For one thing, the extent of the challenge is so huge. For another, there are elections looming: the by-election in Glasgow North East next week, the UK General Election next year.

Doesn't do to frighten the voters with talk of spending cuts - unless, of course, you are talking about the cuts which would inevitably follow in the wake of victory by your wicked opponent.

Sooner or later, though - probably quietly, in private - Scotland collectively will have to address the challenge posed by Audit Scotland.

In short, they say that there will be a tight squeeze on spending levels over the next five years, that efficiency savings alone will not fill the gap and that the public sector in its entirety requires to start thinking about its core priorities with regard to expenditure.

As a start, today's exchanges at Holyrood were far from propitious.

Labour's Iain Gray spotlighted what he suggested was a poor record of attendance by the first minister at the Financial Services Advisory Board, or FiSAB.

Considered as a hit against the FM, it was reasonably effective on the day. Alex Salmond responded by insisting that he and the finance secretary had regular meetings with those involved in the industry.

But why didn't Mr Gray major on the state of Scotland's finances more generally?

Because the FM would then, undoubtedly, have counter-attacked by suggesting that the Labour UK government was the progenitor of the problem, perhaps quoting Audit Scotland to the effect that the UK "has experienced the worst deterioration in its public sector finances of all OECD countries".

Labour's news release on the subject suggests that the FM might start by abandoning what it calls "vanity" projects such as the National Conversation on the constitution.

I haven't the time to calculate the precise percentage of public spending that represents - but it is tiny, fragmentary. Scarcely substantive.

Returning to the chamber, Annabel Goldie challenged the FM over Audit Scotland.

Deploying the tack he would have used against Mr Gray, Alex Salmond said that both Labour and Tory UK governments were preparing to impoverish Scotland.

It was effective rhetoric - but in no way addressed the issue of how to cope with the medium-term challenge identified in today's report.

To be fair, Mr Salmond said both he and John Swinney were focused on making the best use of resources. But again, perhaps understandably, no detail for the future.

Tavish Scott stumbled somewhat. He quoted the FM as describing the Lloyds take-over of HBOS as the "deal of the century".

Mr Salmond produced the full quotation - which made plain he was interpreting Lloyds' view of the deal, while stressing his own considerable reservations.

Questions progressed - with, for example, Bill Aitken of the Tories offering the view that, whatever else is cut, police budgets must be protected. Translate that across Scotland, across other services which MSPs may want to cherish, and you can understand the extent of the challenge.

As to this year's budget, there can be no serious offstage discussions until Glasgow NE is by.

As to the future, this is a problem for MSPs of all parties - and for the whole public sector.

You'll have seen what he has in mind: rent or hotels not mortgages, a ban on employing relatives, curbs on what can be claimed, reduced pay-offs for MPs who stand down, receipts and explanations for all travel.

Plus key principles - such as honesty and accountability - upon which public life should be founded.

Does it all sound a bit familiar? It should. It's pretty broadly what happens at Holyrood, including the enlisting of fundamental principles.

The Holyrood system was itself substantially revised while George Reid was in the chair, in the light of earlier discontent.

Indeed, introducing his report, Sir Christopher called Holyrood in evidence, pointing to the system of publishing all expense details which, he said, had assuaged concern north of the Border.

The report itself also notes specific, detailed comparisons.

Lagging behind?

For example, with regard to proposed tight new rules on transport, the report counters critics by pointing out, faintly acidly, that "this transparency will bring the House of Commons in line with the Scottish Parliament, where such arrangements do not appear to be unduly bureaucratic."

However, there could be at least one area where Holyrood may end up lagging behind Westminster.

That concerns the employment by politicians of their relatives, frequently their spouses.

One Westminster spouse has argued that it would be "nice" if these arrangements could continue at least for as long as the other side of the partnership remains an MP.

Nice, it might be. But Sir Christopher is not moved.

