Yesterday's pre-budget report by the Chancellor confirms the economic mess in which we are now mired.  But it confirms something else too: that politics is dominated by opportunism.

The supposed handouts will be short-lived and only serve to build up yet more debt, something that will have to be paid for in higher taxes.  The budget deficit is set to rise to some 8 per cent of GDP, making the limit under EU rules of a 3 per cent deficit look somewhat fanciful.

The Glenrothes by-election yesterday saw Labour hanging on and the SNP failing to come anywhere near taking the seat after looking to be unstoppable just a couple of months ago.  Extravagant claims meant that many commentators had written this off as an SNP gain already.  Instead, the swing from Labour to the SNP was a mere 4%.  Has Alex Salmond's bubble burst?

The SNP increased its share of the vote by 13.1% but at the expense - it would seem - of the Liberal Democrats and Conservatives.  In this widely-trailed two-horse race it is hardly surprising that protest votes would go to the party most likely to unseat Labour, but what is surprising is that Labour's share of the vote actually increased.  There are a couple of important explanations for this.

The first is that the SNP is largely the 'incumbent' party as far as Scottish politics is concerned.  As voters begin to learn more about its performance in government and its plans for the future, the enthusiasm with which they rally behind the SNP to bash Labour will diminish.

The second reason is that the Labour party at Westminster is seen to be tackling the financial crisis, however controversially, with the SNP as bemused bystanders.  The fate of two Scottish-led banks - RBS and HBOS - is in the hands of Gordon Brown, not Alex Salmond.  The real pain from the financial crisis is still to unfold but as of this moment the electorate can only look to political leaders in London to provide some sort of lifeline.

This is not yet evidence of any great comeback by Labour and the coming job losses and house repossessions will almost certainly hit Labour hard.  It is more of a political stalemate as the old established parties fight it out with little real enthusiasm behind them.

As Hamish Mcdonell notes in The Scotsman :

Momentum is everything in politics. Going into the Glenrothes by-election, it was with the SNP. Now, as the ballot boxes are packed away and the posters are taken down around the Fife constituency, that momentum has been stopped.

It is far too early, and there is much more to be done, before that momentum is transferred completely to the Labour Party. Indeed, that may never happen. For Labour, Glenrothes may prove to be a temporary blip, a short respite in an overall downward spiral.

What of the also-rans?  The Liberal Democrats and Conservatives saw their votes collapse.  While part of this may be the effect of a by-election with the SNP being seen as the main challenger, it is also the case that confident and strong parties should not collapse so easily.  The Conservatives are largely an irrelevance now in Scottish politics. The four minor parties achieved less than 2% of the vote between them.  There is no obvious challenge to the status quo, but neither is there any great enthusiasm for the status quo.  Something has to give.

We sense a vacuum of ideas in Scottish politics.  The SNP's forward march has been halted but nobody among the established parties is mapping out an alternative future for this country.  The Scottish Progressives seek to work with others to provide that alternative and build a coalition of ideas to challenge the politics of failure that has been Scotland's lot these past number of years.

The UK government's bail-out and part-nationalisation of the banks has hit a snag with the £17 billion merger between Lloyds TSB and HBOS.  The merger must go ahead and both institutions are in favour, says the prime minister.

Gordon Brown told the BBC's Politics Show both institutions now want the proposed merger, which has been brought about by the crisis in banking.

Under the plan, £17bn would be put into HBOS and Lloyds TSB, meaning taxpayers would own about 40% of the merged institutions.

The SNP and Liberal Democrats have questioned if the deal should go ahead.

They have called for clarification over the bail-out, arguing that it may still be possible to preserve HBOS, while the Conservatives have branded the deal "necessary but expensive".

But Mr Brown said: "We have one offer, which is the Lloyds TSB, it protects the maintenance of the Halifax Bank of Scotland, in merger with Lloyds TSB and if people have another offer then obviously we'll look at it.

"But that's the only offer on the table."

One thing for sure is that the banking crisis calls into question the SNP's confidence in Scotland's financial industry.  The two leading banks - RSB and HBOS - will come out of this mess being largely owned by the government in London.  While non-Scottish ownership is not in itself a problem, ownership by the UK government is.  It's a thorny issue for Mr Salmond and one that is not going to go away easily.

Eight candidates will take part in the Glenrothes by-election on 6 November.  The main interest will be in whether Labour can defend the seat against the SNP, but it will also be interesting to see whether the minor parties can make any impact.  The parties contesting theseat are: Labour, Conservatives, Liberal Democrats, Scottish Socialists, Solidarity, UK Independence Party and the Senior Citizens Unity Party.

Full details of the candidates can be found here .

It is sometimes easy to forget that large areas of policy are decided at Westminster, not Holyrood.  Major economic decisions, defence, foreign policy, social security, immigration and indeed the overall budget for Holyrood are all matters for the UK government (and in fact some of these powers are handed over to, or shared with, the European Union).  So what happens in politics should be equally of interest to us as events at Holyrood.

But it seems difficult to get excited over Gordon Brown's Cabinet reshuffle.  The headline news is that Peter Mandelson is back from his four years of exile in Brussels to become the new business and enterprise secretary.   We have been treated to a whole weekend of political gossip about the relationship between Mandelson and Brown, how Mandelson sought tony Blair's advice before accepting the post and so on.  Peter Mandelson's long association with the media ensures that the media will cover him extensively even when the news is of little substance.

Tony Blair once famously said that he would know that the Labour party had changed when it had learned to love Peter Mandelson.  By that token, the Labour party has not changed too much.  Mandelson's appointment has caused some alarm on the left of the Labour party.

Yet it must be said that during Mandelson's time in Brussels he was a strong advocate for trade reform and got into more than a few scraps with the protectionist politicians around him.  His media image as the 'Prince of Darkness' has always been bizarre; he has no doubt engaged in much political spin, like all politicians, but unlike most of them he is good at it (hence much of the vitriol).  The one area in which his spin has not been successful is in promoting his own image.  In furthering the cause of the Labour party or more particularly Blair, Mandelson has been the lightning rod for the bile and hatred that is the bread and butter of politics.  And that, in political terms, is the ultimate spin, for we blame the supposed backroom manipulators for the errors while their political masters take the credit for successes.

As a frontline politician once more in a time of financial crisis, Mandelson will once more come under scrutiny.  However, let's not fall for the media hype, positive or negative.  He should be judged on his performance in the job, not the various stories that invariably seem to follow him around.

"If you put two economists in a room, you get two opinions," Winston Churchill once remarked, "unless one of them is Lord Keynes, in which case you get three opinions."

The First Minister's Council of Economic Advisers is meeting today and will tackle the thorny question of potential job losses from the Lloyds TSB takeover of HBOS.  Alex Salmond wants the Council to come up with a case for why the merged entity should keep headquarters jobs in Edinburgh.

We can be sure that the Council will come up with something.  That is their job.  However, expect Lloyds TSB to do their own analysis regardless of anything Salmond's hired hands might say.

The wider issue is whether or not Scotland can claim to be a "world-class business base," as Salmond says, and whether it does have the "competitive advantage" that he asserts.  For Lloyds TSB and others to be convinced of that we really need to see a change in direction in the Scottish government.

So it should be out with talk of endless new entitlements and regulations, and in with a focus on creating in Scotland a genuinely entrepreneurial culture once more.      It is unfamiliar territory for Scotland's governing class but our economic future depends on it.