Libor scandal: David Cameron backs George Osborne over Ed Balls Libor accusations

PRIME Minister David Cameron has given Chancellor George Osborne his full backing in a row over the Labour government involvement in the rigging of the Libor rate.

• David Cameron backs George Osborne’s assertations that shadow chancellor Ed Balls “has questions to answer” over alleged Libor involvement

• PM: “Now, I am not sure that there is anyone is this House who does not think that the shadow chancellor has some questions to answer”

• Conservative MP Andrea Leadsom had earlier called on Osborne to admit mistake and apologise to Balls

There have been calls for Mr Osborne to apologise to show Chancellor Ed Balls after he said in an interview that Mr Balls was involved in the scandal.

Labour has demanded an apology following evidence from deputy governor at the Bank of England to MPs. He said no minister or Whitehall official asked him to lean on Barclays to lower its submissions to the Libor index.

Conservative MP Andrea Leadsom, a member of the House of Commons Treasury Committee which heard Paul Tucker’s denial, said Mr Osborne had made a mistake and should apologise.

Speaking to The Spectator magazine last week, Mr Osborne said that figures around Labour’s former PM Gordon Brown were “clearly involved” in efforts to persuade Barclays to understate the interest rates it was being charged in 2008.

He said: “My opposite number was City minister for part of this period and Gordon Brown’s right-hand man for all of it. So he has questions to answer as well. That’s Ed Balls, by the way.”

But today, Mr Cameron gave the Chancellor his full support and insisted he should not apologise.

The Prime Minister said: “If we look at what (Mr Osborne) said, he said that the shadow chancellor (Mr Balls) had questions to answer.

“Now, I am not sure that there is anyone is this House who does not think that the shadow chancellor has some questions to answer.

“I think perhaps before we break for the summer, we should remember what a few of those questions are.

“Who designed the regulatory system that failed?”

“Balls,” came the cries from the Tory backbenches.

Mr Cameron continued: “Who was City minister when Northern Rock was offering 110% mortgages? Who advised the Chancellor and the Prime Minister that there was no more boom and bust?

“Who helped create the biggest boom and the biggest bust and who has never apologised for a dreadful record that you had in office?”