The Barclays scandal is a chance for Miliband to show leadership

The Labour leader most move swiftly to articulate public anger.

The time for "remorse" is over, Barclays chief executive Bob Diamond told MPs in January 2011. It turns out it wasn't. The revelation that Barclays repeatedly manipulated interest rates in a bid to increase its profits means that there is much remorse to come. The latest corporate scandal, combined with the ongoing crisis at the RBS-owned Natwest, should make banker-bashing an Olympic sport among politicians.

Labour has rightly called for a criminal investigation into Barclays, with former city minister Paul Myners accurately observing on Newsnight: "This behaviour will only change if people face the prospect of criminal charges." The sense, however, is that most in Westminster are waiting to see how many others banks are implicated - Lloyds and RBS are both under investigation - before showing their hand. With the exception of the Lib Dems' Matthew Oakeshott, Vince Cable's representative on earth, no senior politician has called for Diamond to resign.

Soon, however, the voters will be demanding answers. On tonight's Question Time, you can expect the audience to ask two questions: "why has no one resigned?" and "why hasn't a single banker gone to jail?" The mere announcement that Diamond, presciently described by Peter Mandelson several years ago as the "unacceptable face of banking", and other top executives will not accept bonuses this year (while retaining handsome basic salaries) will do nothing to sate public outrage. And rightly so. As Labour's Chuka Umunna notes on Twitter, "LIBOR is used to calculate interest rates for SME loans, student loans, credit cards etc - manipulation of it would affect most people".

So here is another opportunity for Ed Miliband to show political leadership as he did during the phone-hacking scandal and the row over Stephen Hester's bonus. On such occasions, where Miliband has led, Cameron has followed. If he is to set the political pace again, Miliband should use his speech to Unite's conference to call for Diamond to resign and for a criminal investigation into Barclays. 

Update: As I predicted, Miliband used his speech at Unite's conference to call for "criminal prosecutions" against anyone at Barclays who broke the law, although he did not call for Diamond to consider his position. See my post here for the full quote.

Barclays chief executive Bob Diamond has resisted calls for his resignation. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Jeremy Corbyn delivers a speech on the arts in north London on September 1, 2015. Photograph: Getty Images.
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Can Labour MPs force Corbyn to bring back shadow cabinet elections?

It is not up to the parliamentary party whether the contests are reintroduced. 

Soon after Jeremy Corbyn became the frontrunner in the Labour leadership contest, it was reported that he intended to bring back shadow cabinet elections. But as I later wrote, that's not the case. Corbyn has resolved that he will maintain the right to appoint his own team, rather than having it elected by MPs (as was the case before Ed Miliband changed the system in 2011). As he wrote in the NS: "Whoever emerges as leader on 12 September needs a shadow cabinet in place as soon as possible. I will appoint a strong, diverse shadow cabinet to hold this government to account from day one."

Now, ahead of his likely victory a week on Saturday, Corbyn is under pressure from some MPs to reverse his stance. Barry Sheerman, the former education select commitee chair, told me that he wanted a "serious discussion" within the PLP about the return of the elections. While some support their reinstatement on principled grounds, others recognise that there is a tactical advantage in Corbyn's opponents winning a mandate from MPs. His hand would be further weakened (he has the declared support of just 14 of his Commons colleagues). 

But their reinstatement is not as simple as some suggest. One senior MP told me that those demanding their return "had not read the rule book". Miliband's decision to scrap the elections was subsequently approved at party conference meaning that only this body can revive them. A simple majority of MPs is not enough. 

With Corbyn planning to have a new team in place as soon as possible after his election, there is little prospect of him proposing such upheaval at this point. Meanwhile, Chuka Umunna has attracted much attention by refusing to rule out joining the left-winger's shadow cabinet if he changes his stances on nuclear disarmament, Nato, the EU and taxation (a lengthy list). Umunna is unlikely to remain on the frontbench but having previously pledged not to serve, he now recognises that there is value in being seen to at least engage with Corbyn. Were he to simply adopt a stance of aggression, he would risk being blamed if the backbencher failed. It is one example of how the party's modernisers recognise they need to play a smarter game. I explore this subject further in my column in tomorrow's NS

George Eaton is political editor of the New Statesman.