that there was attempted manipulation from the evidence that has already been made public. I do not know on what basis the American authorities have come to that conclusion, and it may just be semantics, but the authorities are currently investigating whether LIBOR was actually manipulated.
It is also worth bearing in mind that, in the case of Barclays, it was the dollar LIBOR rate and not the sterling LIBOR rate that was the subject of the attempted manipulation that has come out. I completely agree with the noble Lord, Lord Myners, that these investigations need to carry on, but we cannot come to any conclusion about the answer.
Lastly, I answered a question about the fine last week, but I will repeat it in summary. This is the largest fine that the FSA has ever handed down, which indicates the seriousness of this matter within a UK context—the US has a completely different approach to the way it imposes penalties. The most important and relevant point is that this is the largest ever fine in the UK handed down by the FSA.