Austin Mitchell: True Friend of Iceland

Former Labour MP Austin Mitchell passed away yesterday. His decency towards Iceland in her darkest hour will long be remembered...

As the Talibans marched into Kabul the other day, I recalled in The Conservative that in October 2008, the British Labour government invoked an Anti-Terrorism Law against Iceland, while at its website H.M. Treasury put Landsbanki, an Icelandic commercial bank, as well as the Central Bank of Iceland on a list with the Talibans, Al-Qaida and other notorious organisations and governments subject to sanctions. This was during the Icelandic bank collapse in the midst of the international financial crisis: Prime Minister Gordon Brown and Chancellor Alistair Darling wanted to ensure, they said, that no assets would be illegally transferred from the United Kingdom to Iceland. The British Treasury, they insisted, had to be fully reimbursed for its compensation to depositors in the Icelandic bank. I pointed out that this was an excuse rather than a reason, because Landsbanki’s London branch was already working under a Supervisory Notice which made any such transfers impossible without the consent of British authorities. The British Treasury would anyway be fully reimbursed for all its outlays by the sale of assets belonging to the fallen Icelandic banks, since the Icelandic Parliament had passed a law under which the claims of depositors, including of course British depositors, had priority over the claims of other bank creditors.

The Motion in the House of Commons  

At the time, there were a few people in the United Kingdom who protested against this unusual and brutal treatment of an old ally, a tiny nation in the North Atlantic which had for centuries supplied the British with fish, most crucially in the Second World War. How could Iceland which does not even have a military be put in the same category as the Talibans and Al-Qaida? The dissenters included Labour MP Austin Mitchell, Daniel Hannan, then Conservative MEP and now Baron Hannan of Kingsclere, and Dr. Eamonn Butler of the Adam Smith Institute. Yesterday, 18 August 2021, Mitchell passed away at the age of 86, and I would like to use this occasion to honour an old Icelandic tradition. It is to respond to friends and foes alike not with weapons, but with the written word. The Icelanders are a nation that forgets nothing and records everything. For example, in late tenth century when King Harold Bluetooth of Denmark seized the merchandise of an Icelandic ship which had stranded on the Danish coast, the Icelanders decided at a meeting of the Parliament (established in 930) to take revenge. Rhyming insults about the King should be composed, one for each inhabitant of Iceland. When the King learned about this he became so angry that he briefly contemplated an invasion of Iceland. Again, after pirates from the Barbary Coast (Algeria and Morocco) raided Iceland in 1627, several poems were written with the purpose of casting a spell on the raiders. I am not sure, alas, that this execution of poetic justice had any effect.

In Iceland, acts of friendship are recorded as assiduously as those of hostility. On 13 October 2008, after Brown and Darling had invoked the Anti-Terrorism Law against Iceland and British authorities had closed down subsidiaries and branches of Icelandic banks in the United Kingdom (at the same time as they had rescued all other banks, also those owned by foreigners), Mitchell tabled a motion in the House of Commons:  

That this House is concerned that instead of helping the UK's old ally and friend Iceland in its financial crisis, and taking concerted measures with the Icelandic government to help the Icelandic banks and to check the fall in the Icelandic krona, the Government has failed to provide either support or comfort, thus forcing the Icelandic government to turn to Russia; and points out that Iceland is a major trading partner, the source of much of Britain's vital fish imports and a major investor in many British businesses and deserves much better treatment and more helpful support in its current difficulties, particularly since if these are left unchecked the consequences will wash back on the British economy.

The motion was signed by three other Labour MPs, Ann Cryer, Neil Gerrard and Alan Simpson, two Conservatives, Sir Peter Bottomley and David Wilshire, Scottish nationalist Angus MacNeil and Elfyn Llwyd from Plaid Cymru. The Icelanders have not forgotten these eight names. A friend in need is a friend indeed.

