MPs demand compensation for Christie Charity

Finance | Vibeka Mair | 5 May 2009

A cross-party coalition of MPs will join the Christie Charity this Thursday to deliver a 100,000 strong-petition to Downing Street demanding the return of £6.5 million the health charity lost in the Icelandic banking collapse.

Since March, Christie’s has been fighting to overturn the Financial Services Compensation Scheme’s decision to not reimburse charities that lost funds in the crash last year.

In just two months, an e-petition from Christie on the Prime Minister’s website and paper appeals have attracted around 100,000 signatures, including that of Liberal Democrat leader Nick Clegg.

The issue of compensation for charities has been regularly raised in parliament over the last few months. Most recently an early day motion from Conservative MP Graham Brady called on the government to accept recommendations of the Treasury Select Committee report into the banking crisis, which said all charities should be compensated for their losses.

Brady (pictured) will help deliver Christie Charity’s petition this Thursday along with Labour MPs Sir Gerald Kaufman, Tony Lloyd, Barbara Keeley, Dr Brian Iddon, Ian McCartney and Lib Dem MPs Paul Rowen, John Leech and Mark Hunter.

Who's Who: Vibeka Mair

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Carl Allen
6 May 2009

The intent behind the EDM to compensate charity investment losses is commendable yet there remain several nagging matters to account for:

1. None of the charities have made a claim that their financial sustainability is under threat

2. From several reports, a number of charities have not reported their losses. So what is a reliable figure, Â£100 million, Â£200 million?

3. The funding for this compensation has to be ex-regulatory and will come from general funds that are meant for the entire third sector. These charities have no greater or lesser claim than the small frontline charities, and indeed many of these small frontline charities are under financial threat. A Â£100 million call for compensation for a few dozen charities do not sit well with the Â£20 million hardship fund made available for the many thousands of small frontline charities.

4. Calls for compensation as a one-off claim have not been accompanied by any assessment that clarifies whether or not the charities' approach to investment was acceptable. And there is no sign that part of the charity sector intends to review its approach to such investments. I am reminded of the RBS with its compensation fiasco.

I am reminded of a well-orchestrated smash-and-grab raid, by those who stood too close and herded at the hill of returns to see the mountain of risk behind.

[Reply]

John Stephens
Accountant
DAOF
6 May 2009

Many people lost money in Icelandic banks. Why should the Christie Charity be reimbursed Â£6million rather than old age pensioners who may have lost less in absolute but perhaps not in relative terms.

The Charity can recover but the pensioners have no second chance.

Perhaps next time the Treasurer will not be so greedy. Not all the eggs should be put in one basket.

[Reply]

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