| Previous Section | Index | Home Page |
17 Nov 2008 : Column 156W—continued
Bank Services
Mr. Austin Mitchell: To ask the Chancellor of the Exchequer (1) what estimate he has made of the sums of money (a) frozen and (b) otherwise unavailable to depositors held in (i) Kaupthing, Singer and Friedlander Ltd, (ii) Kaupthing, Singer and Friedlander (Isle of Man) and (iii) Landsbanki; [233581]
(2) what estimate he has made of the number of accounts in Icelandic banks which have been (a) frozen and (b) otherwise rendered inaccessible as a result of the operation of the Landsbanki Freezing Order 2008; and what estimate he has made of the sums involved; [233582]
(3) how many assets owned by Icelandic proprietors have been frozen under the terms of the Landsbanki Freezing Order 2008 and related Ministerial decisions; and which Minister in his Department is responsible for matters relating to Icelandic banks in the UK; [233584]
(4) what the reason was for the time taken to issue his Department's financial sanctions notice of 17 October 2008 on the Landsbanki Freezing Order 2008 following the issue of the initial notice on 8 October 2008; and for what reason it was necessary to clarify that only the funds of Landsbanki were the subject of the Order; [233585]
(5) what steps he took to ensure that imports of fish from Iceland could be paid for by bank transfer after 17 October 2008; what steps his Department took to ensure that the contents of the statement of that date on Icelandic banks were communicated to bank branches and other financial institutions handling payments for fish imports; and what steps he took (a) before and (b) after 17 October 2008 to ensure that banks remitted payment for fish imports to Icelandic banks; [233586]
(6) when he was made aware that UK banks were prohibited from transferring money to Iceland in payment for imports of Icelandic fish; what steps he took in consequence; and if he will make a statement; [233754]
(7) what (a) warnings were given to the government of Iceland and (b) consultations he had with the government of Iceland before the freezing of Icelandic bank accounts under the Landsbanki Freezing Order 2008; and what prior notice he gave of his intention to make the order; [233759]
(8) for what reason he took action against the assets of Landsbanki Bank using powers under the Anti-Terrorism, Crime and Security Act 2001. [231629]
Ian Pearson: On 8 October HM Government made the Landsbanki Freezing Order 2008. This requires all persons in the UK (and UK persons elsewhere) to freeze funds owned, held or controlled by Landsbanki, including those owned held or controlled in relation to Landsbanki by certain Icelandic Authorities or the Government of Iceland. The Order was made because the Icelandic Government, its authorities and Landsbanki appeared to be on the brink of action which would be to the detriment of the UK economy, including detrimental treatment of UK depositors.
The effect of the Order is that all funds owned, held or controlled by Landsbanki in the UK are frozen. Landsbanki funds may only be released from frozen accounts in the UK under the authority of a licence granted by HMT. No freezing orders have been made in respect of other Icelandic banks.
The Order was made under a power contained in the Anti-Terrorism, Crime and Security Act 2001. This Act includes a broad range of provisions and is not only about countering terrorism. The power enables the Treasury to make a freezing order where the Treasury reasonably believe that action to the detriment of the UK economy (or part of it) has been or is likely to be taken by a foreign government or resident of a foreign country or territory. As we have made clear the UK's action was not taken on the basis of the anti-terrorism provisions in the Act.
As envisaged by the 2001 Act, the Landsbanki Freezing Order also gives the Treasury power to licence exceptions to the freeze. Granting licences is an integral part of the Treasury's ongoing role in relation to the freezing order,
in particular, in minimising potential harmful consequences, while providing the necessary safeguards.
The Treasury's approach has been to publish general licences and guidance to deal with industry concerns. A general licence was granted on 9 October. This dealt with the concern of allowing the London branch of Landsbanki to continue its commercial finance operations, on which a number of UK businesses depend for their immediate cash flow. This licence also confirmed a broad range of transactions that were permitted, including that third parties could set-off and net out arrangements where Landsbanki was the counterparty. A further licence was granted on 13 October, to provide reassurance to a wide range of market participants who might otherwise be in a position of dealing with frozen funds.
In response to inquiries received, the Treasury published a series of notices to ensure the scope of the Freezing Order was clear to UK financial institutions. The notice published on 17 October provided detailed guidance and reiterated that other Icelandic banks and companies were not affected by the Freezing Order. It was published on the Treasury's website and was also sent to financial institutions in the UK via the financial sanctions e-mail notification service.
In response to a request from certain financial institutions, the Treasury granted a licence on 7 November in relation to securities settlement through exchanges where there is no central counterparty.
