Goldsworthy quizzes Timms [oct 09]

6.00.11pm GMT Mon 20th Oct 2008

• [Oct 09]: Julia Goldsworthy (Shadow Secretary of State for Communities and Local Government . . ; Falmouth & Camborne, Liberal Democrat): I just have a quick question on the freezing of assets.

Could the Financial Secretary clarify under which legislation the assets were frozen? My understanding from reports in today's newspapers is that the freezing took place under anti-terrorism legislation, and I am interested to know how the Government justified freezing the assets through such legislation.

Stephen Timms (Financial Secretary, HM Treasury; East Ham, Labour): The important thing was to safeguard UK economic interests. The hon. Lady is quite right: the power used happened to be in the Anti-Terrorism, Crime and Security Act 2001, but it was felt necessary to protect UK economic interests.

Yesterday, the FSA also deemed that Heritable and Kaupthing did not meet threshold conditions. In order to provide for as much business continuity as possible, the majority of Heritable's retail deposits, and the Edge accounts in Kaupthing, were transferred to ING Direct, using the Banking (Special Provisions) Act 2008. ING Direct is working rapidly to ensure business as usual for customers. Action by the tripartite authorities protects savers' money and provides certainty for retail depositors. The transfer of the retail deposit book has been backed by cash from the Treasury and the financial services-