Initially, Gray oversaw some electoral successes for Scottish Labour, such as repelling SNP challenges at the Glenrothes (2008) and Glasgow North East (2009) by-elections, as well as seeing Scottish Labour retain all their 41 seats in the House of Commons at the 2010 general election; despite the election overall resulting in the first UK hung parliament in 36 years, and the Labour Party being defeated after thirteen years in government. The 2011 Scottish Parliament election proved disastrous for the party, which lost 20 seats as the SNP won an outright majority of seats. Gray himself was only re-elected as MSP for East Lothian with a narrow majority of 151 votes. Gray announced his resignation the day after the result, but remained in post as leader until his successor, Johann Lamont, took over on 17 December 2011.
Due to his experience, Gray was appointed as Acting Leader of the Scottish Labour Party while a leadership and a deputy leadership election were being simultaneously held, on account of deputy leader Kezia Dugdale resigning to run for the leadership and the resignation of previous leader Jim Murphy after Scottish Labour's landslide defeat at the 2015 general election.
Having subsequently a change of mind, he was selected as the official Labour candidate for East Lothian for the 2007 election and subsequently won. Gray was appointed as Scottish Labour's Shadow spokesman for enterprise, energy and tourism upon his return to Holyrood.
In December 2010, Iain Gray sparked a diplomatic row when he appeared to claim in parliament that Montenegro had been involved in ethnic cleansing and war crimes during the 1990s Balkans Conflict.[10]
On 7 April 2011, whilst campaigning at Glasgow Central station for the Scottish Parliament election, Gray was forced to cancel an event due to disruption by a group protesting against public spending cuts.[11] He quickly left the station and ran into a nearby Subway outlet to escape the protesters, who followed him into the shop and continued to heckle him.[11] Gray later stated that he had not been unsettled by the incident as "I spent two years working in the civil war in Mozambique, I've been to Rwanda two months after the genocide, I walked the killing fields in Cambodia and I was in Chile three days after Pinochet was demitted from office".[12]
At the 2011 election, Labour suffered a net loss of seven seats, with many of their leading figures being defeated. Labour took a particularly severe beating in its Central Belt heartland, having to rely on regional lists in many cases. It was Labour's worst electoral performance in Scotland in eighty years. Gray himself was re-elected as MSP for East Lothian by the narrowest margin of his political career; with just 151 votes over the SNP candidate, making the Holyrood seat for the first time ever a Labour–SNP marginal. He announced on 6 May that he would stand down as party leader in the autumn.
On 13 June 2015, Gray was appointed Acting Leader of the Scottish Labour Party whilst a leadership and a deputy leadership election were simultaneously held, on account of deputy leader Kezia Dugdale resigning to run for the leadership.[13] At the 2016 Scottish Parliament election, while several Labour MSPs lost their seats, Gray retained his seat with an increased majority compared to 2011.
Gray announced that he would be standing down at the 2021 Scottish Parliament election in June 2020, in order to spend more time with his family.[14]
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