He believes that such arrangements do not befit modern employment practice. They won't do. He wants the habit phased out.

In Holyrood, those who employ members of their family have to register the fact. But there is no ban on such employment.

'Double jobbing'

This may now form an element of the review by Sir Neil McIntosh who has been tasked by Holyrood's corporate body with looking at allowances north of the border.

There's another cross-border element examined by Sir Christopher Kelly and his team.

The issue of "double jobbing" - as it is known in Northern Ireland. The practice where a politician sits both at Westminster and in a devolved legislature.

Sir Christopher notes this is most common in Northern Ireland where 16 out of 18 Westminster MPs also sit in Stormont, five of them ministers.

Scotland's first minister, Alex Salmond, also presently holds a dual mandate - although he will resolve that shortly as he is not contesting the UK general election.

The Kelly report suggests the practice should end entirely, ideally in time for the 2011 devolved elections.

The RBS chief executive reckons that the latest impositions upon his banking group depart from the course he was steering.

He is not, however, in a strong position to protest. Think beggars. Consider also choosers.

His dispute is with the European Commission which has, among other things, ordered RBS to dispose of insurance interests and other subsidiaries.

Mr Hester feels such an approach will serve neither enhanced competition nor the prospect of speedy repayment to the Treasury.

The demands, he says, were "more material than we had hoped".

Translated into Scots, the RBS has had a skelping for past misdeeds.

And there's more.

Lloyds Banking Group - which includes the grumbling wraith that was once the Bank of Scotland - is also to dispose of parts of its government-encouraged empire.

That includes the 185 Lloyds TSB branches in Scotland.

And that revives the chimerical prospect of recreating a small Scottish bank.

Once more, the ever-affable Bill Jamieson at The Scotsman is to the fore in that regard.

He suggests that the Scots investment banker Ben Thomson might have a role in such an endeavour.

Only a year ago, there was a vigorous campaign to prevent the Bank (or, more accurately, HBOS, its brutally titled modern guise) from being swallowed by Lloyds.

There was much talk of Scottish patriotrism linked to enlightened self-interest.

Perhaps understandably, the Scottish financial sector now seems somewhat cowed, cautious and sullen.

Even more understandably, the Scottish government is declining to comment at this exceptionally early stage.

But others, such as Tavish Scott, are arguing that a distinct new (or recreated) Scottish bank just might "restore some pride and self-confidence".

Their persistent demands for internal debate; their frequent obsession with the niceties of party rules; their occasional bouts of smugness; their inherent tendency to rebel.

Tavish Scott is, himself, not that far removed in age from the Pestilential Tendency among the youth wing of his party. However, he has always been fearsomely pragmatic.

Hence his evident irritation when some of his fellow members insisted on demanding support for a referendum on Scottish independence.

Why couldn't they just shut up? A period of silence on your part etc etc

As successive Lib and LibDem leaders have found, requests for silence fall on self-stopped ears. Demands for unity simply generate still more insurrection.

So Mr Scott gave in and held an internal party discussion on the referendum issue on Saturday, in private.

Two outcomes. One, support for his position that the LibDems should oppose current SNP plans for a plebiscite. Two, the beast that is internal dissent within the LibDems has probably been sated for a while.

I imagine that, right now, the more fervent Nationalists (and, yes, there are one or two who are welcome contributors to this site) will be deploying rather sharper terms than exasperating to describe the LibDems.

But, from the LibDems' own perspective, they believe they have rebalanced to lay stresss upon their own position: which is to urge further powers for the Scottish Parliament en route to a federal UK.

As I have frequently pointed out on this blog, opposing a referendum is, politically, a very uncomfortable place to be. Hence "bring it on" from Wendy Alexander. Hence the LibDems closed doors discussion in Dunfermline.

Alex Salmond will now proceed with plans to table his Bill for a referendum, disregarding Opposition demands to drop the idea.