Mitchell’s Letter to Gordon Brown

In those dark days, Mitchell also called Chancellor Darling who told him, in my opinion disingenuously, that the Anti-Terrorism Law had been the only legal expedient available on short notice to freeze Icelandic assets. Moreover, on 17 October 2008 Mitchell wrote a private letter to his party leader, Prime Minister Brown, where he was more outspoken than in the motion in the House of Commons. The letter was as follows:

Dear Gordon, I am very concerned about the approach we have taken, and are still taking, to Iceland. There is clearly a problem, particularly in the investments by local authorities in Icelandic banks, particularly Landsbanki’s Icesave, but this can be resolved given time and patience. The immediate response of criticising Iceland, invoking anti-terrorist legislation and seizing assets was, in my view, heavy handed, counterproductive and excessive. It has certainly produced a hostile reaction in Iceland, making us villain of the piece where we should have been friend and supporter. I don’t want British lenders who are doing so well here to be seen as unhelpful bullies in Iceland. If there’s one thing we know from the Cod Wars, it’s that Iceland responds badly to bullying. A small nation facing enormous difficulties needs help not coercion. They are associate members of the EU (they’ll never be full members as the CFP remains) and instead of driving them to get loans from Russia, a European support scheme, led by us, to sustain the kroner and bring financial support (a kind of IMF Plus) should be the way forward. It’s not to late to offer this. Our two countries need each other. Icelandic investment in this country is substantial—and particularly important to us in Humberside. It provides a larger number of jobs, indeed only last week I opened an expansion of Coldwater, a local seafood processor, which provides 700 jobs and has been financed by Landsbanki. I don’t want an Icelandic connection we depend on to be threatened in any way. The Icelandic government is doing its best to grapple with a huge problem. Things are returning to normality there and the economy will recover by going back to basics. Yet we should still, as their major partner, do our best to help and support a small nation in its tough situation. Yours sincerely, Austin Mitchell.

This letter has not been published before. Mitchell sent a copy to some friends in Iceland, and one of them gave it to me. But of course the Scottish politicians Brown and Darling had a vested interest in demonstrating to their voters in Scotland that the independence of a small nation could be perilous. Nevertheless, as Mitchell predicted, Iceland soon recovered. The economy was basically sound. But the Icelanders have not forgotten the events of 2008 when unbelievably they were put in the same category as the Talibans on the website of the British Treasury, however briefly. Whereas we are no longer composing rhyming insults about our antagonists, in a 2018 report for the Icelandic Ministry of Finance I tried, as fairly and objectively as I could, to put on record what Brown and Darling did to the Icelanders.

Mitchell and the British Political Tradition

Mitchell was originally an academic, with a D.Phil. from Oxford. He lectured for a while in New Zealand and then at Oxford, before becoming a journalist at Yorkshire Television. It was as an English reporter that he first visited Iceland in 1971, when the country was preparing to extend her fisheries limit to 50 miles, against the protests of the United Kingdom whose vessels had been harvesting fish in the Icelandic waters since 1412. Mitchell returned to Iceland in 1972 when the dispute had escalated into a ‘Cod War’. Under pressure from the United States which had an important military base in Iceland, the British government relented and recognised two extensions of the fisheries limit, first to 50 miles, then to 200 miles. In a 1977 by-election, Mitchell became MP for Grimsby, long the most important port in England for Icelandic fish, and therefore with strong historical ties to Iceland. While the city’s fishermen now had lost access to the fertile fishing grounds in the Icelandic waters, close and good relations with the Icelanders continued, and as an MP Mitchell often visited Iceland where he gained many personal friends. He was also leader of the British-Icelandic friendship group in the House of Commons. In 2015, soon after retiring as MP, Mitchell received the Order of the Icelandic Falcon from the President of Iceland. It was, I believe, his knowledge and understanding of the disastrous Common Fisheries Policy, CFP, of the European Union that made him a committed Eurosceptic. He repeatedly and passionately warned the Icelanders against joining the EU.

The Icelanders, at least those of my generation, are brought up to admire British culture, such as the political tradition of liberty under the law. Both Jon Sigurdsson, the leader of the Icelandic independence movement in the nineteenth century, and Jon Thorlaksson, founder of the modern Independence Party, used the Anglo-Saxon example to describe their ideals. When we studied English at school we were also told that two English words could only be translated with some difficulty into other languages because they referred to an unwritten local code of conduct: these words were ‘gentleman’ and ‘decency’. I cannot say that Brown and Darling behaved like gentlemen to the Icelanders, but certainly Mitchell lived up to the code of conduct encapsulated in these two celebrated words of the English language. In 2018, he published a lively memoir, Confessions of a Political Maverick. Today, his publisher, Iain Dale, remembered him: ‘Politics needs more Austin Mitchells. He had a zest for life and was unrelentingly optimistic, independent-minded and cheerful. He enriched the lives of everyone he encountered and I am proud to have counted him as a friend.’ So are the Icelanders.