Icelandic investment misgivings (Wokingham Liberal Democrats)

Wokingham Liberal Democrats <info@wokinghamlibdems.org.uk>

Icelandic investment misgivings

July 26, 2010 12:00 PM

At last Thursday's Council meeting, Wokingham Liberal Democrats were astonished by the Conservative-led administration's over-optimism in recouping the £5 million of council tax payer's money it invested in the collapsed Icelandic banks. The Executive Member for Council Budgets, Anthony Pollock, confidently predicted that the Council expected to recover nearly all the £5 million investment.

Cllr Prue Bray, the leader of the Liberal Democrats on Wokingham Borough Council, said: 'The Liberal Democrats believe the Conservatives are being over-optimistic given that the court case has not yet taken place in Iceland. At the very least £750,000 of the original £5 million investment has been lost. Council tax payers have the right to know what has happened to their money, and the Conservative administration has a duty to be frank with them.'

'The Council has suggested that eventually payments from Heritable will amount to as much as 85p in the pound. The latest estimates I have seen from the Local Government Association suggest this to be a bit less - 65p to 78p in the pound. Let's hope the Executive Member for Council Budget's optimism is borne out by events.

'David Lee, the Leader of the Council, previously said that the Council's priorities would not be affected if the money it had invested in Iceland was lost. The Council is about to embark upon cuts to services as a result of the current financial situation. These would not have had to be anything like so deep had all the Icelandic money been available.'

BACKGROUND NOTES:

Wokingham Borough Council had invested £3 million in Heritable Bank, with the remaining £2 million invested in Landsbanki. Although Heritable has begun to pay back money to the Council, the total the Council will get back is not yet clear. The court case to decide whether councils are priority creditors of Landsbanki will not take place until September. It will be the outcome of that court case which will govern how much Wokingham Borough Council gets back of the £2 million it invested in Landsbanki.

The quote from David Lee is from an article in The Wokingham Times, dated 22 October 2008, which can be found at: http://www.getwokingham.co.uk/news/s/2037816_tough_choices_if_iceland_cash_lost