For Mr Salmond, this is not like the Local Income Tax Bill which was shelved in the face of sustained opposition and a contrary Parliamentary vote on the issue.

Independence is the primary reason for his party to exist. He will table the Referendum Bill and invite support - or criticism.

Should it fail, as now seems certain, he will use the issue to condemn his rivals at the Holyrood elections in 2011. In practice, that has been his fall-back position all along. In truth, Plan B was never very remote at any point.

But what of the LibDems? Their position is much more nuanced than straightforward opposition to Mr Salmond's Bill.

Of that, they say it is at the wrong recessionary time - and with the wrong question (a mandate to negotiate rather than a blunt Yes or No to independence.)

At Dunfermline, we are told that the issue was canvassed, that there were voices raised for a referendum. But, when Ross Finnie summed up by saying that opposition to the Salmond plan appeared overwhelming in the hall, there was no dissent. That position carried the day by acclaim.

Does that mean there is universal agreement as to how to proceed? No. No more than there is within other parties on this or other issues.

Does that mean that the LibDems are "all over the place" on this topic, as some assert?

No. Things were heading that way. But the critics of the leadership position have got what they demanded. A party discussion, albeit one held behind closed doors.

They have got what liberals everywhere crave: an audience, a hearing, a debate.

I believe Tavish Scott's position has thereby been strengthened on this issue - although he might have gone further and held the debate openly. As, for example, the SNP did when they were confronting a comparable dispute over whether to back the devolution referendum.

But back to those nuances.

Nuance One: the LibDems, like the SNP, hope to hold the balance of power after the UK general election next year. In those circumstances, they would include enhanced powers for Holyrood in their negotiation shopping list.

Lord Wallace of Tankerness has been tasked with dealing with the UK civil service on behalf of the party at Westminster.

It is not thought likely that the former leader of the Scottish LibDems will forget the land of his birth in advising the civil service machine of LibDem prioritites.

Nuance Two: the review of strategy in this field by Ross Finnie continues. It was not devised purely for the Saturday event in Dunfermline. But, for now, it appears that the party will lay stress on its own priorities, both in the field of the constitution and other areas.

That will certainly be the case up to and through the UK general election.

Nuance Three: the LibDems are not saying never to a referendum on independence. However, they are not even saying "maybe" at the moment. Mr Scott believes that a period of simple clarity would be welcome. So, on the constitution, they will talk about their own option of enhanced powers, of federalism.

There will be a new statement from the Scotland Office with regard to implementing the Calman proposals. In practice, it is likely to consist of action which might follow subsequent to a general election.

Mr Scott will be hoping for greater leverage for his preferences from whatever Westminster arithmetic emerges.

Nuance Four: the Scottish LibDems will then develop a position for their 2011 Holyrood manifesto and beyond. That might, in the light of events, include the position of saying maybe to an independence referendum.

But not, post Dunfermline, now. For now, expect the LibDems to argue more vigorously still for their own preference.

Thus the phrase hung in Bill Clinton's Little Rock campaign HQ by James Carville in 1992.

It was designed to focus the team upon the voters' concern with the dollar in their pocket. It worked inasmuch as Clinton won.

Iain Gray borrowed the phrase today for first minister's questions. However, Mr Gray appeared keen to focus on the word "stupid". Rather than the word "economy."

For this was a sharp personal attack upon Alex Salmond, based upon sundry criticisms from business organisations that the Scottish government might be more helpful - and less inclined to promote other "anti-business" policies such as minimum pricing for alcohol.

Mr Gray said the FM was "a banker who got it wrong on the banks, an economist who is getting it wrong on the economy, and a Scottish first minister who is getting it wrong for Scotland."

If Mr Salmond was rattled, he contrived to conceal it exceptionally well. He reminded Mr Gray that, having reshuffled his front bench team, he had now appointed most of the Labour group to office.

Smart move, reckoned the FM, getting potential critics on the payroll vote. (Not that they get paid extra - but you get the concept.)

