Local BBC news on Saturday interviewed someone from Stourport who questioned what on earth Wyre Forest Council was doing keeping £9 million in an Icelandic bank instead of a good, safe British one. The night before John Paul Campion, the Conservative Wyre Forest District Council leader blamed the Labour Govt for “forcing” them to invest the money in the place with the best interest rates.
Both comments irritated me. The Stourport gentleman clearly didn’t realise that financial globalisation arrived here decades ago. For 300 years the success of British banks and the nation as a whole has been based on investing our money overseas on often risky projects. Anyway, until a few days ago, no depositor with more than £35,000 in the bank was safe in a British bank, either.
Cllr Campion, on the other hand, was trying to pass a buck in the most bizarre way, blaming the government for forcing the council to get advice on the safest banks with the highest interest rates and to deposit the money there. How dare those Labour tykes force Mr Campion to use common sense when handling our money!
His defensiveness suggests a guilty conscience. Perhaps he knows that WFDC has done something they shouldn’t have? For instance, why did Wyre Forest deposit such a large chunk of it’s funds in one place. The government certainly didn’t advise them to do that. Few of the dozens of authorities caught out had a third of their cash in one place, but Wyre Forest did. Of the District Councils involved, Wyre Forest was in the top three losers.
What’s particularly worrying is that the Conservatives of Wyre Forest should have been able to access the best advice. Mark Garnier, the Tory Prospective Parliamentary Candidate is a hedge fund manager – supposedly an expert in spotting and gambling on the failure of businesses such as HBOS and Northern Rock. Admittedly, the council had only three weeks before their deposit accounts matured and didn’t want to lose their interest but rumours circulated about the Icelandic bank’s business model months ago. So, why did nothing filter through to the Conservative councillors?
October 13, 2008 at 2:00 pm
Nice writing. You are on my RSS reader now so I can read more from you down the road.
Allen Taylor
November 15, 2008 at 11:08 pm
Its always facinating when somebody analyses an issue that apparently know nothing about – I had wondered who would be the first to politicise WFDC’s involvement in the Icelandic banking collapse and the prize goes to Neville.
A few points – Firstly WFDC has money in three organisations currently at risk, one in Iceland, and two in the UK regulated by the UK FSA, but with Icelandic owners, so no it wasnt all in one place. Secondly I take personal offence at the sneer that I believe WFDC has acted improperly over this issue. The Council has acted in good faith at all times on the matter. Thirdly, WFDC does not take financial advice from the WF Conservative PPC, and you Nevile would be the first to critise if we did. The Council made the investments that are currently at risk up to a year ago, it was UNABLE to mature the loans at an earlier date, even when the situation worsened. Forthly the Banks that WFDC has money with that is now at risk we very highly rated organisations when the loans were let.
On a more personal note, I have kept all group leaders informed over the issue, including Lib Dem Leader Helen Dyke. It is a shame that you dont take a leaf out of her book, and put the community you purport to want to serve before your political ambition. Even though unelected, you have a duty to act responsibily.
John Campion
November 16, 2008 at 10:21 am
It’s rich of you, John to accuse other people of politicising considering the behaviour of your Shadow Chancellor, George Osborne over the last few days.
In fact, the first person to politicise this situation was the man who, on TV, blamed the Labour government for forcing him to place Wyre Forest’s money in the banks with the highest return. It was those rather evasive comments by you that inspired me to write this. Up until that point, I had supported the council’s actions.
Contrary to your suggestion, I wholly approve of Helen Dyke’s and other opposition councillors’ willingness to support the cabinet out of the mess it is in. I would expect no more of them. Yet, you seem to suggest that your actions are beyond question? Well, according to the advice of your leader, Mr Cameron, it is my responsibility to question the actions of Wyre Forest’s Tory Cabinet, especially as mine is a fair opposition question, rather than a reckless comment destabilising our entire economy as Osborne’s words may well have done.
Anyway, in answer to your points -
1. I would most certainly expect you to use Mark Garnier’s expertise in banking to make decisions. The LGA says councils should use their “nous” over investments and Mark is an expert, so why not use him, for heaven’s sake? I don’t like what Mark did for a living but that doesn’t mean his knowledge should be ignored, especially when advising on the safest place for Wyre Forest Taxpayers’ millions.
2. The fact that you used three banks for the 9 million is well-known, but the fact that all three are based in a country the size of Bristol is as near as damn it putting all your eggs in one basket. Banking failures in small towns are like dominoes. The same could even happen in London or New York, so Reykjavik is a pushoever. When I asked another council leader what he thought of a council putting over one third of its reserves in three Icelandic banks, he called it “unconscionable”.
3.Your letter is creative with the truth.