In addition, the Treasury liaised with the major UK banks to ensure that the freezing order was not preventing payments to Icelandic companies; discussed individual transactions with banks that advised transactions had been blocked because of the Order; and made clear that the Order does not prohibit UK banks from transferring money to Iceland in payment for imports of Icelandic fish (as long as they are not unlicensed “frozen funds”).
The Chancellor announced the Order was being made in his statement to the House on the morning of 8 October. As is generally the case in relation to asset freezes, prior notice was not given to the persons designated under the Order, so as not to prompt asset flight.
Mr. Austin Mitchell: To ask the Chancellor of the Exchequer what the basis was for his statement of 8 October 2008 that the Icelandic government had no intention of paying compensation to UK investors in Icelandic bank accounts. [233630]
Ian Pearson: I refer my hon. Friend to the comments the Chancellor of the Exchequer made at the Treasury Select Committee hearing in response to the hon. Member for Sevenoaks (Mr. Fallon’s) question (Q116) on 3 November.
Peter Bottomley: To ask Mr Chancellor of the Exchequer what recent representations he has received on the situation of UK depositors in (a) the Isle of Man and (b) the Channel Island branches of Kaupthing Bank; what protection applies to deposits in such financial institutions made by British citizens resident (i) in and (ii) outside the UK; and if he will make a statement. [233753]
Ian Pearson: In line with usual constitutional arrangements, the UK Government will represent the Crown Dependencies in their negotiations with Iceland.
However, arrangements for depositors in banks in the Isle of Man remain a matter for the Government of the Isle of Man. Deposits with Kaupthing Singer and Friedlander, Isle of Man, will be subject to the Isle of Man Deposit Compensation Scheme.
Arrangements for depositors in banks in the Channel Islands are a matter for the Government of the Channel Islands.
The Financial Services Compensation Scheme would pay compensation to eligible claimants up to the limit of £50,000 per person per authorised institution in the UK. The Financial Services Compensation Scheme does not cover deposits with banks outside the UK other than deposits with branches of UK banks established in other EEA states under EEA rights. Other deposits, including those made by UK residents or by British citizens resident outside the UK would be covered by any locally operated deposit-guarantee schemes.
Treasury Ministers and officials have meetings and discussions with a wide variety of organisations in the public and private sectors as part of the process of policy development and delivery. As was the case with previous Administrations, it is not the Government’s practice to provide details of all such meetings and discussions.
Bank Services: Iceland
Annette Brooke: To ask the Chancellor of the Exchequer what recent steps he has taken to assist those with money deposited in Icelandic banks. [234969]
Ian Pearson: I refer the hon. Member to the statement made by the Chancellor on 8 October 2008, Official Report, columns 279-80.
Mr. Ancram: To ask the Chancellor of the Exchequer what discussions were held with the Icelandic government before freezing the assets of Icelandic banks and businesses. [235174]
Ian Pearson: On 8 October HM Government made the Landsbanki Freezing Order 2008. The effect of the Order is that all funds owned, held or controlled by Landsbanki in the UK are frozen. Landsbanki funds may only be released from frozen accounts in the UK under the authority of a licence granted by HMT. No freezing orders have been made in respect of other Icelandic banks.
Treasury Ministers and officials have meetings and discussions with a wide variety of organisations in the public and private sectors as part of the process of policy development and delivery. As was the case with previous Administrations, it is not the Government’s practice to provide details of all such meetings and discussions.
Bank Services: Local Government
Mr. Burstow: To ask the Chancellor of the Exchequer if he will make it his policy to extend to local authorities the same level of assurances regarding funds deposited with Landsbanki as those offered to individual savers. [232569]
Ian Pearson: I refer the hon. Gentleman to the statement made by the Secretary of State for Communities and Local Government on 14 October 2008, Official Report, column 35WS.
Bank Services: Rural Areas
Mr. Heald: To ask the Chancellor of the Exchequer if he will make it his policy to encourage banks to share facilities in rural areas. [235602]
Ian Pearson: The Government have no plans to make shared banking facilities in rural areas a matter of policy.
Bank Services: Standards
Mr. Amess: To ask the Chancellor of the Exchequer what discussions his predecessor had with the US Administration between 1997 and 2001 on the effects on the United Kingdom economy of banks in the United States lowering their lending standards; and if he will make a statement. [229514]
Ian Pearson: Treasury Ministers and officials have meetings with a wide variety of organisations and international partners. As was the case with previous Administrations, it is not the Government’s practice to provide details of all such meetings.