The two then barracked each other about help for small business.

Then they traded insults based on quotes from, respectively, the Daily Mail and the Mail on Sunday.

And that was that.

Michael was renowned for many things. A former senior diplomat, he served as press secretary to the Queen for a decade which included the wedding of Prince Charles and Diana Spencer.

A native Scot, he returned to live in Edinburgh where he played an active and enthusiastic role in many Scottish institutions such as the Royal Lyceum Theatre.

His was an inclusive character, inclined to look favourably where he could and to disavow cynicism.

Personable, amicable and charismatic, he had friends and associates ranging from business to the arts, from politics to diplomacy.

This much is known. Let me add a single tale.

'Never retire'

Michael was a prolific writer. His work spread from thrillers to constitutional analysis.

I recall, in particular, one more. Just three years ago, he published The Freedom Years.

I chaired the session at the Edinburgh Book Festival in which Michael expounded upon the content of his book.

With his familiar energy and drive, he explained his thesis that older folk should never "retire". They should banish the word. They should disdain the slump into slipperdom which retirement implied.

Instead, they should adopt new challenges, they should find new activities. They should be busier and more productive than ever, regardless of their revised employment status.

It is simply tragic that aggressive illness and death has prevented Michael Shea from putting his thesis into prolonged, personal practice.

Memento mori.

Still, while he could, he remained active, eager and alert. Scotland is the better for it. He will be missed.

Understandably, they want politicians to be straightforward with them, to tell it as it is.

Then the wicked media pile in - and demand "straight answers to straight questions"

Result? Politicians seek sanctuary in platitudes, saying nothing in particular but saying it awfully well.

Of course, truth in absolute is rarely pure and never simple. Political decisions can be complex, often hideously so.

They will seldom present straight choices. Rather they are an amalgam of competing pressures.

Such is the case with the current controversy over alcohol in Scotland.

Alcohol problems

The Scottish government is about to introduce a Bill to set minimum prices for drinks, calculated by volume of alcohol.

The measure is supported by health professionals who say it will force up the price for certain drinks commonly associated with alcohol problems.

This, they say, will have discernible benefits for Scotland's health.
Critics say the measure may be illegal or ineffective or insufficient - or a blend of all three.

Then there is a further aspect.

The Scotch whisky trade is seriously concerned that such a move would have drastic, unintended consequences for their business.

Their argument is that they have fought a prolonged battle over many years to prevent foreign countries from imposing discriminatory duty on Scotch in order to prop up home-grown products.

They say there are countries which will use the precedent set by minimum pricing in Scotland to impose punitive duties on whisky. This is disputed by Scottish ministers.

Legal questions

How about that illegality point? Critics point to a ruling by the European Court's Advocate General to the effect that minimum pricing with regard to tobacco violated competition law.

No, say Ministers. That applied in the particular circumstances of an individual case. They cite a wider statement by the EU Commissioner, Gunther Verheugen, responsible for enterprise and industry.

Replying to Labour MEP Catherine Stihler, the Commissioner said that member states were not prohibited from using minimum pricing to pursue health directives, provided the measure fell within other aspects of Community law such as the free movement of goods.

One might quibble whether that ruling applies to devolved sub-divisions of EU member states - but ministers interpret this as meaning that minimum pricing is legal, provided a balance is struck.

They intend to strike that balance.

Which brings us, as ever at Holyrood, back to arithmetic. Can ministers assemble a coalition of support for this measure - which forms part of a much wider attempt to transform Scotland's attitude to alcohol?

Right now, looks difficult. The Liberal Democrats are against minimum pricing, preferring other measures.

'More evidence'

The Tories are also agin, opting for targeted duty increases on "problem drinks". It will be noted that this would involve action at a UK level, not in Scotland.

The Scottish Parliament has no control over duty.

Which leaves Labour. Over the weekend, they again demanded sight of the legal advice upon which ministers base their insistence that their initiative doesn't breach the law.

