States of Guernsey Question time Tuesday 29^th July 2009

Questions to the Chief Minister Lyndon Trott re Landsbanki

Deputy DeLisle : I’d like to address the Chief Minister with regard to Landsbanki and the problems the depositors face.

In another breakthrough the Icelandic Government last month agreed a deal to reimburse billions of pounds and Euros lost by British and Dutch savers in Icelandic bank accounts. Indeed the restructuring of its banks, repaying creditors and stabilising its currency were all conditions of the 10 billion Euro rescue package granted to Iceland by the IMF (International Monetary Fund) and European countries last year.

Furthermore Iceland announced on the 20 July a new 1.5 billion Euro recapitalisation of its banking sector and a deal to hand control of two of the country’s healthy new banks to foreign creditors.

Question 1

Is the Chief Minister aware of these recent developments, and in light of them, will he

not renew or work towards for the fullest compensation of all losses endured by depositors in these islands in the failed banks (such as Landsbanki)?

Question 2

But also in the knowledge of these evolving developments will he in co-operation

with the Minister for the Treasury and Resources Department begin an entirely new

initiative to secure the Deposits of Guernsey Investors in Landsbanki, on behalf of the

States of Guernsey?

Bailiff: right, I have considered the questions, I permit them to be posed but I am mindful that in responding to them the Chief Minister to those questions and any supplementaries may need to proceed with some care if we get into any areas that are sensitive as far as the procurer is concerned , no doubt he’ll tell us, Chief Minister.

Deputy Trott: thank you Sir, I am now I am now able to give a joint answer to both deputy DeLisle’s questions. I can assure Deputy de Lisle that I am fully aware of and continue to monitor the recent events in Iceland. I would again emphasise that legal responsibility for the recovery of depositors’ monies in  Landsbanki Guernsey Limited rests with the Court-appointed Joint Administrators. The role of the States is to assist and support the Administrators, where appropriate, in securing as constructive an outcome as possible. That support has been, and continues to be given, to the Joint Administrators in a manner appropriate to maintain a sound basis for confidential dialogue with relevant parties.

Deputy DeLisle: Can I ask a supplemental on that. The Minister in reality did not answer the question, which was, with regard to, yes question two which was with regard to new initiatives which he might put forward, but as a supplementary I would like to make the point that I was quite devastated when I learned……

Bailiff: (interrupts) when you say make the point you were going to ask a question weren’t you?

Deputy DeLisle: I am going to ask a question sir, Further When I learned that emergency legislation had been approved by the Icelandic Government giving the UK preferential status and recovery of up to 89% of monies loaned, while Landsbanki Guernsey was treated as an ordinary creditor………..

Bailiff: (interrupts) This isn’t a time for speeches , so the question is?

Deputy DeLisle: The question is Sir, That this was done despite the HMG……

Bailiff: (interrupts) Sorry, the question is? The members may be pretty familiar with the background I think they probably follow it, just as you did and that’s a compliment to them, lets get to the question.

Deputy DeLisle: its good of you to explain that sir, but will the Chief Minister rectify this discriminatory practice sir with the UK Treasury and other parties to represent Guernsey’s interests.

Deputy Trott: On that question discussions on ongoing as I outlined in the previous answer, but to answer more specifically deputy DeLisle’s second question where he asked, if an entirely new initiative should be undertake, I believe we are doing all we can without the involvement of substantial sums of taxpayers money, which I assume is the new initiative to which Deputy DeLisle refers.

Deputy Graham Guille: (It is believed this was a prearranged question to allow the CM to reply in a prepared speech) There have been a number of quite worrying accusations or allegations that the policy Council has not been doing everything possible to assist the people in this situation, would the Chief Minister like to comment please.

