George Osborne: Labour aides, not Bank of England, to blame for rate-rigging scandal His comments come as Bob Diamond prepares to give evidence to MPs this afternoon - the day after he resigned over the scandal. He is expected to be questioned over the memo of his telephone call with Paul Tucker, the deputy governor. The Barclays memo also records that "senior figures within Whitehall" questioned why the bank was having to pay so much interest on its borrowings. Mr Osborne told the political magazine that Labour ex-ministers and aides have serious questions to answer. "They were clearly involved and we just haven't heard the full facts, I don't think, of who knew what when," he said. Mr Osborne particularly pointed the finger at Ed Balls, now Labour's shadow chancellor. "My opposite number was the City minister for part of this period and Gordon Brown's right hand man for all of it," he said. So he has questions to answer as well. That's Ed Balls, by the way. Mr Balls has strongly denied any involvement in the Libor-fixing scandal. Two peers, Lord Myners and Baroness Vadera, were also ministers during the period Barclays submitted false rates for Libor. The Chancellor also warned that Britain must guard against other financial centres trying to steal business off the City of London in the wake of the scandal. "There are lots of people around the world who are jealous of London and the UK because of its pre-eminence as a global financial centre," he told the Spectator. He gave the interview as David Cameron suggested a forensic public inquiry led by a judge would be too long and costly at a time when Britain's economy is recovering. The Prime Minister instead wants to hold a parliamentary inquiry into the banks, but Ed Miliband, the Labour leader, has so far refused to give his support. Labour is pushing for a full judge-led hearing and could block the Government from getting cross-party support for speedy process conducted by MPs and peers. The Prime Minister's spokesman this morning suggested that the Coalition could push on with an investigation without the support of Labour. In some of his strongest comments yet, Mr Cameron told the House of Commons that the "spivvy and probably illegal activity" of the banks must be investigated fully. "This banking scandal is appalling," he said. It is outrageous, frankly, that homeowners may have paid higher mortgage rates and small businesses may have paid higher interest rates because of spivvy and probably illegal activity in the City. He also suggested the Barclays should not be giving Mr Diamond a huge severance package, which could total as much as £20 million. "It would be completely wrong if people who were leaving under these circumstances were given some vast pay-off," Mr Cameron said. It would be completely inexplicable to the British public and wouldn't be right and I very much hope that doesn't happen.