Further, they want more evidence that the measure would be effective.

Failing these, they say they remain unconvinced by the measure.

They back other initiatives - such as the Challenge 21 programme under which licence holders would be obliged to seek ID from anyone seeking to buy drink who appears to be under the age of 21.

Eighteen would remain the legal age for alcohol purchase.

Diluting proposals

Ministers say they are more than open to considering other ideas. They point out that their bill involves much more than minimum pricing.

There will be new constraints on the display and marketing of alcohol in off-sales premises. There will be curbs on heavy discount promotions.

Police forces will be able to request consideration of increasing the off-sales legal age to 21 in areas where there are substantial alcohol problems.

That is a diluted version of the original plan: proof, say ministers, that they are open to discussion.

But minimum pricing remains the big controversy - and will feature in the bill when it is published in mid-November.

Following that, the debate will intensify. Rarely pure, never simple.

The first is a regular members' survey. It discerned that manufacturers are becoming more optimistic and that the tourist trade had a relatively good summer.

In all, there are signs that recovery is under way, while remaining fragile.

As noted, my second source of information comes from chatting to Glaswegians who are currently being pursued by politicians in search of votes - the Glasgow North East by-election.

Firstly, two votes of thanks from me.

To the posse of young kids in Dennistoun who adopted me and kept the pavement clear while I havered to a camera. Nice one, guys.

Thanks too to the folk who took the time to voice their concerns to me about issues which they felt should be prominent in the by-election.

Folk like the mum who was persuaded to speak by her young sons - then proceeded to offer an excellent analysis of what is going right in her patch. And what is going wrong.

To the other woman who paused on her way to the dentist, hope the treatment worked.
And the issues raised? Predominantly, two - or, rather, one issue, conjoined.

The economy, poverty, the lack of jobs - allied to the attendant crime and disorder.

I say "disorder" deliberately. Several folk I spoke to stressed that they weren't predominantly talking about major crime. Most were well aware of efforts to tackle crime locally.

Rather, they were talking about petty, loutish crime - vandalism, disruptive behaviour, lack of respect.

A sense, as one put it, that the area had lost its way a bit. Plus, of course, the ever present drugs.

Virtually everyone I spoke to made the link between crime and a lack of economic opportunity - although several also felt there were members of the community who didn't make enough effort to sort themselves out.

To be clear, this wasn't an unfocused, collective whinge. Very, very far from it.

These people were very well aware of efforts by politicians - Westminster, Holyrood and local authority - to improve things.

They knew about training schemes, they knew about area rehabilitation, they knew about leisure facilities, they knew about efforts to counter crime. They appreciated the public spending.

But they felt it wasn't sufficient. They felt it wasn't properly directed, offering me local examples.

They felt the core was preventing another generation from dwindling into workless malcontent.

Some linger longer.

Others hover persistently in the background, occasionally breaking through.

Swine flu falls into the latter category.

When first detected, it was dominant.

Remember the fuss when the first confirmed cases arrived back in Scotland?

The grim expectation must be that it is about to become dominant as a news issue again.

We must all simply hope that the vaccination programme is as successful as possible in limiting the impact.

On this issue, as Health Secretary in Scotland, Nicola Sturgeon has proved capable, steady and focused.

She has offered the right balance of blunt warnings tempered by sensible reassurance.

She has worked co-operatively with counterparts in London.

Due praise too for health officials in Scotland who have responded efficiently to date.

Again, we must simply hope that this effort is sustained in the notably challenging period ahead.

Mr Wilson, sitting in the hall, smiled knowingly.

For all that, it may prove to be one of his most significant orations. For two reasons. Both concerned with forward looking strategy.

Firstly, as billed, Mr Salmond set out the details of the method by which he hopes to prise concessions from a future UK government in the event of a hung parliament at Westminster after the next General Election.

In essence, it boils down to budgetary concessions.

