DEPOSITORS with cash in Iceland's closed internet bank are to get a quick pay-out after "significant progress" was made last night in talks between the Icelandic authorities and the Treasury.
It emerged that arrangements have been agreed "in principle" for a speedy return of money to customers of Landsbanki's Icesave. Details are expected to be worked out over the next few days.
The deal could be similar to one reached with the Dutch
government in which the Icelandic government will compensate each Dutch depositor up to a maximum of £16,697. The government of the Netherlands is offering a loan to Iceland to make that possible.
British investors have roughly £4bn in the Icelandic bank. Although Chancellor Alistair Darling had promised to compensate investors in full, the first £16,000 of a deposit is meant to be guaranteed by the Icelandic authorities. It is understood Iceland has now agreed in principle to honour this commitment.
The UK Government is also pressing for the quick return of almost £1bn of funds invested by councils and other public bodies, including charities.
Scottish councils invested £45m and Strathclyde Fire & Rescue Board deposited £3m.
The Scottish councils' financial struggle has been exacerbated by suggestions the SNP's flagship three-year council tax freeze is under threat, with local authorities claiming they do not have enough money to implement it. Ministers gave Scottish councils an extra £70m last year to freeze council tax rates across the country and agreed a three-year funding package designed to keep rates frozen for the next two years.
However, it emerged yesterday that councils want an extra £70m for next year and to renegotiate the funding settlement to secure that extra money. They have warned that the council tax freeze will not go ahead next year without the extra money. Jim Murphy, the Scottish Secretary, has invited John Swinney to a meeting in Edinburgh to discuss the situation.
The full article contains 326 words and appears in Scotland On Sunday newspaper.
