Financial gloom overshadows FMQs

There was no doubt who the whipping boys were at Holyrood this week. The speculators.

Speculators were labelled "financial vandals" following the demise of HBOS

It was they, and they alone it would appear, who brought down the Bank of Scotland, an institution which has been with us since 1695.

Alex Salmond, at question time on Thursday, called these wicked speculators "financial vandals".

Iain Gray, the new Labour leader, said "they should go to the fire," a reference, I thought, to the Witchcraft Act but it was worse than that. He was talking, it seems, of the fires of hell and eternal damnation.

Annabel Goldie for the Conservatives said: "It's totally unacceptable to spread malicious rumours in the financial markets and to benefit from short-selling."

Tavish Scott condemned the "rich kids in bright shirts in London, New York and Tokyo who are making money at our expense."

And the Green's Patrick Harvey topped it all by condemning the "whole irresponsible game of financial Jenga".

He said: "The root cause of the problem is the culture of deregulated and buccaneer capitalism which all the other political parties have supported, celebrated and even courted."

He suggested we should get back to the traditional Scottish values of "self-reliance, sustainability, thrift and prudence."

The first minister said the takeover of Halifax Bank of Scotland by Lloyds TSB did not need to happen.

Only hours before the Bank of Scotland fell, it had been described by the Financial Services Authority as a satisfactory and well capitalised institution.

Yet in a telephone call at 7am that morning, Mr Salmond was to learn from the prime minister that HBOS's share price had tumbled so much it was being taken over by Lloyds TSB.

Mr Salmond said he would "strain every sinew" to save the 17,000 jobs at HBOS in Scotland and hold the new management to its promise to keep the headquarters in Edinburgh.

He agreed to Labour's suggestion of a "banking summit", saying he had arranged an emergency meeting of the Financial Industry Advisory Board next week.

He called for the UK Government to suspend the practice of short selling, the sale of borrowed shares, in the same way as Russia and the US had done. Hours later, the government did just that.

Glimmer of sunlight

It was a gloomy session of first minister's question time. The only sunlight came from the news that a new operator has been found for the Rosyth ferry route to the continent. But Norfolkline will not begin sailings until next spring and will only have one ship, currently being built in Italy.

Iain Gray began his new role as inquisitor-in-chief cautiously. He kept his eyes firmly fixed on his script and the only fire he revealed was the one reserved for the financial speculators.

Indeed, everyone was cautious. There was no criticism of HBOS bosses, no criticism of the chancellor or the prime minister, and no criticism of the competition or regulatory authorities.

There was an air of a crisis out of control, of who would be next? The first minister made several references to "other financial institutions" being in danger if the speculators were not curbed. It was all rather scary.

Cow

There was more gloom when MSPs debated the sorry state of the hill farming industry.

We heard farmers are currently making a £25 loss on every ewe and a £284 loss on every cow.

Net farm income in the upland areas has dropped to £1,500 a year. The SNP and the Conservatives combined to condemn the UK Government for planning to end direct subsidies by 2013.

Labour replied by saying the Scottish Government should be doing more to encourage councils, schools and hospitals to buy from local farms.

And the Liberal Democrats wanted payments from the European Less Favoured Area Support Scheme brought forward to October.

When it came to the debate on tourism in the afternoon, even the title was depressing. It was called "Growing pains" and the tourism committee asked the question: "Can we achieve a 50% growth in tourist revenue by 2015 ?"

The answer seemed to be: "Let's stick with the target even if the growth won't happen for a year or two yet."

Aid budget

On Wednesday, Health Secretary Nicola Sturgeon announced another £5m for the ambulance service to make sure there is no slide towards "single manning."

That was followed by a debate on Scotland's international aid programme.

It only amounts to £6m a year and is designed to complement the UK's overseas aid budget of £5bn. A total of £3m has been earmarked for projects in Malawi and there was an agonised debate over whether the rest should be spent elsewhere in southern Africa or whether some should be spent in India.

The former First Minister Jack McConnell, who is in line to go to Malawi as Britain's High Commissioner, argued for a coordinator to be appointed in Malawi now to begin the task of pulling Scotland's aid and exchange projects together.

Mr McConnell went on to lead a member's debate later in the day calling for 2014 to be declared "Scotland's Year of Sport".

He argued the Commonwealth Games and the Ryder Cup would create huge momentum towards making Scotland a healthier nation.

The Sports Minister Stewart Maxwell replied that every year should be Scotland's year of sport and we should all be out on the running track from now till 2014 and beyond.

So it was a week of much self-flagellation. We became our own whipping boys. We'd lost a bank, a ferry, and maybe a hill farming industry.

And although we were not to blame, of course, we all felt the pain.