The SNP would seek to extract gains for Scotland in return for voting through the clauses of a Budget to be introduced by the next government at Westminster.

Why just the budget? Because the SNP doesn't usually vote on legislation which affects England only - and would generally pursue that tactic in the next Westminster Parliament.

For another, because Mr Salmond has indicated that big-ticket programmes such as Trident might be a demand too far, resulting in zero flexibility.

For a third, because the economy is all at the moment.

There are, of course, a number of obstacles in Mr Salmond's path.

The SNP is only in play at all if there is a hung or exceptionally tight Parliament, if they have enough MPs to make a difference and if other parties, such as the Liberal Democrats, don't cut a deal first.

However, that would be for the future.

This is primarily about tactics now, about ensuring that the SNP is not squeezed entirely out of a contest where the prime focus for the voters is choosing the British Prime Minister.

The second element which intrigued me in Alex Salmond's speech was the section on the economy more generally.

He declared that the creation of wealth - and its distribution - were important when times are good and imperative when times are tough.

He went on to argue that the way to address the problems confronting the public finances was to grow the economy.

To me, this sounded rather close to the previous Gordon Brown argument when the PM sought to contrast what he called Labour investment with Tory cuts.

It sounded as if he was suggesting that the SNP could obviate spending cuts.

However, SNP strategists insist that the party isn't disavowing the need for spending constraint.

They point to the cancellation of the Glasgow Airport Rail Link as evidence of the readiness to make tough choices.

The sun shone and the sandwiches held out longer than on the opening day - no doubt contributing to an air of general bonhomie among the delegates.

There was a comradely dispute as to whether an independent Scotland would require a referendum before opting to join the Euro.

Alyn Smith MEP was among those arguing that a referendum would be a conditional step too far. Better to get on and join.

But most delegates sided with John Swinney who said: join but only when the economic conditions are right and there's been a referendum.

In a webcast interview with me, Alex Salmond argued the case for an independence referendum - but demurred at the suggestion that there should be a popular poll on whether to maintain the monarchy, post independence.

Her Majesty, it seems, would stay.

Looking for money

Mr Salmond also offered a few more pointers as to the concessions he would seek to prize from Westminster in the event of a hung Parliament after the UK General Election.

He'd be looking, in essence, for money: protecting public spending and capital investment in Scotland.

I asked him whether he'd seek to oblige his UK counterparts to abandon Trident. Mr Salmond thought not.

This, it seems, would be a demand too far - likely to deter positive gains for Scotland rather than promote them.

To be quite clear, the SNP leader also reiterated his complete opposition to Trident and to the cost of upgrading it.

In his keynote speech, John Swinney argued the case for fiscal autonomy.

I was most intrigued by his efforts to contrast that position with the reforms advanced by the Calman Commission.

You'll remember that Calman advocated devolving a proportion of income tax to Scotland, with concomitant varying powers.

But Mr Swinney argued that "would expose the Scottish budget to a significant degree of volatility and vulnerability without giving us the levers of economic control to counter these effects."

Like most givens, it is somewhat remote from the facts.

Yes, it was the votes of the 11 SNP MPs which, added to the others, defeated Team Callaghan in a Commons vote of confidence.

But defeat at the polls - and the subsequent election of Margaret Thatcher - were, of course, dependent on the votes of millions of people. Not the SNP 11.

Still, it can be a position of some influence to hold the balance of power in a hung or tight parliament.

That is the argument being advanced by Alex Salmond at the SNP conference in Inverness.

He says that his party could wield power at Westminster if it obtains its target of securing 20 MPs.

Hung parliament

To reminisce a little more (c'mon, I've been covering politics for a wee while, give a guy a break), I recall when David Steel enthused his Liberals by sending them home to their constituencies . . . to prepare for government. (The built-in pause was part of the effect.)

The Salmond message is a little different. Go home to your constituences . . . and prepare for a hung parliament.

