Banking scandal: Osborne defends cross-party probe

The Commission is expected to report before the end of the year

Chancellor George Osborne has defended the MPs chosen to investigate the banking scandal amid claims the probe will be a "whitewash".

Labour MP John Mann said he and Tory MP Andrea Leadsom had been left off the panel as they were "too outspoken".

But Mr Osborne said the members chosen were "a really good set of MPs" who could "get to the bottom of what happened".

The inquiry was set up after the Barclays Libor rate fixing revelations.

Labour had called for a full judicial inquiry into the culture and practices of British banking but when that was defeated by MPs, leader Ed Miliband agreed to co-operate with government plans for a smaller-scale probe.

Mr Miliband, Mr Osborne, Prime Minister David Cameron and shadow chancellor Ed Balls are all understood to have had a hand in selecting the MPs that will sit on the investigation.

'Joke'

They include Labour's Andy Love and Pat McFadden, Conservative MP Mark Garnier and John Thurso from the Lib Dems - all members of the Treasury select committee.

They will be chaired by Tory MP and Treasury Select Committee chairman Andrew Tyrie. Five members of the House of Lords will also join the panel.

Mr Osborne said: "We want a quick and rapid inquiry and we have got now the Labour Party to agree to that.

"This inquiry will have powers to summon witnessed under oath, to search for documents, to get to the bottom of what happened in banks like Barclays.

"I think we have got some a really good set of MPs and some real experts in the House of Lords and get to the bottom of what happened and get to the bottom quickly so we can change the law and make sure it doesn't happen again."

But the committee was branded a "joke" by Labour's John Mann, writing on Twitter.

Mr Mann said he and fellow Treasury committee member Andrea Leadsom, a former Barclays banker, were "both available but too outspoken on banking".

'Too narrow'

He insisted his complaints were not just about being left off the Commission, telling BBC News he "couldn't believe" Ms Leadsom was not on it.

Ms Leadsom, who has spent most of her career in the banking industry, recently called for Mr Osborne to apologise for suggesting Ed Balls was involved in fiddling interbank lending rates.

Mr Osborne did not answer directly when asked if this was the reason she had been left off the committee, saying: "The most important thing is we get to the bottom of what happened and we fix it."

Mr Mann also accused the Tory chair of the new inquiry, Andrew Tyrie, of pre-judging the Libor rigging scandal that prompted the new inquiry: "Tyrie had already reached his conclusions before he whitewashed Libor scandal".

Mr Mann told BBC News he believed the inquiry's terms of reference were "too narrow".

"It's only looking at the Libor, not at other market manipulation, or who the victims are and speaking to those victims," he added.

He accused Mr Tyrie of having "written its conclusions already" and said it was "wishy washy" to be exploring corporate governance, pointing out this has already been looked into by the Treasury select committee.

The formal name of the inquiry, which is expected to report before the end of the year, will be the Parliamentary Commission on Banking Standards.

It will investigate the professional standards and culture of the UK banking sector, taking account of the regulatory and competitive investigations into the Libor rate fixing scandal.

BBC political correspondent Norman Smith said the Commission is expected to hold sessions through the summer in order to meet its December deadline, although these may not be public hearings.

He said it would be able to appoint a leading barrister, like Robert Jay QC who is currently cross examining witnesses to the Leveson inquiry into media standards, to assist the Commission in its questioning.

The peers on the committee have yet to be announced, but there are expected to be five members drawn from the House of Lords.

The membership of the committee, our correspondent said, had been kept deliberately small to ensure it remains focused.

The establishment of the committee is subject to a vote in both Houses of Parliament at the beginning of next week.