Trott : Sir I anticipated a question of this nature, um and have prepared accordingly, perhaps, perhaps it would be helpful to reiterate the points consistently since Landsbanki Guernsey went into administration. The policy Council have never walked away from doing what it can to respond to the call from the Landsbanki Depositors, but the route it is able to take is clearly marked out by boundaries on either side, boundaries formed quite properly by the decisions of the Royal Court to appoint an Administrator on the one hand and the statuary role of the Guernsey Financial Services Commission on the other. It has been and continues to be the States roll to assist these bodies, not usurp them. Furthermore by way of such assistance, the Policy Council has engaged with the appropriate UK Government departments, notably Her majesty’s Treasury and as has been explained on a number of occasions, it has engaged with members of the Icelandic Government. What it has not done Sir and what it is not prepared to recommend is the commitment of significant sums of taxpayers money to this cause. The second point I wish to make is that while the Landsbanki Guernsey Action Group are well organised, well meaning and sharply focused on the interests of their members, I.m increasingly receiving the message that they are losing public empathy. At the outset the group signalled that they were not interested in the Guernsey taxpayer funding any potential shortfall, but latterly public funding has become their target and this coupled with many of their actions and utterances have served to frustrate rather than further the very real efforts that are being made to assist them. In this respect States members will be aware from correspondence they will have received from the Landsbanki Action Group over the last 24 hours that the group has received a response from the Ministry of Justice in respect of a freedom of information request. Members will note from the Ministry’s response, that it underlines the fact that from time to time there are good reasons why certain information cannot be disclosed, and I quote Sir, “There are public interest arguments against disclosure of this information at this time, without the space and freedom to discuss sensitive issues and exchange views on this matter with other Government departments, policy officials would not be able to brief UK Ministers effectively, nor respond accurately to correspondence from effected depositors. It is the ability to maintain a sound basis for confidential dialogue on sensitive issues that is essential to the success of intergovernmental discussion”, and I believe that the interest of the depositors would be frustrated if such discussions were jeopardised by disclosure at this time. Now sir as regards meetings with her Majesties Treasury, shortly after you opened the meeting this morning, information came through to my Blackberry which I’m sure would be of assistance to the assembly (Laughter) and that was Sir, that there were physical meetings with her Majesty’s Treasury, Physical meetings on the 24^th October 2008, 4^th February 2009, 3^rd March 2009, 21^st May 2009,  to name but four, in between Sir, there were numerous conference calls with HM Treasury, and finally sir, finally that leaves me to advise the assembly, that next week, in the company of senior officials, I shall be travelling to Iceland to meet with representatives of the Icelandic Government for the very purpose of exploring the matters of interest further and Sir it is against that background that I do not propose to answer any further supplementary questions at this time.

Bailiff: So we now move on then, (Deputy Brehaut intimates a supplemental question) You can ask supplementries  but the Minister is not obliged so I can’t compel him to answer them so.

Deputy Brehaut: The Chief Minister has pre-empted any supplementals, which is an unusual move.

Bailiff: But he’s entitled to say, I’m not going to answer , I can’t answer it , that’s a matter of political judgement. Having said he’s not going to answer any further supplementals, if you pose them, I turn to him and he says I told you I’m not going to answer any further supplementaries , that’s a matter of Political judgement on his part. May frustrate you Deputy Brehaut, but that’s a fact.

Deputy Brehaut: (Amid laughter) No one knows frustration better than me

Bailiff: I think also and what I glean from it and I’m sure members do, is that the Chief minister is going to go to Iceland, what we need to know, is not what he might speculate now, but what results from that meeting, and perhaps he’ll communicate it to States Members or in some other way, if it is appropriate, it may there are matters confidential, those he can’t communicate but there will be opportunity no doubt and perhaps people will anticipating it already, to look forward to September

Deputy Barry Brehaut: With that in mind it’s a very simple question. On the radio this morning one of the Landsbanki depositors said that there had been discussions with the Treasury and the Ministry of Justice, I believe, can we just distinguish between, a meeting with the Treasury and what was discussed, are we say that at these meetings, physical meetings with the Treasury, Landsbanki and the depositor situation was discussed explicitly.

Bailiff: I think that was the inference of what the Minister was saying, in saying that there had been meetings with the Treasury and we’re dealing with the subject of Landsbanki rather than him just saying there were meetings on other matters irrelevant to Landsbanki.

Lyndon Trott: There is no need for me to respond, Sir, because you have responded on my behalf adequately,

Bailiff: which was most appropriate, as you weren’t going to respond.