The annual UK political party conference merry-go-round culminated today with Prime Minister Gordon Brown’s keynote speech – seen by many as his final chance to impress a disillusioned voting public ahead of next year’s election – in which he attempted to gain political kudos by incorrectly claiming the “rescue” of Iceland-based IceSave, following the collapse of parent company Landsbanki in October last year.
Describing how a UK-based IceSave customer had written to him saying that his decision to rescue IceSave and guarantee her savings had led to the “first night’s sleep she’d had since the crisis started”, Brown also overlooked the argument held by many – that the UK Government was directly responsible for the severity of Iceland’s predicament through their use of anti-terrorist laws in freezing Icelandic banking assets in the UK. The Anti-terrorism, Crime and Security Act 2001, or the historic equivalent, has only been used against two other countries before: Rhodesia after declaring independence in the 1960s and Argentina during the Falklands War.
The Prime Minister’s statement was factually incorrect: the Government did guarantee the savings of UK-based account holders but IceSave was not rescued by Britain. Geir Harrde, then Iceland’s Prime Minister, detailed how he viewed the situation on November 18th 2008, a version somewhat different to the rescue now claimed by Gordon Brown:
“When the bulk of our banking system collapsed in the space of a few days in October and the British placed a fellow NATO member on a list together with the most notorious terrorists on the planet – a list that included not only Landsbanki but also the Republic of Iceland – it was no wonder that foreign exchange activity between Iceland and other nations should be utterly paralysed.”
IceSave officially closed in late 2008 and compensation claims for lost funds had to be submitted to the Financial Services Compensation Scheme (FSCS) by December 30th 2008.
Somewhat ironically, Brown began his speech by claiming “we have changed the world before and we are going to do it again”. Brown was Chancellor of the Exchequer for a decade before becoming Prime Minister in 2007, a year before the worst financial crisis in a generation paralysed the world’s money markets and decimated pension funds and markets across Europe, irrevocably changing the global financial climate.
It is expected that Labour will lose next year’s election to David Cameroon’s Conservative party, following a year of poor approval ratings and numerous disasters for Brown’s Labour. The Liberal Democrats, traditionally the country’s third party, are expected to make major gains against Labour in the election, due to be held sometime in the summer of 2010.