Professional Standards in the Banking Industry

Sarah Newton Excerpts

Thursday 5th July 2012 Commons Chamber

[Ms Eagle]

The public demand action that will be effective, and that is calm and considered.

A year ago, this House had to decide the best way to get to the bottom of practices in the media. The House made the right choice then. It decided that a judicial inquiry was the best way to get to the truth, to get to the bottom of what had gone on, and to produce recommendations on how culture and practices could be improved. In that instance, the Prime Minister said that the best way of getting to the truth was

“a judge-led inquiry with Ministers answering questions under oath where all the documents have to be revealed and the whole thing is pursued properly by a team of barristers who are expert at finding out the facts”.—[Official Report, 30 April 2012; Vol. 543, c. 1251.]

I am frankly baffled about why the Prime Minister thinks that the best way to get to the bottom of what went on at News International is a judicial inquiry, but the best way to get at what has happened in banking is anything but. It is the wrong choice. Why is the Prime Minister doing what the banking industry, rather than the country, wants him to do?

Let us consider the two options before us today: a parliamentary inquiry or a judge-led inquiry. The Inquiries Act 2005 requires the panel to be independent. This is especially important when there are allegations of the involvement of Whitehall and the Bank of England. The Act ensures transparency and guarantees due legal process. Its enforcement powers are clear and set out in statute, and it can draw upon expert skills and resources to complete its task.

In its 2004-05 report, the Public Administration Committee observed that Committees are not ideally suited to conducting specialised investigations into particular events because of perceptions of partisanship—we have had a little bit of that today—and the limits of ongoing co-operation which could reasonably be expected from Government, and because their evidence-taking procedures are not well suited to drawing out the truth from witnesses. I agree with that assessment. Because of the extraordinary tone adopted by the Prime Minister and the Chancellor, this inquiry has already been poisoned by political partisanship—a point recognised, to his credit, by the hon. Member for Chichester (Mr Tyrie).

A parliamentary inquiry would be dependent on support from Treasury officials who are answerable to obviously partisan Ministers. The rules for parliamentary Committees are in a state of flux; they are obscure and potentially difficult to enforce. A judicial inquiry, as the Prime Minister has said, would have a team of barristers and experts in their field to get at the truth. It is for those reasons that the House rightly chose to set up the Leveson inquiry. Although the Culture, Media and Sport Committee did a good job in examining conduct at News International, it had some obvious limitations. First, the Committee’s powers were insufficient to get at the truth, a matter that is currently being considered by the Standards and Privileges Committee. Secondly, the Culture, Media and Sport Committee was unable to agree a unanimous report and split on party lines, diluting its effect. A judicial inquiry would command widespread public support because of the requirement on those involved to act in a non-partisan way. This House made the right choice in opting for a forensic, judge-led inquiry. It should do so again today.

The Prime Minister has made the wrong choice. The Government first opposed holding any inquiry at all.

[Sarah Newton (Truro and Falmouth) (Con)]

Will the hon. Lady give way?

[Ms Eagle]

No, because there is only a minute left.

With no consultation with Opposition parties, the Prime Minister announced a tightly drawn parliamentary inquiry. He first opposed a parliamentary vote, only then to give way. Over the last three days, on every day, at every stage, the Prime Minister has made the wrong choice.

This inquiry will have a Government majority, so far as we can see, because the Prime Minister’s guiding principle has been partisan interest, not the national interest. From day one, the Prime Minister, the Chancellor and their parliamentary outriders—we have heard from some of them today—have smeared their way around this issue with innuendo and noise, in order to cover up and make it as partisan as possible.

The Government had a choice this week, but they made the wrong one. They have rejected an independent inquiry to get to the truth of what has gone on in the banking industry when we could have had all-party agreement. They have rejected the opportunity to work on a cross-party basis and instead have sought to maximise narrow partisan interests. The result was the start of our debate today. The Government have rejected the opportunity to begin the work to reshape our banking industry so that it plays a positive role in Britain’s economic future and trust is restored, but I hope that Government Members will see sense and join us in the Lobby today. These issues are too important to be dealt with as the Government suggest and the British public will not be satisfied with anything less than a full, forensic and judge-led inquiry.