The Government is facing calls for an investigation following claims that the UK authorities knew as long ago as April that the Icelandic banking system was in trouble – six months before its collapse.

Channel 4 News has reported that the Icelandic Central Bank approached the Bank of England in March for assistance to support its currency as confidence in its heavily-indebted banking began to ebb away.

The following month the Bank of England Governor Mervyn King was said to have asked the International Monetary Fund for an assessment as well as commissioning studies of Iceland’s banks and its economy.

According to the programme, Mr King turned down the Icelandic request for help telling the Icelandic Central Bank that the country’s banking system was “far too large”.

The subject was also said to have been raised by Icelandic Prime Minister Geir Haarde when he met Gordon Brown in Downing Street on April 25. Mr Brown was said to have advised him to ask the IMF for assistance. In all, the programme said that the Icelandic Central Bank approached seven European central banks for assistance, with just three Nordic banks offering support.

On September 2, the Icelandic trade minister and the head of the Icelandic financial regulator were said to have asked Chancellor Alistair Darling whether the British operations of the Landbanksi bank could be turned into a UK subsidiary. That would have meant that they would be covered by the UK deposit protection scheme, but no agreement was reached.

Just over a month later Iceland’s banks dramatically collapsed. While the Government said that it would guarantee the deposits of private savers, dozens of charities, councils and other public bodies have been left not knowing whether they will get their money back.

Liberal Democrat treasury Vince Cable said that the Government now needed to explain exactly what it knew about the extent of the problems in the Icelandic banking system.

“What was so striking (was that) the Governor of the Bank of England had judged that the Icelandic banks were in such dangerous and volatile condition that it would be difficult to save them and yet the authorities ignored all of this information and as a result billions of pounds of local government authority, police, and charities money has been lost,” he told the programme. There is a need for an investigation and at the very least a proper statement of exactly what the British Government was told, when they were told and what they did.”

The Treasury defended its actions. A spokesman said: “We are clear that we took the appropriate action to protect depositors and we continue to discuss the matter with the Icelandic authorities.”

Yesterday’s Daily Telegraph brings news that even a GCHQ security expert doubts the supposed benefits of ID cards:“Speaking at an IT security conference in Wales, he rubbished ministers’ claims that the multi-billion pound scheme would enhance national security … Mr Mattinson is not the first figure from Britain’s intelligence community to reject Government claims for ID cards. Dame Stella Rimington, the former head of MI5 has also questioned their value in fighting terrorism.”

You can read the full story at: http://tr.im/o9q

This story shows, there is a really strong case against ID cards – but we do need to keep on making it. So please also pass this story on to friends or colleagues, and encourage them to sign our petition at http://www.libdems.org.uk/noidcards/

Commenting on today’s speech by George Osborne on the economy, Liberal Democrat Shadow Chancellor, Vince Cable said: “George Osborne is clearly way out of his depth.”

“His arguments on how to get us out of recession are entirely incoherent. He argues against continuing Government spending on the basis that it will push up borrowing, then announces un-funded tax cuts which would do just that.
 
“Throughout the economic crisis George Osborne has consistently shown poor judgement, from opposing the nationalisation of Northern Rock, to advocating continued short selling and supporting further deregulation of the City.

“After weeks of waiting for the Tories to give a hint of their economic proposals, this speech is a damp squib. We have heard nothing from them which would help the millions of families struggling to make ends meet.

“We must cut taxes for those on low and middle incomes, funded by closing tax loopholes exploited by the wealthy.

“Binding rules must be placed on banks to only ever repossess someone’s home as a last resort.

“And we must ensure that energy companies pass on falling energy prices to struggling customers.”

Commenting on the news that Barclays have announced a proposal to raise up to £7.3bn from Arab investment in order to strengthen its balance sheet, Liberal Democrat Shadow Chancellor Vince Cable said: “This is a scandal of mammoth proportions. Here is a bank which relies on the taxpayer to bail it out if the going gets rough but which has offered Middle Eastern investors a much better deal than the banks are offering to the British tax payer.”

“Sheikh Mansour and the Qatari Group are being offered convertible bonds at very attractive interest rates with an opportunity to convert into shares when things improve.

“We have to ask why Barclays is willing to offer a better deal to foreign investors than the British taxpayer. The answer is simple: they don’t want the British Government stopping them from paying massive bonuses to their executives. More than the other banks, Barclays operate a high-risk casino operation which makes the bank particularly unstable but which gives very rich pickings to the top executives. 

“The British Government must not simply let this pass. I have absolutely no objection to Arab investment in the British economy but this deal smells to high heaven.

“The Government should seriously be considering making it clear to Barclays shareholders that if they accept this deal, the bank will forfeit any future entitlement to protection from the tax payer. 

“And this deal also raises the wider question as to whether the banks, which are licensed to take deposits from the public, should be allowed to continue very high risk gambling operations which have brought the financial system to the brink of disaster and which Barclays is at the very heart of.”

Britain will suffer an epidemic of mental distress as a consequence of the recession Britain will suffer an epidemic of mental distress as a consequence of the recession hitting families, Liberal Democrat Leader, Nick Clegg will say today.

Speaking to a conference at the University of Sheffield, Nick Clegg will call for action to combat the ‘hidden tragedy’ of the recession, by reducing the impact of the financial crisis on people’s mental health.

Nick Clegg will put forward proposals to help families affected by the mental ill health associated with rising levels of unemployment, repossessions and personal debt. Mental ill health can make it harder for people to manage their money and some conditions are closely associated with compulsive spending that can cause serious financial problems.

