Andrea Leadsom, whose forensic questioning of the former chief executive of Barclays, Bob Diamond, led to his only uncomfortable moments during last week’s cross-examination by the Commons Treasury Select Committee, said: “I don’t think we felt we did a fantastic job. It’s a fair criticism to say, ‘You guys were useless’.
“We had great weaknesses in that we didn’t have email trails. We didn’t have recordings of the morning meetings where you could point to what had been said. All we really had were the regulators’ reports, what we’d seen in the media.”
Her frank remarks, in an interview with The Independent, will raise doubts about whether the larger parliamentary inquiry being set up to investigate the banking scandal will be able to uncover the whole truth.
David Cameron has rejected Labour’s calls for a judge-led inquiry, arguing that it would take too long. Several of the MPs who questioned Mr Diamond last week are now considering calling him back for a second bout because they are dissatisfied with his answers.
Paul Tucker, the Deputy Governor of the Bank of England, will be questioned by the same committee today about the now-infamous telephone call he had with Mr Diamond at the height of the banking crisis in 2008. Any clash between his evidence and Mr Diamond’s will add to the pressure for the former Barclays head to be recalled.
One of the committee members, Pat McFadden, who was a business minister under Labour, said: “I can see that happening [Mr Diamond being recalled] after we have talked to other witnesses. There were some inconsistencies in what he told us. We’ll ask Tucker if his version of the phone call tallies with Bob Diamond’s.”
Ms Leadsom complained that she found parts of Mr Diamond’s evidence “simply unbelievable”, while John Mann, another Labour member of the committee, said that he “may not have been entirely honest in his answers”.
Tomorrow the Treasury Select Committee will ask the outgoing Barclays chairman, Marcus Agius, about the state of mind of executives who thought it was acceptable to rig interest rates. He can also expect to come under pressure not to allow Mr Diamond his full pay-off, reputed to be £17m. The Business Secretary, Vince Cable, told the BBC yesterday that the public would regard it as an “outrage”.
The shadow Chancellor, Ed Balls, added: “It’s outrageous that somebody should stand aside because the board decides that there’s a problem and then get a payout which is sort of off the scale for anything normal people will earn in their lifetimes. How can that be?”
The Deputy Governor of the Bank of England, Paul Tucker, will today be asked by MPs about the phone call with Bob Diamond, the Barclays’ chief executive, on 29 October, 2008, following Mr Diamond releasing his memo of the call. He will be asked whether he sanctioned Barclays and other banks submitting artificially low estimates of their borrowing costs at the height of the financial crisis.
Job creation in Britain plumbed a near three-year low in June as employers viewed the future less optimistically than at any time since 2007, signalling a likely spike in unemployment days after policymakers moved to shore up an ailing economy.
The British labour market has so far showed resilience in the face of a second recession in four years, and the number of unemployed in the country has even declined.
But today’s Recruitment and Employment Confederation (REC) and KPMG jobs survey showed that, last month, numbers of permanent placements fell at the sharpest rate in almost three years.
Economic growth has been held back by a tough austerity programme under the Conservative-led government’s deficit-reduction programme.
UK firms have also been rattled by the debt crisis that has raged through the euro zone, Britain’s largest trading partner, for over two years and shows no sign of abating, a separate survey, of chief finance officers by accounting and consulting firm Deloitte, showed.
“The CFO survey underscores the connection between the macroeconomic environment and corporate behaviour,” Ian Stewart, Deloitte chief economist, said in the report that saw the biggest decline in employer confidence since 2007.
“CFOs see plenty of risks ahead. Economic uncertainty remains the big constraint on corporate expansion.”
Large UK companies entered 2012 with the view that a breakup of the euro posed the biggest threat to their business, Deloitte said, adding that CFOs see hiring declining over the coming year.
They gave a 36 percent chance at least one member will leave the common currency zone, up from 26 percent last quarter, the Deloitte survey found. A Reuters poll of 59 economists last month found 37 saying the bloc would survive in its current form for a year.
Faced by a likely worsening of the euro zone crisis, the government is under pressure to take steps to revive growth and match stimulus efforts by the Bank of England, which on Thursday restarted the printing presses by announcing an additional 50 billion pounds of government bond purchases.
Both surveys were collated prior to the BoE’s policy shift.
JOBS UNDER THREAT
The REC permanent places index, which measures how many extra workers are being hired, dropped to 46.8 in June, down from 51.0 in the previous month. A reading above 50 signals growth in placements, a number below a decline.
“A decrease in hiring activity means we could see a period of increased unemployment, especially as a new wave of school leavers and graduates will be entering the labour market over the summer,” said REC chief executive Kevin Green.
The number of temporary placements declined for the seventh month running while both average salaries for permanent staff and wages for temporary employees remained broadly unchanged.
Bernard Brown, partner and head of business services at KPMG, said the survey was a sobering reminder of the weak economic situation. “The real worry is that the acceleration in the pace of decline suggests this isn’t a mere blip,” he said.
“If this trend were to continue, there’s a very real chance we could hit a 3 million unemployed figure in the UK in the not too distant future,” he said.
Numbers of people without a job on the ILO measure fell by 51,000 to 2.615 million in the three months to April, though those claiming unemployment benefit ticked up in May.
Overall vacancies increased by the smallest amount in five months, though temporary vacancies grew at a marginally faster pace than in May, the KPMG/REC survey showed.
Recruitment consultancies also signalled higher levels of availability amongst both permanent and temporary staff.
