Ed Balls misses the grumpy chancellor | Michael White’s sketch

MPs on both sides piled in to condemn wicked bankers and incompetent regulators – at least those not on their watch

Quite apart from the latest banking scam, Westminster suffered a small domestic tragedy on Thursday. George Osborne felt obliged to assure MPs in person that he is almost as angry as they are about internet poker players at Barclays fiddling the interest rates on which London’s tottering financial services empire depends. And Ed Balls wasn’t present to roll in the mud at the chancellor’s discomfort!

Tragic or what? This wasn’t Hamlet without the prince or even Macbeth without Lady Macbeth. But it was certainly Julius Caesar without Cassius, Othello without Iago, the devious ex-special adviser who had conspired for so long to persuade the brooding Moor of Kirkcaldy to smother Desdemona Blair, his estranged partner.

When Osborne made his lunchtime report to the Commons Balls was trapped at a local government conference in Birmingham, trading soundbites directly with BBC radio. Not since the chancellor left Chloe Smith to the mercies of Jeremy Paxman in order to have dinner had there been such a skiving off.

“What did you do in the great Barclays war, grandad?” some tot, as yet unborn, will one day ask Lord Balls of Morley and Outwood. “I was talking to local government officers about forging a new and lasting consensus, son,” will come the reply. “Was that the day you finally lost the plot and took up dominoes, gramps?” “Drink up your Fruit Shoots, son.”

It was left to Rachel Reeves, Balls’s deputy and a former teenage banker, to fill the aching void, which she did adequately rather than sufficiently, in the style of Chloe Smith. It cannot have helped her confidence to hear Tory shouts of “Balls, Balls” before she uttered a word. Reeves got in one good line: Bob Diamond of Barclays had described corporate culture as “how people behave when they think no one is looking”. It is what Lord Justice Leveson has been considering.

Naturally Osborne made the best of his opportunity, repeatedly reminding anyone who was still listening that the absent shadow chancellor had been City minister every day during the crucial years Barclays traders had been fiddling the market. Never absent then, eh! Labour and the tripartite regulatory regime it put in place had been “completely clueless” about what was going on, Osbo suggested.

All this was true and MPs on both sides piled in to condemn wicked bankers, incompetent ministers and regulators, at least those in place before 2010 (Tories) or (Labour) since. Only the likes of Labour’s Chris Bryant reminded them that all parties had been so scared of losing Britain’s biggest industry that they had grovelled to the rascally bean counters.

Osborne had a particular problem on Thursday, almost as acute as Iago Balls. Throughout the relevant period he had been urging an even lighter-touch regime to govern the City than the titanium-lite system for which Balls used to claim credit whenever Gordon Brown was out of ear shot. Ask them what they want and give it to them. ” Free money? No tax? Of course.”

The chancellor solved his dilemma by being less cocky than usual and promising that the authorities would pull the bankers’ toenails out, if only (he added with sorrow) Labour’s inadequate bank laws allowed them to be prosecuted for market manipulation.

He goaded Alistair Darling, Labour’s post-Brown chancellor, into pointing out that he could still “take them off the road” to prevent more villainy, if he really wanted to. Osborne promptly got coy.

Amid the uproar one familiar noise could be heard from the Treasury bench – the sound of the Cameroons throwing over another old friend. Splash, splash! Last month it was Rupert, Andy, Rebekah and Raisa the police horse going over the side into the Thames, this month it’s Bob Diamond, his very rough diamond traders and party donors. “Never met them before, officer. Country suppers? What are they?”

It was a shaming day like the one when Argentina seized the Falklands, when the pound was humbled (again) or Anthony Blunt’s treason exposed. Beneath the cheap party banter, hard-boiled MPs seemed to feel it. When I was a banker we were dull but honest, we didn’t treat our customers as punters to be exploited, wailed Tory, Desmond Swayne. When did banking change?

“When you left,” replied Osborne. By happy coincidence that was in 1997 when shocking Tory bank scandals were just giving way to shocking Labour ones.

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