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Landsbanki Freezing Order 2008

My Lords, I take the noble Baroness’s point, but it would be a luxury to redraft the Act in order to give Parliament powers that it clearly already has and is entitled to use. It is not only entirely lawful for these powers to be used in this way but entirely just. The Icelandic Government—so far as I understand, this is still their position—have totally guaranteed the deposits made in Icelandic branches but have not extended that guarantee to any deposits made outside Iceland. That must breach the European Union rule in this regard, in that it unlawfully discriminates against those who are outside that country’s shores. Many questions remain to be answered. The Statement made by the Chancellor of the Exchequer on 8 October was to the effect that these freezing orders would be made for the purpose of safeguarding the position in Britain of funds belonging to Landsbanki until such time as the position with regard to United Kingdom creditors was made clearer—I think that those were the exact words. What happens then? If the Icelandic Government say, ““The guarantee that we have given to our own people will be extended to everyone””, then fair enough; there will be no problem. If they do not give that guarantee, what then happens to these funds? Will they be sequestered? If so, will they be there for division among United Kingdom charities and local authorities? I am conscious that my own county, Cardiganshire, has £5.5 million deposited in this way. What sort of dividend can be expected? On 13 October, the Chancellor of the Exchequer announced that £100 million would be made available to Landsbanki in order to assist it in its difficulties. Were any counterundertakings given by Landsbanki in that regard and, if so, what were they? There must be something in the nature of a contract here. Local authorities, such as my own county council in Cardiganshire, were exhorted time and again by the Treasury to try to gain the highest possible interest from their deposits; indeed, from time to time there was some element of threat. The Treasury may or may not be liable for negligent statements in that connection, although the fact of a crash would not make it negligent. Who could have foreseen a year ago exactly what was going to happen? Beyond that, the Treasury does not seem to have given a clear picture of any fine-toothed-comb examination of the condition of Icelandic banks, balancing assets against liabilities and all sorts of eventual possibilities. The question remains: is there any possibility of a legal responsibility—or, if not that, a moral responsibility—regarding the Treasury’s relationship with charities and local authorities? It is clear that, some months before the crash occurred, there were signals. Did the Treasury then communicate with those on whom it had lent earlier to say, ““Look, the situation has now changed. You are now sailing into danger””? I would welcome a reply to those questions.