First Minister's Questions: Salmond slams UK government over Icelandic assets laws

Published on Thursday 6 November 2008 13:51

FIRST Minister Alex Salmond today hit out at the UK Government's use of anti-terror laws to freeze Icelandic assets.

The measure was taken last month when it emerged that public institutions across the UK had hundreds of millions of pounds invested in the Nordic country's failing banks.

But the use of anti-terror legislation met with an angry reaction from the Icelandic Prime Minister.

Mr Salmond said during First Minister's Questions today that there had been more warning of the situation based of details which have emerged from discussions at the "highest level" between both countries.

"I think it's right and proper that action is taken to protect the interests of Scottish and UK depositors," Mr Salmond said today.

"I'm not altogether convinced that its the wisest thing to do to give people the impression that they're branded as terrorists or part of a terrorist organisation.

"I think negotiations which I understand are now proving fruitful and beneficial are best conducted in that way as opposed to by name calling or depicting people as something which they obviously are not."

The UK Government froze all UK-held assets of the Icelandic bank Landsbanki after it collapsed last week, with Iceland's Prime Minister Geir Haarde "not very pleased" that anti-terror laws had been used.

More than 900 million was invested in Icelandic banks by UK councils, police and transport authorities, including 46 million from Scotland.

Mr Salmond was challenged by Tory David McLetchie about comments made by Nationalist backbencher Keith Brown last week that the UK Government was guilty of "despicable bullying" of Iceland.

Mr Salmond had earlier told Nationalist backbencher Christine Grahame that the Scottish Government is working with the UK Government and councils to secure and retain all Scottish assets and deposits tied up in Iceland.

He said finance secretary John Swinney is in regular contact with the UK Government and Cosla on the issue.

Ms Grahame said it would be "indefensible" if the Treasury is not prepared to underwrite the potential losses to local authorities and charities.

"Together with heightened energy bills, this is putting unacceptable pressures on our local authorities and not just them, but on household budgets," she said.