Saver pledge freezes out councils
Updated on 08 October 2008
The Local Government Association wants the guarantee on Icelandic bank deposits extended to local council investments.
The government is guaranteeing that hundreds of thousands of savers who have invested cash in troubled Icelandic banks will get all of their money back.
But it is not offering the same reassurance to dozens of local authorities with deposits in Iceland.
The chancellor, Alistair Darling, said he had been forced to take action because the Icelandic authorities had reneged on an agreement to compensate British depositors.
The Local Government Association wants councils treated in the same way, but Mr Darling said they were in a different position because they were informed investors.
