Reply from Sir George Young MP

  • codified
  • 26/10/08 31/05/09
  • a depositor
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Posted: Thu, 30/10/2008 - 11:29

I was pleased to get a reply from Sir George. But I have looked through other replies and it seems MP's sympathise but think we are OK because we could get GBP 50 000 back from the DCS. That's less than half what I had in my account and I understand it could take years to receive it!

Thank you for contacting me about the compensation for British savers with deposits in offshore banks. I know that the coming weeks will be anxious ones for you.

I am happy to press the Government on how it intends to help people in your position and have passed on your letter to the Chancellor. I will let you have a copy of any reply I receive.

Questions have arisen about the accuracy of Mr Darling’s claim that that Icelandic Government had ‘no intention of honouring their obligations’ to compensate British depositors. This claim was used by the Government to justify the freezing of the assets of Icelandic banks. A transcript of a conversation between the Chancellor and his Icelandic counterpart is inconsistent with Mr Darling’s claims and makes his justification for freezing assets look increasingly shaky. However, I still believe that it is right to compensate Icesave depositors.

I appreciate that there is a concern that the Government’s actions had a knock-on effect on banks based in the Isle of Man and Guernsey. My colleagues on the Shadow Treasury Team have pressed Ministers about whether they understood the threat that their actions posed to such banks, which have many British customers who will not benefit from the guarantees given in the UK. Conservatives have asked whether the Government properly thought through how freezing assets in the UK would impact on solvent Icelandic banks elsewhere.

As the Government continues its talks with the Icelandic authorities it will have to examine the knock-on effects of its actions.

I understand that the first £50,000 of deposits held in Kaupthing Singer & Friedlander Isle of Man (KSFIOM) are protected in the event the bank is declared in default. This is the same level of protection that is normally afforded to depositors in banks based in the UK. The UK Government has agreed to act on behalf of the Isle of Man in negotiations with the Icelandic Government.

Once again, thank you for taking the time to contact me.

Best wishes

George Young

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