Question to the HM Treasury:

To ask the Chancellor of the Exchequer, if he will consider the potential merits of the Government issuing an apology to the Icelandic people for using section 4 of the Anti-terrorism, Crime and Security Act 2001 to seize Icelandic bank assets between 2008 and 2011.

The Anti-terrorism, Crime and Security Act 2001 contains a broad range of provisions, and the Government has been clear that the Landsbanki Freezing Order 2008 was not made on the basis of the anti-terrorism provisions within the Act.

The decision to protect UK depositors in Icelandic banks was made after extensive conversations with the Icelandic Government who, at the time, were unable to provide assurances regarding the position of UK creditors following Landsbanki being placed into receivership in October 2008. This presented a serious risk that the rights of UK creditors would be prejudiced compared with those of others, which would have had an extremely detrimental impact on the UK economy at a time of unprecedent disturbances in the financial sector.

The Government believes that it was right to take urgent action to protect financial stability within the United Kingdom.

HM Treasury subsequently revoked the freezing orders on Landsbanki on 15 June 2009, without the normal notification period, as commitments made by the Icelandic Government in respect of depositors removed the threats to UK economic interests that had caused HMT to make the original Orders.

The UK greatly values its historic relationship with Iceland, with diplomatic relations stretching back over 80 years, and the Government will continue to ensure our bilateral and regional cooperation remains strong.