Only some of the money was deposited when the banks were still triple-A rated, but you know full well that the larger proportion was deposited in Icelandic banks months after they had been down-graded. Don’t we have the right to ask why?
Again, I’m aware that all group leaders have been kept informed over the issue since the crisis but the closed nature of the cabinet system imposed on you by Tony Blair means they would have no knowledge beforehand, so if you’re trying to pass the buck, try again.
I am also aware that you couldn’t have removed the funds before the end of October without losing large sums in interest but I don’t question that. In fact, you might note that my comments defend councils’ who invest money wisely overseas. I make no claim of impropriety on your behalf as the problem may, instead, lie with one or more of your officers. But if that is the case, what scrutiny have you put in place to ensure that no one person has decision-making powers over such large sums?
Many of the public criticisms against the council’s actions have been unfair. Of course, you hold large sums of money at particular times and so you should. Of course, you should find the safest place to keep it with a high interest rate. Of course, you are not to blame for Iceland’s collapse.
However, do not believe for one moment that this matter should pass without question and, in the light of the current situation, I suggest you are more careful about who you call irresponsible.
Neville Farmer
November 16, 2008 at 10:51 am
I think you will find if you listen to what I said on TV was that we were required by Govt to make the most of our local resources, and now there was a problem, we needed their help to sort it out, including Internation diplomatic pressure on Iceland. The problem rests with the fact that we have been described as an informed investor. I fail to see the difference between the Councils investments and Joe Blogs investments.
You do do not seem to be able to understand that TWO OF THE BANKS THAT THE COUNCIL HAS MONEY WITH ARE UK BANKS! They are not in Iceland.
I do not wish to pass the buck, I, and the Administration are responsible for our actiions, as is the Council when it votes on our recommendations. Coucnillors set strategic policy and that policy has obviously failed. I am the Leader of the Council and the burden rests with me, and I do not shirk it.
The Council sets a Treasury Management Policy annually (its on WFDC website), that sets out for our officers the risks we want to take, and the sums we wish to put at risk. I have started a review exercise which the Leader of the Opposition will lead (with all groups involved) and its findings will be reported back in public.
You are ill-advised about getting the money back early- I am advised that we could not get the principle back earlier, with or without the interest.
I have a massive amount of time for our local LiB Dem Cllrs, they make a positive contribution to the local community. You on the other hand seem to bring an negative approach. Its easy to say what others are doing wrong, but its far harder to pick up a hammer and help fix the roof. Politics in WF isnt Westminster, and long may is continue. The political colours we wear, to me, are only important at election time, the rest of the year we do have to work together.
John
November 16, 2008 at 5:07 pm
Dear John,
Read again and I think you’ll find that I agreed you could not have retrieved the money earlier and also that I make no criticism of you or anyone else on this point.
However, you seem to evade the real criticisms and then suggest that because I made any, at all, I am merely being negative.
In fact, I have defended the council’s position on this matter to many people who have put forward spurious arguments against your investment decisions.
That said, your failure to see the difference between Joe Blogg’s personal investments and a council with well paid financial officers shows why questions should be asked. You seem to be suggesting that the council’s financial officers assumed that two of the banks were not Icelandic because they had London front companies regulated by the FSA. If so, this suggests that someone wasn’t doing their job. If they were British banks, the money would be safe.
You are right in saying that the Wyre Forest financial system has failed and that is why I am asking questions. This is neither Westminster politics nor some parochial tiff. This is legitimate questioning at a time when your own party seems more interested in bringing the nation to its financial knees for the sake of party point-scoring. My questions will do no such damage.
I am not alone in seeing my pension fund decimated and my mortgage at risk because of people in powerful financial positions who were too arrogant to think they needed regulating (and I don’t mean you here). Worcester West Tory PPC and former hedge fund manager, Harriet Baldwin had the audacity to suggest the FSA was over-regulating banks at your party conference in September, just as the banks collapsed around her. She and Mark Garnier both belonged to an industry which even George Bush accused of bringing down US banks through gambling. Of course, we have to question.
So yes, I want positive solutions and commend you and the opposition councillors for collaborating to find them, but I am not alone in wanting answers so those solutions can be found. That you are in the firing line is the price of being elected, I’m afraid.
It’s sad that the first time I fire a salvo at Wyre Forest’s cabinet you take such affront. I have every intention of working positively with Wyre Forest’s elected politicians if they will allow me. Hence, the substantial ideas document I proposed to the Kidderminster regeneration project in June – which has been well received by your officers. That was aimed at much more than your roof-fixing.
But as in any opposition based government system, Westminster or Wyre Forest, you must expect criticism and questions on some topics and support and co-operation on others.
