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.