Press Release

Government must act to protect jobs and communities hit by Icelandic banks collapse

10 October 2008

Local authorities with deposits in Icelandic banks must come clean about whether these monies are investment reserves or the day-to-day finances to support services and pay workers, urged Unite, the UK's biggest trade union.

Unite is deeply concerned that uncertainty surrounding the safety of the money tied-up in the troubled Icelandic banks could see essential services hit and bring further delay to the resolution of the ongoing pay dispute.

"We urge government - nationally and locally - to do all in its power to prevent the current global financial instability and insecurity wrecking local government finances and services," said Peter Allenson, Unite national secretary for local government.

"If that requires direct assistance from central government, such as that provided to the failing banks, then there must be no question of this money being forthcoming. These services are provided by some of the lowest paid workers in the country and used every day by some of the neediest people in the country. They need stability.

"We need clarity about the depth of exposure of local authorities to the Icelandic banks, how that translates into the day-to-day operation of those councils and what action government is taking to ensure services are not cut as a result of the collapse of these investments.

"Our members in local government have been hugely disappointed by the below-inflation pay offer from their employers and this latest news about a danger to local government finances in the future will concern them deeply. This is a time of immense uncertainty around the world but it must not be used to stall progress on the outstanding pay deal which would be seen as a further attack on low paid workers in this country."