One of the main problems which hasn’t been mentioned here is that the money nowadays isn’t based on anything material. The money you borrow from banks is just typed on a computer and appears in your account. It’s money that didn’t exist before, the bank didn’t have it and now you’re paying interest to the bank for money they just made up.
The FIAT currency system must be stopped because in the end the only outcome is that the banks own everything. Further, the Bank of England must be nationalised, these Quantitative Easing money releases merely devalue the money that already exists (pensions and savings) and then the BoE charges interest on the new money created, who benefits? The BoE stockholders like the Queen and other very rich families who own all the banks as well.
Split the high street banking section from the financial city sections of the banks. The people serving us in the local banks are not the problem and never have been. It’s the culture in the City of London financial industry that needs to be be changed and severely monitored.
The bonus system should be got rid of and no one should receive a golden goodbye payment of any kind when having to leave because of disastrous results/activity – to most of us, that is simply obscene.
It seems to be part of the general culture of greed versus need, where effective control is essential for the benefit of all… another example is housing, an inevitable area of investment when interest rates are so low, where taxes need to be raised on second (and more) homes to such a level that such investment is uneconomic…. and houses would become more affordable for those who need them. BUT, first there’s a declaration of interest to be made by MPs re their home ownership… is it really true that that David Cameron has five, and Tony Blair even more?!
On the one hand Labour leader Ed Miliband is to set out a blueprint for fundamental reform of the banking system, including forcing Britain’s five main banks to sell up to 1,000 more branches to increase competition.
The leader of the opposition will point to the Libor rate-fixing scandal as vindication of his much-criticised attack last year on “predatory” capitalism and promise wide-ranging action.
He will detail the proposals in a speech to the Co-operative Bank, which is in exclusive talks with Lloyds Banking Group to buy more than 600 of its branches.
But he will say that he wants at least one other privately-run “challenger” bank to be given the chance to break into a market dominated by the five best-known names – Barclays, HSBC, Lloyds, RBS and Santander.
Mr Miliband’s speech comes as Bank of England deputy governor Paul Tucker will attempt to clear up his involvement in the rate-rigging affair after being dragged into the scandal by former Barclays boss Bob Diamond.
Mr Tucker, a forerunner for the position of Bank governor when Sir Mervyn King steps down, faces a series of questions from MPs on the Treasury Select Committee over discussions he had with Barclays on the key inter-bank lending rate known as the Libor.
The deputy governor found himself in the spotlight after Mr Diamond disclosed a note of a phone call between the two men, in which Mr Tucker appeared to encourage the bank to submit lower Libor submissions in light of concerns from senior Whitehall figures.
Other elements of a shake-up of the banking sector to be put forward by Mr Miliband include a code of conduct with a power to permanently “strike off” errant bankers modelled on the British Medical Association and a specialist banking unit set up with the
Amid continued controversy over a potential multimillion-pound payoff for Mr Diamond, the Labour leader will also back EU proposals – opposed by Chancellor George Osborne – to set a maximum 1:1 ratio of bonus to pay.
“The revelations of the last two weeks have shown precisely what has gone wrong with our economy in the last decades,” he will declare before taking questions alongside shadow chancellor Ed Balls.
In describing “a better banking system”, he will say: “It will mean root and branch change for our banks if we are to deliver real change for Britain, if we are to rebuild our economy so it works for working people, and if we are to restore trust in a sector of our economy worth billions of pounds and hundreds of thousands of jobs to our country.”
The new standards watchdog would be to tell someone they could “never again work for a bank in this country”, with the new crime unit ensuring “our country is no longer a soft touch for white-collar crime”.
“And we would tackle the bonus culture, including supporting the international action that the Government opposes, to bring rewards into line with performance,” Mr Miliband will say.
As Mr Tucker prepares to give his evidence to MPs, a Tory member of the Treasury Select Committee has admitted that she and her fellow politicians were “useless” in uncovering the truth behind the Libor-fixing affair when they quizzed Mr Diamond last week.
Andrea Leadsom told The Independent that their scrutiny of the former Barclays boss was hamstrung by a lack of access to paperwork, including email trails and recordings of meetings, which left the committee “batting in the dark”.
She said: “I don’t think we did a fantastic job either. It’s a fair criticism to say ‘You guys were useless’.”
Then on the other hand the more that I look into the coalition budget spreading the more concern one becomes. When I look into the cuts this coalition have introduced so far I and I’m sure the voters are getting very tired of reading, and listening to the coalition using a stalemate words it’s Labour fault that we are in this mess.
But let’s reverse to when we had a Labour Government they used the words to under Tony Blair and Gordon Brown leaderships of Labour. The difference was both Gordon and Tony could use those words cleverly to show how bad it was under a Tory Government in regards to 18 years of underfunding of Public Services.
If we compare notes we will all can agree that both Gordon and Tony introduce PFI to try ease the burden on Public Services spending not just in NHS but on highways which replaced CCT which was introduced by Tories.
Who can remember the slogan Education, Education Education?. In regards to Education Department it was under Labour govt that introduced Academies as a part funding from the Govt and the rest from the business and public. Some may want to say pfui. I say look into the history and learn from it.
To make matters worse granted it meant to be a joke from Liam Byrne MP which back fired on him when he said there was no money. I still think that he should not have written it as this gave the ammunition that the coalition wanted to use against Labour which it worked.
I still think that Labour can recover to win all elections in time. Let us not forget its Labour policies that will gain the trust of voters and this be transparent in its manifesto. Let us continue to sing the praises of what we had achieved whilst in government.