As to your political colours only showing at election time; would that mean you won’t be posting any more negative comments about Health Concern on the Wyre Forest Agenda, or that you won’t be relegating Richard Taylor MP to a position in the audience when your candidate sits with Council officers at public meetings? Come now, John.
Neville Farmer
November 16, 2008 at 6:20 pm
I did not say that the officers didnt know the banks had Icelandic parents, I was trying (abet obviously unsuccessfully) to show that as UK operations they have to follow our rules etc and operate in the same way as UK owned banks.
Quote “I am also aware that you couldn’t have removed the funds before the end of October without losing large sums in interest but I don’t question that.” that is what you said, and I am saying it is wrong, and we could not get it back early, with or without the interest.
I didnt organise the meeting where Dr T sat in the Audience, it was organised by the Driving instructors. I am not important enough to tell people where to sit
I am unsure what Harriett or Marks proffessions has to do with anything. As to the whole national party thing, I influence their views as much as you influence the National Lib dems policy.
I dont dislike critism, in fact I think the way scrutiny is encouraged that sets our democracy apart from places such as Zimbawe.
You would be supprised how much even the most diverse political parties agree on.
As to “aimed at so much more than your roof fixing” its funny, you never sent me a copy of this substantial work as Council Leader. . . was it all a political stunt to get your name in the paper, or a real attempt to come forward with real ideas. As a charitable chap I will obviously assume the latter.
John
November 16, 2008 at 6:54 pm
I would not be at all surprised at how much opinion we share, John. Contrary to your earlier cheap shots; I care deeply about Wyre Forest as my family home. It’s for that reason I want to ensure that the damage caused by Sir Tatton Brinton and Margaret Thatcher to this town never occur again.
I am sad that you, as a leading councillor, have no say over your national Tory party policy. I belong to a party where I have a democratic say and the right to create policy. No policy is created without a Federal vote. I’ve written policy motions that have been voted into federal policy. Helen Dyke is part of a policy group working on the retail sector because her knowledge is so highly regarded. I’d have thought the Tories would have looked to you and similarly experienced members rather than dictate everything from Westminster.
As to your “political stunt” comment; tsk tsk!… As required by the council you run, I hand delivered the document to the appropriate department before the deadline. The Regeneration Officer, Matthew Barker, wrote a very encouraging letter to me this week to explain how many of my suggestions, prepared with Helen Dyke, Fran Oborski and Mike Price are currently under consideration by your council.
I thought you might have known but as a charitable chap, I will assume you have been rather busy. Goodnight.
November 19, 2008 at 7:10 am
Welcome to thw world according to John Campion, Neville. It is far removed from the real one, and consists of the self opinionated views of someone out of his depth in the real world. I have not read all his rantings, because they bore me, but one point was interesting… Politics only matter at election time! So, why dont they share the chairs around all parties at Wyre Forest. Why are all votes taken according to the Tory whip. Why are outspoken councillors, like John Aston, told in public to virtually “shut up”. Why do they regularly deliver Matters newsletters in the name of the Conservatives.
November 19, 2008 at 12:07 pm
Thanks for your input, Nigel. My first experience of JC “working together” with other councillors was watching him staring skywards and banging his head against the wall behind him as Howard Martin spoke in council. Perhaps I have different views of what “working together” actually means.
Then again, I’m much, much older than John. The closest I got to that kind of behaviour was when King Charles Grammar Deputy Head, George Oxendale would bang our heads against the wall for us – a collaborative effort if ever there was one!
November 20, 2008 at 6:33 pm
mmmmm-well when i was there, he didnt bash heads together… he was a hot shot at flicking a piece of chalk, or chucking the board rubber… good old George WOT!
November 21, 2008 at 10:04 am
I can almost hear him saying to some of our local representatives, ” I could take a herd of Yorkshire goats and teach them more in a week than I could teach you lot in a lifetime!”
But I also knew his kind side and he ended up becoming a mentor and supporter to me. For that, I am forever grateful.
November 21, 2008 at 10:08 am
Gosh, its nice to see that the really Wyre Forest hadnt sat down completely
the world is a far lest interesting place with out his bile.
Its also good to see that relations between the Lib dems and Nigel are being restored. Maybe he is due for a party change again, and as he has been through them all now, he wants to re-trace his steps.
November 21, 2008 at 10:13 am
I think that statement says it all about Campion Neville!
November 21, 2008 at 10:24 am
I can’t speak for Nigel but as you said yourself, John, local political views of all colours often have much more in common than one might expect. I think that’s enough venom for this thread. Let’s move onto another subject, like unifying behind you and Richard Taylor in the fight for Comberton Hill and The Walshes. Now that really is a disgrace!