The Libor scandal is both a threat and an opportunity for Labour. The threat is that the abuses took place under a regulatory system that was devised by the last Labour government and by a Chancellor who both Eds worked for. As I said yesterday, the Tories are determined to hammer Balls — a former City minister — on this.
But the opportunity is that it offers Ed Miliband a chance to act as if he is the tribune of the people, the leader brave enough to take on the powerful. So as with News International and phone hacking, we’ve seen Miliband getting out in front in terms of calling for the top people at Barclays to go and Labour is also backing an independent inquiry into the banks, something the government is currently opposed to.
One other thing to watch is how the Treasury select committee behaves. If it came out for an inquiry, then the government would find it very hard to resist demands for one.
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