MPs to decide on format for banking inquiry

MPs will decide on Thursday whether a judge-led, public inquiry or a parliamentary inquiry is the best response to the Libor rate-rigging scandal, Commons Leader Sir George Young has announced.

In an emergency business statement on 3 July 2012, Sir George notified MPs of the late change to the scheduled debates for Thursday.

The Commons will debate the merits of the government's case that a committee of peers and MPs should investigate the matter.

Labour has argued that a parliamentary inquiry would be inadequate, and would not command the respect of the public.

Sir George confirmed that the Commons would be able to decided between "two alternatives...the inquiry that has been proposed by the opposition and the joint committee that has been proposed by the government".

He did not reveal whether coalition backbenchers would be whipped to support ministers' position on the subject, although he did note that the government had "made its views known".

Some MPs were perturbed that the debate would now take precedence over two backbench-led debates that had been due to take place on Thursday, on investigations into breaches of the ministerial code, and on VAT levied on air ambulance fuel.

Tory MP Peter Bone condemned the move as an "outrage".

He said: "This is the executive imposing their will on backbench time."

The debate should have taken place in government time, he suggested.

The statement came shortly after Barclays boss Bob Diamond and another of the bank's most senior executives resigned following the inter-bank interest rate rigging scandal.