PUBLISHED: 10:35 16 October 2008 | UPDATED: 09:21 12 August 2010
COUNCIL leaders are hoping millions of pounds they invested in crippled Icelandic banks will be recovered. It was feared that Bromley council would lose £5m it invested in buckled Icelandic bank, Heritable, a subsidiary of Landsbanki. But on Tuesday a
COUNCIL leaders are hoping millions of pounds they invested in crippled Icelandic banks will be recovered.
It was feared that Bromley council would lose £5m it invested in buckled Icelandic bank, Heritable, a subsidiary of Landsbanki.
But on Tuesday afternoon, administrators Ernst Young reckoned that its losses and assets were about equal, meaning the council should be able to recoup the millions. At the moment, money invested in Iceland is frozen as authorities seek to reclaim deposits.
Council Leader, Stephen Carr, said: "It appears to be good news. We couldn't have asked for better at this stage. It's early days but it looks positive."
Deputy Chief Executive, Paul Dale, said it was "the best news for a while".
Before the announcement, angry residents had called for the sacking of council executives, fearing council tax rises.
Petts Wood resident, Rob Miles, 65, said: "We should demand the immediate sacking of the chief executive, all directors and deputy directors. All their salaries and bonuses should be used in lieu of the £5m they have lost.
"We'll resist any attempts to claw back the money through council taxes and relish it if they try taking us all to court for their mistakes."
In the same week, the £37billion bank bail-out plan received a lukewarm welcome from MPs who warned of 'tough times' ahead as the economy sinks in to a 'long and deep' recession.
Orpington MP, John Horam said: "If the banks had collapsed it would have been even worse. It was necessary to save the economy
"But people in Bromley will want to know why the government can pull £37 billion from nowhere when Orpington Hospital is facing closure. They'll be puzzled why banks are seen as a crisis and saving lives is not. Bromley Hospital's £101million debt seems tiny in comparison."
Mr Horam said the current situation was overwhelming, adding: "There are financial problems which no-one can really see the size of except to know they're big. It's going to be a tough time."
MP for Beckenham Jacqui Lait also agreed the bail-out was necessary to prevent a depression but said the government was partly responsible for the crisis.
She said: "There was no option but for the government to take a stake in the banks. But the markets could have been stabilised a year ago when Northern Rock collapsed. Instead the government sent out the wrong message by saying 'if you fail, we will stand behind you'."
Asked how long the recession would last, Mrs Lait said: "How long is a piece of string? Nobody knows, but it will be long and deep."