RSS Feed

Libor libel: has George Osborne defamed Ed Balls?

Posted on

Following UK Chancellor George Osborne’s apparent fingering of former Labour Government figures over the Libor affair – and his failure to either apologise or substantiate the claims, the question arises, has Osborne libelled his opposite number Ed Balls or members of the previous Labour Government?

Baroness (Shriti) Vadera has acted to ensure the media does not imply her involvement in pressing Barclays to reduce its Libor Panel submissions (she was former financial adviser to the Labour government in 2008 and had legitimately expressed the need for Libor to come down) and she has gained the deletion of a section of Question Time in which journalist Dominic Lawson repeated the Osborne claim.

Basically Osborne’s allegation is that people close to former prime minister Gordon Brown “were clearly involved” in the Libor issue – and the interview in the Spectator suggests he means they were involved in pressing for Barclays to reduce its Libor Panel submission so Libor would fall with a beneficial effect on interest rates generally.

The truth of the matter is that the Government was indeed worried about Libor and Barclays’ high submissions – and considered perfectly legitimate assistance to bring it down (explained in The still missing killer email). There is no evidence of wrongful pressure brought on Barclays by Vadera or Balls (who was Children’s Secretary at the time, not with the Treasury).

Libel is a defamatory statement in a permanent form – including broadcast in these iPlayer, YouTube days. The BBC would not be liable for Dominic Lawson’s live statement “as the broadcaster of a live programme containing the statement in circumstances in which he has no effective control over the maker of the statement” (S.1(3)(d) of the Defamation Act 1996) but probably would be liable if it kept it on a BBC website.

To prove libel it has to be shown that the statement was defamatory, that it was published and that it referred to the complainant (including that the person is identifiable if unnamed). To avoid liability the defendant must then prove it is true or “fair comment on a matter of public interest” or was covered by privilege – as Osborne’s comments in Parliament were, though not those to the Spectator. Defamation is an untrue statement that injures someone’s reputation including lowering him or her in the esteem of right-thinking members of society. On the face of it suggesting illegitimate pressure on Barclays would damage the reputations of those against whom the allegation is made.

Osborne, since the most recent revelations and testimony that fail to support his apparent implication has not elaborated or apologised, simply repeating that Balls “has questions to answer”.

Here, to give context, are some extracts from the Spectator article. It makes clear that Osborne was in a good mood as a result of the Libor scandal: “He saw almost instantly that a story that started with 14 big boys at Barclays trying to make a profit by hook or by crook could fast turn into something that threatens to destroy reputations in Westminster as well as in the City.” (Trashing reputations is what gets George Osborne up in the morning – even at the expense of a trashed economy all around him.*)

This element of the story is about failed regulation from 2006-08 when the Barclays boys were trying to manipulate Libor for profit. It is arguably fair enough to make political hay out of this sort of thing on the grounds that it happened on Labour’s watch and under Labour regulations – it is fair comment on a matter of public interest.

‘They were clearly involved and we just haven’t heard the full facts, I don’t think, of who knew what when’ – Spectator’s ‘bombshell’ Osborne quote

But the article goes further, focusing on late 2008 when the Government and the Bank of England wanted interest rates down and were concerned that Barclays was keeping them up through its Libor submissions. The article has Osborne first blaming the regulatory system for Barclays’ 2006-08 behaviour but it then goes on:

But suddenly, and far more explosively, he moves on to the political efforts to keep Libor low during the financial crisis of 2008.As for the role of the Labour government and the people around Gordon Brown, well I think there are questions to be asked of them’, he says. He starts to discuss reports that those in the Brown circle were pressuring Barclays to manipulate the Libor rate it was paying. Then he drops a bombshell: ‘They were clearly involved and we just haven’t heard the full facts, I don’t think, of who knew what when’.”

This, the Spectator goes on to say, “is a remarkable charge” – “But Osborne does not stop there.”

He continues: ‘My opposite number was the City minister for part of this period [May 2006 to June 2007] and Gordon Brown’s right-hand man for all of it, so he has questions to answer as well. That’s Ed Balls, by the way’.” For these last words, Osborne leaned close to the reporter’s microphone, we are told.

Thus the two issues become conflated, apparent failure of regulation, alleged pressure on Barclays to manipulate Libor. The Spectator is clear that none of this is “the usual political point-scoring” but “crucial to Osborne’s electoral ambitions”.

The potential libel, then, is specifically about 2008 and centres on the words “they were clearly involved”, meaning Labour Government figures. The Spectator wonders whether Osborne “intended to bring into question Balls’s defence that he couldn’t have known about any-rate fixing as he was Secretary of State for Children at the time”.

No defence
The fact that Osborne has not named those “clearly involved” would be no defence to a libel action if people such as Vadera or Balls were clearly identifiable as the target of the allegation. Vadera
is, arguably, identifiable, which, one might assume, is why she has taken action against the media to stop repetition of the untrue claim – libellous if deemed to be damaging to her reputation.

Balls, given his Children’s brief at the time, is less identifiable – except that Osborne seems to bring him into the frame as Brown’s “right-hand man for all of it” – meaning the whole period of 2006 to 2008. The Spectator suggests Osborne is seeking to undermine Balls’s Children’s Secretary defence – but that is not the same as Osborne actually pointing the finger at Balls regarding alleged government manipulation attempts.

This leaves Alrich in some difficulty. The burden of the allegations has been reproduced here. Repetition of someone else’s libels is still libel – even, in many cases, if you make clear you don’t believe it. All being well, though, a defence of “fair comment on a matter of public interest” will put paid to that.

There is, however, also a danger of suggesting that the Spectator, rather than Osborne, has committed a libel by its contextualising commentary on what Osborne said – implying it was directed at Balls by undermining his Children’s Secretary defence and implying it relates to the untrue claim of government pressure on Barclays rather than the just the regulatory background to Barclays’ Libor manipulation.

The answer to that would be that the man on the Clapham omnibus reading the Spectator (if he still bothers, rather than picking up a free copy of Metro like most people) would indeed draw that conclusion from the words published.

If Osborne did mean to point the finger at Balls, the Spectator’s implications that he did are not untrue – but the substantive allegation remains (we believe) untrue. The Spectator would be on the hook for publishing the claims even though they are Osborne’s. On this reading, the “bombshell” bit of what Osborne said was libellous and the Speccie should not have published it.

One suspects Osborne will rely on some of this for his own defence. He will insist that nothing he actually said explicitly or impliedly suggests Balls approached Barclays or was involved in a decision to approach Barclays to push down Libor. His attack was more of a scattergun affair justified as political knockabout or “fair comment on a matter of public interest” ie comment on the regulatory failure.

However, he has had ample opportunity to clarify which allegation he is making and has failed to do so. So what can be concluded with any safety? Perhaps we may use Osborne’s own formulation: the whole issue leaves him with questions to answer.

*Note: This, on the face of it, shocking suggestion – that Osborne cares more about scoring points against his opponents than dealing with bankruptcies, unemployment and rising poverty in Britain. It qualifies as a statemnt likely to bring him into “hatred,  ridicule and contempt”, according to the libel law formulation. Fortunately we are able to ridicule politicians, not merely because they are very often ridiculous, but also because “mere vulgar abuse” is accepted and excepted under libel law.

A more detailed look at the legal issues, including relevant cases, is here
See also the Defamation Bill 2012 PDF version, 113KB


Advertisements

About alrich

Journalist and blogger on legal and financial/economics issues

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: