Credit crisis dominates Holyrood

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The financial crisis dominated Holyrood after opposition parties demanded public infrastructure projects be brought forward to boost the economy.

The call from Scottish Labour leader Iain Gray and the Conservatives' Annabel Goldie came during first minister's questions.

Lib Dem leader Tavish Scott questioned whether the HBOS takeover was still the best way to save the bank.

Alex Salmond said capital spending had speeded up, but he wanted to do more.

Mr Gray urged ministers to shelve plans for its not-for-profit method for funding major public building projects, such as roads and hospitals.

Life is never going to be quite the same again, particularly in relation to borrowing Annabel GoldieScottish Tory leader

He said Holyrood ministers should revert to PPP/PFI tie-ups with the private sector, citing concerns that their Scottish Futures Trust was creating an investment black hole.

Mr Gray asked: "Will he act quickly to boost investment in re-skilling and retraining right now to prepare for any job losses we may face soon?

"In the national interest, will the first minister set aside for the moment the futures trust to realise funding for schools, hospitals and transport?"

Mr Salmond said PFI involved "credit card" repayment levels, saying it was important to get maximum value for money during troubled times.

"Given the urgency of this situation, I think it would be entirely appropriate for this parliament to ask the Treasury for the flexibility to accelerate the capital budget from the three-year programme, and front-load it into the coming year," added the first minister.

Rescue plan

Mr Salmond also insisted the government was pressing ahead with plans for the new Forth Bridge, under questioning from Ms Goldie.

In the wake of the UK Government's bank rescue announcement, she told MSPs: "Life is never going to be quite the same again, particularly in relation to borrowing."

A call from Mr Scott to negotiate with London in a bid to keep Scottish-based HBOS as an independent bank was also rejected by the first minister.

The Lib Dem leader said that, following Westminster ministers' £50bn part-nationalisation of major banks, the takeover of HBOS by Lloyds TSB was no longer the only deal in town.

Mr Salmond responded: "The reality at the present moment is there is an offer to shareholders supported by the Government, and that that offer will be therefore decided by shareholders of both banks."