Global turmoil, local dilemmas

As Vince Cable pointed out yesterday, events sure are fast-moving.  The latest is that over 20 councils have cash sunk in troubled Icelandic banks.  And that’s aside from organisations such as Transport for London, which – according to Boris – has £40 million at stake here.  Accordingly, the various heads of these local bodies are seeking to meet with the Treasury, to try and get assurances that their money will be safeguarded.  It’s not looking too promising for them.  In the Q&A session following his statement yesterday, Alistair Darling seemed to suggest that – in effect – councils should have known better.  Problem is, council leaders are claiming that they followed Treasury advice on investing – so things could get very messy for the Government, indeed.  And they could get slightly messy for the Tories too.  If the councils do lose this money, then expect the political opposition to George Osborne’s tax freeze to be ramped up a notch.