Charities will be protected in Iceland crisis, insists Harman

Harriet Harman has reassured charities with money in Icelandic banks that the Government is working to protect their deposits.

The Leader of the House of Commons, standing in for Gordon Brown at Prime Minister's Questions yesterday, said small charities would get the same protection as individuals and have all deposits up to £50,000 protected.

The Government has also loaned money to the troubled banks, a move that will help to safeguard the assets of larger charities, said Harman.

"We are taking steps to protect larger charities by freezing the assets of the Icelandic banks and by lending £100m while the unfreezing of those assets is sorted out," she told the House of Commons.

It has been estimated that charities stand to lose £235m as a result of the failure of banks in Iceland.

Liz Atkins, director of public policy at umbrella body the NCVO, said some charities were still under "serious threat".

"Although the Government is prepared to protect individuals and smaller charities up to the tune of £50,000, we still need the Icelandic banks to do the honourable thing and pay up," she said.

The latest guidance from the Charity Commission sets out the terms under which small charities will be protected from loss. The information can be found here.

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