In the interests of the Scottish economy the First Minister should drop his plans for the Scottish Futures Trust, Scottish Labour leader Iain Gray has stressed.

Instead, he has suggested the SNP government should be focusing on improving the Scottish economy by making more funds available for new schools, hospitals and transport projects. 

Gray argued: “The economist Keynes said: ‘When the facts change, I change my mind. What do you do sir?’

“The facts have changed. Governments are changing their minds. The Chancellor did not expect to be nationalising banks now. But he has done what had to be done.

“The First Minister must know that the economic facts have changed. The models to which he looked no longer work. Ireland is in recession. Iceland bailed out by Russia. Even in Norway, the central bank has had to draw down billions of dollars from the US Federal Reserve. The oil price is as volatile as bank shares and sits around $85 a barrel."

“Last week the Economy Committee heard powerful evidence that delays in the development of the Scottish Futures Trust are creating a black hole in infrastructure investment. This week Homes for Scotland told us that 100,000 construction jobs are at risk.

"In the national interest he should set aside the SFT for now and release funding for schools, hospitals and transport."

The SFT's initial function was meant to be the selling of bonds for major projects, but after it was deemed illegal it became an advisory body to bring together expertise and make decisions about projects.