Mass Mailed Letter to Liberal Democrat MPs

Posted 23/11/2008 - 08:20 by tonycBrisbaneOz

Email subject: Government Secrecy and the Collapse of Kaupthing Singer and Friedlander

Dear (MP's salutation inserted here),

In 1997 the then opposition party made a commitment to open government and in its 1997 manifesto is a paragraph that starts "Unnecessary secrecy in government leads to arrogance in government and defective policy decisions." Now that New Labour are the government they certainly seem to have an appetite for this behaviour.

The court orders surrounding the seizure of KSF UK are sealed. This apparently is without precedent and inevitably gives the impression that the government has something to hide. Nevertheless, embarrassing facts about controversial issues that governments and bureaucracies would prefer to keep quiet do find their way into public view. I would also like to point out that if forced to own up to an injustice it is likely to be more embarrassing to the government, possibly a future government in which your party holds the balance of power, and eventually more costly to the tax payer. I urge you to press the government on this matter and get them to admit that an action designed to protect peoples' savings has had unintended consequences.

I would like to once again draw your attention to the collapse of Kaupthing, Singer and Friedlander subsequent to the seizure of KSF UK assets. You may not be aware that the action by the British Government in seizing these assets of the bank in order to protect the depositors has had quite the opposite effect. Included in the assets frozen in the UK were some £557 million belonging to thousands of depositors of KSF Isle of Man, mostly UK citizens.

Around the world depositors in failed banks are being compensated to the tune of 100% of their deposits, except us. Given the Isle of Man does not have sufficient funds to cover to the £557m seized by the UK is it not possible that thousands of ordinary savers loosing substantial deposits in crown dependencies will result in the loss of confidence in them as a safe place to bank their money? And, given the global nature of finance the consequences of a loss of confidence in UK dependences are unlikely to be confined the Isle of Man, Jersey and Guernsey. The inter-dependence of confidence in financial institutions around the world is linked as has been amply demonstrated in recent months.

The UK government has so far denied any responsibility for the collapse, preferring to place the blame on Iceland. In turn, despite there being written guarantees in place for support from the parent of KSF to its Isle of Man subsidiary, the Icelandic government who now operates KSF has also refused to admit any responsibility and has not honoured the guarantees. This has left the Isle of Man government in a quandary and many depositors have lost their life savings, me included.

If Iceland is truly to blame and the government has nothing to hide what does it have to loose in unsealing the court orders and making their contents public? Would this not strengthen the case against Iceland?

Given the high regard that Gordon Brown is held in with respect to his handling of the financial crisis surely he can be a big enough statesman to admit that there have been some unintended consequences of the UK government's action. I would urge Nick Clegg to press the Prime Minister on this.

Background details found at can be found at
http://www.ksfiomdepositors.org/node/919

The stories of those who have lost everything can be found at http://www.ksfiomdepositors.org/forum-topic/your-stories

As I am not constituent I appreciate that I cannot expect your help directly in this matter. Nevertheless some of your constituents may have been affected by this and I urge you to play a part in reversing this new found interest in closed government more worthy of a 3rd world dictatorship than a democracy.

Yours sincerely,

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