Measures include:

·    Debt counsellors to be trained to identify people with mental health problems and therapists to be trained in spotting debt problems and knowing where to direct patients for appropriate financial advice
·    A maximum waiting time of 13 weeks for mental health patients to see a therapist
·    Allowing individuals to ‘freeze’ their own credit rating so no new loans or credit could be given to an individual
·    Banks should put procedures in place to help customers who have disclosed their mental health problems including allowing for accounts to be voluntarily monitored for unusual spending and for a system of joint authorisation from a friend or support worker

Nick Clegg will say:

“It is the hidden tragedy of a recession that mental illness will surge as people’s jobs and homes are increasingly under threat.

“Every eleven minutes, another family will face the severe anxiety and mental strain of having their home repossessed.

“People shouldn’t have to face these difficult times on their own. Those professionals advising people in financial trouble need to be trained to spot signs of mental health problems and be aware of where people can get help.

“If people know that their mental health means they are more likely to go on spending binges, why shouldn’t they have the right to voluntarily add extra controls on their account and credit ratings?

“At a time when the limited mental health services available on the NHS are already under immense strain, ministers must prepare now for this profound consequence of the recession.”

Norman Lamb branded the sharp rise in hospital readmissions as a “false economy” in the health service. Figures highlighted by the Liberal Democrats show that emergency readmissions for patients aged 16 and over have risen by almost a fifth since 2003.

Norman Lamb blamed the culture of targets saying: “the Government’s push to achieve its waiting time targets, coupled with overcrowding in hospitals, risks compromising patients’ safety.”

The figures, revealed in answer to a Parliamentary Question, showed that:

• One in seven elderly patients (14%) were readmitted as an emergency case within 28 days of discharge from hospital in 2006-07
• Since 2003, the proportion of emergency readmissions has risen by almost one fifth (19%) for patients aged 16 and over
• The proportion of emergency readmissions for patients under 16 has risen by 10%

You can read the Parliamentary answer here.

Norman Lamb, Liberal Democrat Shadow Health Secretary, went on to say:

“These figures show what can happen when targets get in the way of clinical priorities. Doctors are being put under huge pressure to cut the length of time that people stay in hospital to meet top-down targets.

“It is a false economy and poor practice to send people home too soon, only to have them readmitted days later.”

The rail regulator has cancelled 19 schemes to remove pinch points on overcrowded railway lines yesterday after the Government ordered a cut in public funding for the railways.

Network Rail proposed the schemes to increase capacity and to reduce delays on routes that have experienced record growth in passenger numbers. The Government has now imposed a strict cap on the expansion of the network, in an effort to save about £1.5 billion a year.

Some of the 19 projects involved reversing cuts made by British Rail in the 1960s, when the use of trains declined because of increased car ownership.

Since the mid 1990s the number of rail journeys has grown by 50 per cent and income from passengers has doubled.

Network Rail argued that the projects, which would have cost £350 million, were necessary not only to cater for future growth but to relieve already overcrowded services.

The Government said that it would provide funds for Network Rail to expand capacity by 22.5 per cent by 2014. Passenger numbers are currently growing at about 7 per cent a year.

This means that rate passenger growth will be double the rate that the Government has planned for, meaning that thousands more people will have to stand on trains each day.

More than a third of pensioners are receiving the wrong benefit payments as a result of mistakes in the system according to the daily Telegraph online.

Government information has been released which is bound to be a major embarrassment.

The figures on fraud and error in the benefit system show that 36.5 per cent of those claiming pension credits – more than a million elderly people have received the iwrong payment.

In 84 per cent of cases, the mistake was caused by official error, rather than the pensioner providing the wrong information or fraud.

As a result, £200 million was overpaid, while elderly people missed out on another £90 million.

Jenny Willott, the Liberal Democrat Shadow Secretary of State for Work and Pensions, said: “Our benefits system is so complex officials can not even administer it properly.

“Pensioners will continue to miss out and be put off claiming unless it can be made to work effectively.

“The Government must end complicated benefits for pensioners and introduce a universal, higher state pension which increases in line with earnings – it’s the only way to deliver a fair deal for all pensioners.“

Figures released by the Department for Work and Pensions show that fraud and error accounted for two per cent of all benefit payments, with £2.6 billion overpayments last year.

Of this, £540 million was estimated to have come from income support and jobseekers’ allowance, including £280 million lost to fraud.

Another £720 million was paid in error in housing benefit, of which £190 million was to fraud

Last night a packed house at the auditorium were treated to a fantasic performance by 150 young dancers from the Respect Dance Academy which is based at Saint Martin’s Hall on the Nunsthorpe Estate  of Grimsby.  These young people may come from one of the most maligned areas of Grimsby, but they are a terrific example to all of us. 

Thanks to some expert help from Liam Reeder and Steve Hill over the last few weeks a group of dancers from our ward, based at Littlecoates Community Centre, were able to take part in Musical Mania, and they too were a great credit to themselves. 

Read what the Grimsby Telegraph had to say about the show at http://tiny.cc/lLF8A 

View the Video clip from the Grimsby Telegraph on this link:  http://tiny.cc/uv1Hy

Dance classes take place at Littlecoates Community Centre, in Saint Michaels Road every Saturday from 2.00 – 4.00pm.  There are places for a few more young people if they want to come and join ready for the next performance.   

I am pleased that today’s Grimsby Evening Telegraph has finally reported on the September meeting of full council as it seems a long time ago, but the Notice of Motion that my Liberal Democrat colleague, Councillor Steve Beasant proposed was reported in the article.