1 Horse Guards Road,
Information Rights Unit
London.
SW1A 2HQ
Tel: 020 7270 4558
Fax: 020 7451 4861
Russell Waterman
[email address]
www.hm-treasury.gov.uk
By email:
[FOI #10999 email]
Our refs:
IRU/9/433
Email/19535/2009
29th May 2009
Dear Mr. Waterman,
FREEDOM OF INFORMATION ACT REQUEST:
FINANCIAL SERVICES COMPENSATION SCHEME (FSCS)
Thank you for your enquiry dated 8th May 2009 following our reply of the same date
to your previous enquiry on this subject. You have clarified your earlier question by
indicating that you are seeking information showing whether the £50k available under
the FSCS is guaranteed in law. In particular you ask:
… If the Government has made clear that it stands behind the FSCS as you say
above, where has the government clearly guaranteed this in writing with legal
force ? …
2. The Government’s position was set out in detail by the Economic Secretary to the
Treasury (Mr Ian Pearson MP) during the Commons Committee stage of the
proceedings on the Banking Bill on the afternoon of 23 October 2008. The debate
was in the 4th sitting of the Public Bill Committee on the Banking Bill in the 2007-08
session. The full text can be found on the Parlia
ment website (www.Parliament.uk)
in the section on clause 159 of the Banking Bill at column 116 to column 120. The
Economic Secretary said:
“The Government stand behind the FSCS so that it can be relied upon to play its
role in meeting the claims that arise. There can be no question of allowing the
scheme to run out of funds. That is why we have made it clear that we would
ensure that the FSCS has access to immediate liquidity through borrowing from
the public sector. That has already been done by ensuring that finance was
available to the scheme to enable it to contribute to the costs of transferring
accounts from Bradford & Bingley to Abbey and from Heritable and Kaupthing
Singer and Friedlander to ING. Those loans have been made by the Bank of
England and will be refinanced by the Treasury in due course.”
3. The FSCS has a number of sources of funds including the ability to raise levies
from the financial services industry and borrowing. The Economic Secretary’s
statement makes clear that the Government is always prepared to make loans to the
FSCS if it is necessary to do so. The legal power for the FSCS to raise levies is
provided by the rules made by the Financial Services Authority (FSA) under section
213(3)(b) of the Financial Services and Markets Act 2000 (FSMA). If appropriate, the
Treasury could also make regulations under section 223B(4)(b) FSMA to allow the
FSCS to raise levies for meeting expenses in connection with loans from the National
Loans Fund arranged by the Treasury under section 223B(2) FSMA.
4. You have described your enquiries as, respectively, a request and a review under
the Freedom of Information Act 2000. However your latest correspondence clarifies
the intention behind your first request and seeks further information rather than
asking us to re-examine our handling of your original enquiry. Therefore we have
treated this as a further enquiry.
5. More generally, you have asked questions in your correspondence, rather than
made requests for recorded information. Your rights under the Act are to recorded
information. In the spirit of the Act, we have sought to identify recorded information
that would address the questions you have raised. The Information Commissioner
has published some advice for requesters, which highlights the difficulties associated
with enquiries of this sort, and includes pointers on how to frame a request for the
best prospects of success; a link to this is below:
http://www.ico.gov.uk/upload/documents/library/freedom_of_information/practical_applic
ation/fop100_how_to_make_a_request_v1.pdf.
6. I hope this clarifies matters for you fully but if you still have any queries about
this letter, please contact us at the email account given in the header to this letter. It
would help us, if you could remember to quote the IRU reference number (also in the
header) in any future communications.
Yours sincerely,
Information Rights Unit
On behalf of HM Treasury
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Your right to complain under the Freedom of Information Act 2000
If you are not happy with this reply, you may request a review by writing to HM Treasury, Information Rights Unit,
2/S2, 1 Horse Guards Road, London SW1A 2HQ. Email
[email address]. Any review request must be made within 2 months of the date of this letter.
It would assist our review if you set out which aspects of the reply concern you and why you are dissatisfied.
If you are not content with the outcome of your complaint, you may apply directly to the Information Commissioner for
a decision. Generally, the ICO cannot make a decision unless you have exhausted the complaints procedure
provided by the Treasury. The Information Commissioner can be contacted at: The Information Commissioner’s
Office, Wycliffe House, Water Lane, Wilmslow, Cheshire SK9 5AF.
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