Yet another letter to Aistair Darling

Posted 23/11/2008 - 07:31 by tonycBrisbaneOz

Rt Hon Alistair Darling, MP
Chancellor of the Exchequer
HM Treasury
1 Horse Guards Road
LONDON SW1A 2HQ
United Kingdom.

19th November 2008.

Dear Mr Darling,

I would like to add bring to your attention a reversal of your party's commitment to open government. In 1997, after a generation of Conservative government New Labour was elected and in your party's 1997 manifesto is a paragraph on open government, it starts "Unnecessary secrecy in government leads to arrogance in government and defective policy decisions". However, 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. Often, embarrassing facts about controversial issues that governments and bureaucracies would prefer to keep quiet find their way into public view. And, in light of this I would also like to point out that if forced to own up to an injustice it is likely to be more embarrassing and costly to the government, and thereby the tax payer. Wouldn't it be better to admit that an action designed to protect people's savings has had unintended consequences? But then again perhaps nothing has really changed since 1997.

I would like to once again draw your attention to the collapse of Kaupthing, Singer and Friedlander and 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.

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

Yours faithfully,

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