Might be said to lack a little punch. I dissent. I believe that it is a sensible strategy from an SNP perspective.

Like most such strategies, it is born of necessity.

Nationalists are facing two taunts from their opponents in advance of the coming UK General election.

Taunt one: that they would favour the election of a Conservative government - because said Tories would be likely to have only a handful of MPs from Scotland at most, thus highlighting a claimed democratic deficit and assisting the cause of independence.

Taunt two: that SNP votes are irrelevant at a Westminster General Election because the Nationalists are in no position to form a UK government.

Serious players

Of the two, the second is more potent.

Privately, Nationalists know they have to prevent such a thought from gaining salience in the voters' minds particularly in an election where the two largest parties, Labour and Tory, will be keen to stress that they, and only they, are serious players.

The Salmond strategy addresses both taunts, simultaneously.

Firstly, the offer is potentially there for whichever party forms the next UK government.

Whomsoever the Queen invites, the Nationalists would seek to influence, should they have the clout.

That will be Mr Salmond's answer to the "Tory taunt". He will say that his stated preference is for a hung parliament.

The Nationalists, incidentally, point to polling evidence which suggests that people favour such a curb on power, particularly in the light of experience at Holyrood.

At the same time, challenged as to relevance, Mr Salmond will say - and is saying - that the Nationalists could be in a position to lever gains for Scotland at Westminster, if given the chance by the voters.

Budget measures

What is the SNP offering? No coalition: they wouldn't offer, the UK parties wouldn't countenance.

Rather case by case support: in particular, on the budget measures which are certain to follow the next UK election.

What would they want? Again case by case but, most immediately, action to ameliorate spending issues in Scotland.

For example, the release of money held in Whitehall from the fossil fuel levy.

They would also press for a role for the Scottish government in future international events: a role presently denied in, for example, the forthcoming Copenhagen climate summit.

Would they go further and demand, for example, the cancellation of Trident? My information is that would be seen as pushing it somewhat, overplaying the hand.

Would the big UK parties play? They would do almost anything rather than be dependent on the votes of the SNP.

Further, they will argue volubly that the SNP remains irrelevant to the future governance of the UK.

But, Mr Salmond will counter, the electoral arithmetic might dictate otherwise.

As in the 1970s, the outcome will rest with the voters. Not with the calculations and stratagems of politicians, however skilled.

Labour Ministers were getting increasingly frustrated at what they saw as a lack of discipline on the part of their coalition chums.

In the interests of open politics, Jim Wallace, the former Liberal Democrat leader, invited a Labour cabinet colleague to attend a LibDem group meeting.

On thus witnessing the customary blend of hard politics and quasi-anarchy, the Labour colleague opined: "Well, Jim, you must be one hard b . . . d to lead that lot!"

The leadership of the LibDems may have changed, twice, since then. But the customary, cheery blend is still to the fore.

At the Bournemouth conference, before and since, Tavish Scott has found it simply impossible to persuade some in his party to shut up about the issue of an independence referendum.

Mr Scott it was who took a notably hard line against the referendum when the LibDems considered the prospect of a coalition with the SNP after the 2007 Holyrood elections.

decision-making

Mr Scott it is who remains resolutely opposed to such a plebiscite.

He says that he is not inclined to assist with implementing the policy of a rival party, particularly when it is designed to lead to an outcome, independence, which the LibDems condemn.

But there remain LibDems - both in the Holyrood group and across Scotland as a whole - who believe in a referendum: either because they support the concept of popular decision-making or because, tactically, an early referendum could close the issue down.

Today's announcement by the LibDems that they are to review their policy on a referendum should be seen in light of the above.

The leadership wants to curtail this debate, internally - not precipitate a U-turn.
Ross Finnie has been asked to instigate a review.

That will go to a private debate at the party's autumn conference at the end of this month.

It is Tavish Scott's hope that this will allow those who oppose his strategy to have their say in the full and frank exchange which a private debate will permit.

