09.07.2012
By Simon Miller
A Treasury select committee member has warned the Bank of England (BoE) against contempt of Parliament just hours before the deputy governor Paul Tucker is due to give evidence to MPs.
Labour committee member John Mann gave the warning after he received emails from the BoE about discussions related to Libor under the Freedom of Information Act.
The emails show the then-Prime Minister Gordon Brown's principal private secretary Sir Jeremy Heywood asking why the UK Libor rate remained high when US rates fell.
Heywood also forwarded a briefing note from UBS on 26 October setting out how Libor could be reduced faster which he sent to Tucker saying that he was "keen to discuss this general issue with [Tucker]...unless Libor does start to fall fairly sharply".
The release of this latest correspondence will put further pressure on Tucker who has already been accused of suggesting that Barclays should distort its Libor submission.
In an operational note, the then-chief executive of Barclays Bob Diamond said he had spoken to Tucker who had said there was pressure from "senior Whitehall officials" over Barclays' higher rate.
Although Diamond told the select committee that he did not think Tucker intended to suggest that Barclays should change their submission, Barclays senior investment banker Jerry del Missier thought it was an instruction to lower its figures.
Chairman of the select committee Andrew Tyrie said that email showed that there had been a "nod and a wink" to change the Libor rate.
Mann said that the BoE had delayed releasing of all copies of emails and transcripts of telephone conversations between Tucker and Diamond between 1 October 2008 and the 30 November 2008 which he requested to be given in advance of the Diamond session last Wednesday.
Instead he received them this morning and warned the BoE of the dangers of being seen to be in contempt of Parliament.
Mann commented: "The information released today would have been critical for the Diamond meeting last week. They would have understood the urgency of the request and this clearly displays their contempt of the Parliamentary process."
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