Letter to the Federation of Small Businesses sent Nov 11 2008:

Letter to the Federation of Small Businesses sent Nov 11 2008:

Federation of Small Businesses
Sir Frank Whittle Way,
Blackpool Business Park,
cc. Lincolnshire branch

11th November 2008

Dear Sirs,
I am sure you have heard of the problems facing depositors in Kaupthing Singer and Friedlander bank on the Isle of Man. However, you may not be aware of the full background and effect this is having on a number of small businesses.

I am a member of the KSF(IoM) Depositor Action Group who are seeking to recover some 550 million GBP effectively stolen from depositors by the UK Government. I enclose a copy of the Action Group position paper which tends to take the view of individual depositors. The position for small companies is, if anything, even worse. The Compensation Scheme proposed by the IoM government favours individual depositors and, since a loss of this kind is viewed as a capital loss rather than a business expense, HMG still expects corporation tax to be paid on money my business may very well not have! In fact this money was put away for the purpose of paying the tax. We have $xxx,000 tied up in this account.

I am also enclosing a letter to a member of the group from Philip Hammond, MP. Shadow Chief Secretary to the Treasury, because it clearly lays out the Opposition position on the matter. However, it must be said that some considerable support has be given by Labour MPs; notably Mary Creagh who managed to table an adjournment debate on the matter but received little satisfaction from her honourable friend, Ian Pearson, the business and enterprise minister.

It is essential that the government is lobbied for the return of the 550 million GBP it took when putting KSF UK into administration. If this had not been confiscated, KSF (IoM) would have remained solvent.
A number of MPs have been very supportive of depositors in their constituencies but I believe it is essential that the Small Business angle is pressed forcefully, especially at this time when various measures are being discussed to help us face the coming recession.
I have written myself to Baroness Vadera but had no reply. As a member of the FSB, I ask the FSB to take this up with her and other ministers at the earliest opportunity on behalf of G7th Ltd. and other small businesses affected.

Yours faithfully


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