David Cameron's plan to hold a short inquiry by MPs into the banking scandal ran into trouble today when the Tory MP he picked to chair it threatened to pull out.
Andrew Tyrie, the respected chairman of the cross-party Treasury Select Committee, said he would only take part if he had “the support of the whole House of Commons”.
It would be seen as an embarrassing rebuff to the Prime Minister and Chancellor George Osborne if Mr Tyrie, who prides himself on his independence, declined to run the parliamentary inquiry. One name being bandied about as a replacement is that of the respected banker Sir David Walker, whose career includes service as a senior official at the Treasury and the Bank of England.
A source close to the Treasury committee said: “It is hard to see how Andrew Tyrie can chair the inquiry after what he said.” Members of the committee went into private session this morning to decide what to do.
Labour is pushing for a judge-led public inquiry instead of a parliamentary probe and will force a vote of peers this afternoon in an attempt to trigger a rebellion.
Mr Tyrie told the BBC: “I am certainly not going to want to run an inquiry that is in any sense partisan or perceived to be partisan. I would not be prepared to participate if that were the case.”
Mr Osborne claimed Labour was afraid of what the inquiry might reveal about the role of shadow chancellor Ed Balls as City Minister in the run-up to the banking disasters: “I think the people who will be most afraid of where any inquiry goes are the people who were in charge at the time and no one more than me would like to see Ed Balls in the dock.”
The Chancellor insisted that a judge-led public inquiry would take too long. “It would take months to set up, it would be two years to run and then lead to legislation in 2016-17,” he said. “It is not what the country wants. A proper, parliamentary inquiry with real powers to hold evidence under oath [will] get some answers in the next few months instead of waiting till a decade after the scandal itself. So let’s get on with the job.”
However, a senior Labour source said: “We are increasingly confident that we will get a public inquiry by the end of the week.”
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Former Treasury committee chairman Lord McFall, for Labour, said: “I think it [the inquiry] has been soured already. I think that is a sad, sad thing because we are dealing with a hugely important issue here, not just of national significance but international significance given the position the City of London has in the global financial markets.”