Banking Supervision
Mr. Dai Davies: To ask the Chancellor of the Exchequer if he will direct his appointees as non-executive directors on the boards of banks in receipt of recapitalisation from the public purse to establish lending rules which prohibit the provision of sub-prime mortgages; and if he will instruct the Financial Services Authority to oversee implementation of this instruction. [227924]
Ian Pearson: As part of its investment, the Government have agreed a range of commitments with banks accessing the recapitalisation scheme. The Government expect boards to appoint new independent non-executive directors, in consultation with Government.
These banks are committed to offering a wide range of products at competitive rates, which will be made available to customers with good credit ratings. Decisions on the terms and pricing of specific products are commercial decisions for the individual institutions.
It is important that all lenders lend responsibly and fulfil their regulatory obligations. Since 2004, the Financial Services Authority has held responsibility for the regulation of first charge residential mortgages, helping to ensure that lenders lend responsibly and borrowers are afforded appropriate protections.
Banks: EC Law
Ann Winterton: To ask the Chancellor of the Exchequer what assessment he has made of the effect of Commission Regulation (EC) No. 1004/2008 of 15 October 2008 on levels of equity and liquidity of British banks. [233563]
Ian Pearson:
Commission Regulation (EC) No. 1004/2008 of 15 October 2008 adopts the amendments to International
Accounting Standard 39 and International Financial Reporting Standard (IFRS) 7 made by the International Accounting Standards Board. The purpose of these amendments was to align the treatment on valuation and classification of certain financial instruments between IFRS and US Generally Accepted Accounting Principles (GAAP). UK banks will be required to utilise the amended standards in preparing their accounts, which will in turn be subject to audit scrutiny.
Banks: Iceland
Mr. Dunne: To ask the Chancellor of the Exchequer if he will make provision for British citizens living overseas who are unable to access their deposits in subsidiaries of Icelandic banks following the Government’s decision to freeze the assets of Landsbanki bank. [229869]
Ian Pearson: On 8 October HM Government made the Landsbanki Freezing Order 2008. This requires all persons in the UK (and UK persons elsewhere) to freeze funds owned, held or controlled by Landsbanki, including those owned held or controlled in relation to Landsbanki by certain Icelandic Authorities or the Government of Iceland. The Order was made because the Icelandic Government, its authorities and Landsbanki appeared to be on the brink of action which would be to the detriment of the UK economy, including detrimental treatment of UK depositors.
The Financial Services Compensation Scheme does not cover deposits with banks outside the UK other than deposits with branches of UK banks established in other EEA states under EEA rights. Other deposits, including those made by UK residents or by British citizens resident outside the UK would be covered by any locally operated deposit-guarantee schemes.
Banks: Public Appointments
Mr. Gordon Prentice: To ask the Chancellor of the Exchequer whether the experience and qualities sought in Government directors of UK banks where the Government has a shareholding will include time spent working in a mutual. [227517]
Mr. Dai Davies: To ask the Chancellor of the Exchequer (1) whether he has considered placing a Minister or departmental representative on the board of directors of those banks in receipt of public funds and support; [226914]
(2) if he will consider appointing as non-executive directors to the boards of banks in receipt of public funds for recapitalisation representatives from (a) the Bankworkers’ Trade Union and (b) the third sector. [228371]
Ian Pearson:
As part of the recapitalisation scheme, it is intended that new non-executive directors will be appointed to the boards of each of RBS and, provided it proceeds, the merged Lloyds TSB/HBOS. These will be independent non-executive directors appointed by the board of each bank. UK Financial Investments, the company which will manage the Treasury’s shareholding, will work with those boards to ensure the individuals have appropriate commercial experience. The purpose behind their appointment is to strengthen the board of
each bank and to provide independent oversight in respect of governance and other matters in the interests of all the shareholders of each bank.
Child Benefit
Mr. Heathcoat-Amory: To ask the Chancellor of the Exchequer what checks his Department makes to establish the accuracy of information provided by nationals of EU member states on applications forms for child benefit; and if he will make a statement. [235586]
Mr. Timms: I refer the right hon. Member to the answers given to him on 26 November 2007 and 19 March 2008, Official Report, columns 48W and 1217W respectively.
Child Trust Fund
Bill Wiggin: To ask the Chancellor of the Exchequer what percentage of Child Trust Fund accounts had a lower monetary value than the day upon which they were opened on the latest date for which figures are available. [235560]
Ian Pearson: The information requested is available only at disproportionate cost.
| Next Section | Index | Home Page |