A House of Commons vote on Thursday night ruled out Labour’s demand for a judge-led public probe into Barclays rate-rigging scandal, leaving Ed Balls no choice but to agree to cooperate with a parliamentary investigation into the matter.

The Shadow Chancellor, however, maintained there was a strong case for an independent judicial inquiry into the banking fiasco which has led to a series of resignations at Barclays and has also tarnished the bank’s reputation.

While the government wanted Andrew Tyrie to conduct the inquiry, Labour resisted the move, saying that Tyrie’s inquiry would fetch “incredibly limited” results that won’t accurately reflect the prevailing “culture and practices of the banking industry which the public wanted”.

Labour’s insistence for a judge-led inquiry led to heated exchange between Ed Balls and George Osborne at the Commons on Thursday, with the latter claiming that Labour was involved in the Libor row.

In response to the Chancellor’s allegations, Ed Balls asked him to submit evidence or keep quiet. The Labour politician also said Osborne’s “cheap and partisan” conduct is demeaning to his chair.

It is learned that Bank of England deputy governor Paul Tucker, together with Marcus Agius, will provide evidence on the Libor scandal next week. Tucker’s possible involvement in the misconduct was revealed by Bob Diamond, who said the deputy governor in 2008 informed him about “Ministers in Whitehall” talking about Barclays’ high Libor rates.

A Labour source has revealed that the party will not withdraw their demand for a judge-led inquiry into other civic issues.

Related:
Bob Diamond defends Barclays in Libor rigging scandal
Barclays rate-rigging scandal: George Osborne blames Labour
David Cameron, Ed Miliband clash over Barclays rate-rigging scandal

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