Bank official denies being asked to ‘lean’ on Barclays

Labour last night seized on his comments as proof Chancellor of the Exchequer George Osborne was wrong when he claimed last week that figures in Gordon Brown’s inner circle were involved in putting pressure on the bank.

Mr Osborne’s allegation led to a furious clash in the House of Commons on Thursday with shadow chancellor Ed Balls, who said he had been falsely accused “in the hope of political advantage”.

Yesterday Mr Tucker told the Commons Treasury Committee he had spoken about the Libor rate in 2008 with the then Downing Street chief of staff Sir Jeremy Heywood, his predecessor as Number 10 chief of staff Tom Scholar, then Downing Street adviser Sir Jon Cunliffe and Treasury permanent secretary Sir Nicholas Macpherson.

These were the “senior Whitehall figures” mentioned in former Barclays boss Bob Diamond’s note of his phone conversation with Mr Tucker in October 2008.

But in a key exchange with committee member and Labour MP Pat McFadden, he denied that either they or Government Ministers had encouraged him to put pressure on Barclays.

Responding to Mr Tucker’s evidence, Mr Balls last night issued a statement which said: “It is now absolutely clear that the Chancellor’s allegations last week were totally false and completely without foundation. “George Osborne should now publicly withdraw these false allegations and apologise.

“With the economy in a double-dip recession and our banks in need of serious reform, the country needs a Chancellor who works full-time in the national economic interest.”

Meanwhile Ed Miliband’s proposals to reform banks came under criticism from the Tories who pointed to Labour’s failure to act during the previous government’s time in office.

The Labour leader had accused the Government of “failing to rise to the challenge of reforming our banks”, as he set out a blueprint for change, including forcing the “big five” to sell up to 1,000 more branches to increase competition.

Mr Miliband pointed to the Libor rate-fixing scandal, the mis-selling of complex insurance products, the failure to lend to business and the “fleecing” of customers with payment protection insurance as proof that the banking industry has become “economically damaging and socially destructive”.

But Conservative MP Matthew Hancock said: “Ed Miliband and Ed Balls had 13 years to reform the banks when they were at Gordon Brown’s side, but failed. They even failed to implement their own banking competition review when they were at the Treasury – so the dominance of the big banks actually got worse under Labour.”

Now the parties should work together: Page 11.