Posts
Commenting on the situation facing councils that have money invested in Icelandic banks, Liberal Democrat Shadow Communities and Local Government Secretary, Julia Goldsworthy said:
"The first priority has to be that the Government supports councils to recover as much of their money as possible. It must also look at the potential for the capitalisation of any remaining debts to avoid service cuts or immediate Council Tax rises at all costs.
"We need to know the extent of the risk and under what circumstance councils made these commitments. Some councils that deliberately avoided taking these risks should have their prudence acknowledged.
"The real issue here is making sure that front line services like fire and policing, social care and transport are protected.
"The answer isn’t for the Government to guarantee these loans. That would simply pass the buck from local taxpayers to income taxpayers, which would not be much comfort to those already struggling to pay their bills.
"It is ridiculous for the Government to try to wash its hands of this, given that in many cases it is revenues councils were collecting for the Government, such as business rates, which are now at risk. These councils were operating within Treasury guidance.
"The next question is how far the problem will spread. PFI schemes for new schools and hospitals could be under threat."
Westminster must not dump the problem on the Welsh Assembly Government, as it has done for Scotland. That was one inference which could be drawn from TV interviews with the Secretary of State, Paul Murphy, last night. He gave no commitments, but gave the impression that it was enough for him to represent Wales in talks about the crisis.
Update: Neath Port Talbot CBC has issued a statement.
14 comments:
I might be missing something here (and please correct me if I am) but with regard to this whole Iceland affair the reason why people were sending their money to Iceland was that they were getting an interest rate that could not be matched by UK banks and also a Tax Deferral on interest accrued. Now that it has gone awry those investors expect the British Taxpayer to bail them out by using funds from a pot (Treasury) that they have blatently refused to contribute to. Is this correct?
All the private investors, and small businesses up to a certain size, will get their money back in full.
I would have said that they were being treated generously, given the warnings there were out there. However, the plight of seven LAs (who are still unsure whether their deposits can be recovered) in Wales has made me re-think.
As an analogy, think of your car getting stolen from outside your house. I can criticise you for leaving it on the street, rather than garaging it, but I would still expect the police to try to get it back again for you.
Frank Little
I must be missing the point then because with your analogy, the tax you have paid when purchasing the car, registering it, refuelling it, etc is in turn paying for that police service to "attempt" to recover it in the event of it being stolen.
What I am saying about the Icland investors is that they have not contributed anything in tax with regard to these investments and yet they expect the tax payer to pay for them to have their money back.
Perhaps i am being too harsh here but if I invested in an Icelandic bank, say on the LSE for example, that subsequently went into administration I would not expect the British tax payer to compensate me for my loss. Why doesn't the same apply to the loss of savings? In Either instance you are investing in the bank.
I might be missing something here.... but aren't Banks supposed to be safe places to put your money?
It's the policy of greed that have resulted in Banks lending money out to organisations and house buyers irrisponsibly.
So much for Gordon Brown saying an end to the Cycle of Boom and Bust!
The whole world financial market has toppled over like a house of cards due to irrisponsible lending by Banks in the UK and USA.
In the case of the local authorities, they were being encouraged from on high to (a) diversify; (b) get the best return on their balances for the benefit of their tax-payers. Otherwise, you may have a point.
But I can't resist reminding people of when Lloyd George took just three days to restore people's confidence in British banks.
Frank Little
Nice article Frank, but some bugger has sold all the gold!
To: Anonymous (10/10/08 14:30)
Whilst the banks are, and quite rightly, shouldering the blame for this crisis I cannot help thinking that we are all to blame in one way or another. Individuals know, or should know, if they can afford to repay a loan or a mortgage and yet were accepting up to 125% mortgage deals. I would be scared half to death if a mortgage broker had attempted to lend me 125% of the value of my property and I would have told him/her, in no uncertain terms, exactly where he/she could take that offer!
Gold is the only commodity which is currently increasing in value. How brilliant to deplete our stock at the bottom of the market.
I thought that the Gold was sold a long time ago?
Only half the gold went - unless there have been other sales since 1999.
http://news.bbc.co.uk/1/hi/wales/7663339.stm
The above link has to be of concern to the Council Taxpayers of Neath Port Talbot; the highest council tax in Wales just got higher!
Don't give up on recovering the deposits. Negotiations with Iceland have started and Lord Carlile is taking an active interest.
Yet another example of Labour incompetence in Neath Port Talbot. I despair.
We don't know the whole story yet. The date the contracts were taken out and their dates of expiry are critical. There is a full council meeting this week at which these concerns may be aired.
Post a Comment