Cul de sac

He hopes that, defeated, they then turn their attention to other matters.

This reminds me to some extent of the debate held by the SNP on whether to back a Yes/Yes vote in the 1997 devolution referendum.

Then, there were voices arguing that devolution was a con, a cul de sac.

Key difference. The SNP held that debate in public at, as I recall, a National Council meeting in Perth.

The leadership policy of backing the Yes campaign was overwhelmingly supported.

But there's more. Ross Finnie insists that he is instigating a wide-ranging review.

This will encompass attitudes to the existing referendum proposal, alternative strategies - plus a look at what might happen should another party row in behind the idea of a plebiscite.

Private meeting

That wider discussion could involve a look at preparing the ground for the terms upon which the LibDems might, in future, countenance a referendum.

Do I think the LibDems will back a referendum now? No, they will back Mr Scott.

I feel sure that outcome will be relayed to us from the private meeting.

Do I think there will eventually be a referendum? Yes.

Bet Mr Gray wishes now that he'd stuck at four.

In response to that bonus inquisition, Mr Salmond noted drolly that he had faced three Labour leaders in the chamber and, given today's performance, might be on course to cope with a fourth.

The extra question had been added because PO ALex Fergusson felt the first minister was posing challenges to his Labour opponent - instead of the other way round.

In classic fashion, Mr Salmond deployed the extra exchange to launch the sharpest attack of all.

Mr Gray's questions concerned the issue of the FM paying council tax upon Bute House, his official residence in Edinburgh.

It started well with the Labour leader reminding the chamber of a previous SNP attack upon erstwhile FMs for failing to stump up council tax on the Adam-designed mansion, conveyed to the National Trust by the Marquess of Bute.

Public debate

Why hadn't the SNP kept its promise? Alex Salmond then read out a substantial list of reasons laid down by officials - and noted the Scottish government paid 10 times more in business rates.

Mr Gray then diverted into other issues: London expenses for the FM and a repeated challenge to a public debate.

During the latter exchange, Mr Gray gestured with his arms in a fashion which seemed to say: "Come and have a go if you think you're hard enough."

Or, in demotic parlance, "OK, pal, ootside".

It was vigorous stuff - but Mr Salmond seemed notably unflustered. Quite the reverse, in fact.

Then came that fifth question.

The next batch will feature a range of warnings. Stand by for competitive gloom.

The big new idea at the Conservative conference in Manchester was a pay freeze in the public sector.

Or it would have been new if Labour hadn't announced something comparable the night before.

There are differences. Chancellor Alistair Darling announced a freeze for senior staff with very low rises for others.

It wouldn't affect members of the armed forces or those on multiple-year deals. His shadow, George Osborne, signalled a freeze for all in 2011 - except those earning less than £18,000 and military personnel serving in Afghanistan.

Still, the Tories thought it was a bit sneaky of the UK government to make a significant announcement during their conference.

Trust funds

Might it not have shown more courage, they added, to hand out the tough news during Labour's own gig?

But there was more from Mr Osborne: sharp cuts in Whitehall back office spending, cuts at Westminster, moves to limit child trust funds to the poorest - plus an accelerated rise in the pension age to 66, trailed in advance.

Impact on Scotland? Absolutely. Pensions, tax and pay intentions affect Scotland directly.

The potential cuts in Whitehall spending translate indirectly via Barnett.

Given the level of borrowing and the state of the public finances, whoever wins the 2010 UK election will be obliged to impose restraint or hike taxes or both, not least to placate watchful global markets.

Via Barnett, that filters down to spending restraint in Scotland. The Barnett formula, of course, works both ways.

Scotland gets a fixed percentage of annual increases in comparable Whitehall departmental budgets: those which cover devolved functions.

In exactly the same way, Scotland takes a proportionate share of cuts. Which means that the 2011 Holyrood elections will be fought against a background of shrinking public spending.