Barclays Libor scandal: ‘Spivvy’ bankers should feel the full force of the law for rate fixing, insists David Cameron

PRIME Minister David Cameron has condemned “spivvy and probably illegal” actions by bankers who he said should be prosecuted for their actions, but refused to agree to a judge-led inquiry.

At Prime Minister’s Questions yesterday Mr Cameron said it was “outrageous” that homeowners may have been forced to pay higher interest rates as a result of efforts to rig the benchmark Libor and Euribor rates.

But he insisted his preference for a parliamentary inquiry was the best option for a “swift and decisive” investigation, which would enable the government to bring in recommended legislation next year.

Labour leader Ed Miliband said Mr Cameron’s reluctance to set up an investigation along the lines of the Leveson Inquiry into media practices showed he “does not get it” or understand the scale of public concern over the banking scandal.

During another angry PMQs, Mr Miliband urged Mr Cameron to stage a two-part judicial inquiry into the banking scandal which would make speedy recommendations for reform while also looking at wider issues. Putting forward his proposal, Mr Miliband said a two-part inquiry would be able to produce proposals for inclusion in a banking reform bill early next year, before going on to consider the wider banking culture.

However, Mr Cameron responded by challenging Mr Miliband to say whether he would support a joint parliamentary inquiry of MPs and peers – which the government favours – if it is passed in a Commons vote today.

“If he wants a quick resolution to this, he must accept the outcome of the vote in the House of Commons. I am prepared to do that, why isn’t he?” Mr Cameron said.

And Mr Cameron insisted there was no difference between him and the Opposition on the seriousness of the rate-rigging scandal.

“It is outrageous, frankly, that homeowners may have paid higher mortgage rates and small businesses may have paid high interest rates because of spivvy and probably illegal activity in the City,” he said in some of his strongest comments to date.

“People want to know that crime in our banks, crime in our financial services will be pursued like crimes on our streets.”

With a vote in parliament today over which type of inquiry to adopt, Mr Cameron also refused to accept demands from two Scottish Labour MPs – Glasgow Central’s Anas Sarwar and Michael McCann of East Kilbride – that there should be a free vote on the issue. Mr Cameron pointed out that a vote on Tuesday night in the Lords on the same issue was “heavily whipped by Labour”.