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Best to get the ultra-cheap cider in soon - if that's your preference - before the Scottish Government pushes its price northwards.

Publication of its minimum pricing draft legislation is imminent, and a long consultation has done nothing to placate the drinks industry.

There's a big political battle to come on this one.

The Scottish Government's case for putting a floor on alcohol is that it responds to the requirements of improved health, long-term NHS costs, and the price in crime and disorder of too many people drinking too much too fast.

It seems there's more being added. A ban on advertising, at least in print, and sponsorship - from football and rugby shirts and across much of Scottish culture - could be a power taken under the Scottish government's wing, if it can stitch together a Holyrood majority.

The stakes are high. Alcohol is reckoned to cost the health service £3 billion for illness and injury. Only smoking and high blood pressure do more damage. Add to that £7 billion or so of loss to the economy from lowered productivity.

It's a policy which recently had a bit of evidence attached to it, courtesy of Sheffield University, supporting a minimum price of around 40 pence per unit.

But that's contested, and without convincing evidence on either side, there are plenty assertions coming from the industry that minimum pricing will hurt, and it will hurt Scotch whisky in particular.

That has the ring of a vested interest at work. And a formidably well-focussed lobby it is, fronting the campaign for the industry more widely, as it has huge clout in exports and as an icon of Scotland.

But then, being a powerful vested interest could be the reason ministers are ignoring loud protests from the big distillers.

It's pointed out that few whiskies would be affected by a floor on cheap drink: whisky specialises in premium priced products.

It's also pointed out that those raising prices to a minimum level will enjoy windfall profits, so business ought to welcome this opportunity.

But it's countered from drink producers that they don't expect to see any such windfall - that is much more likely to go to retailers. And the different interests between producers and retailers (notably the big supermarkets) have created confusion around the attempt by business to show it is taking the responsible drinking message seriously.

Drink manufacturers and the on-trade are clearly frustrated that retail is not, as they see it, pulling its weight in this campaign.

Indeed, drink producers are willing to see alcohol prices rise, but they would prefer a requirement that no retailer could price either below invoice cost or below tax - that is, a ban on the attraction of customers by loss leading.

They profoundly disagree with minimum pricing. Why? There's the domestic arguments, such as cross-border leakage, of cheap booze trucked north of the Cheviots. A floor on pricing won't do anything to tackle the rapid growth in risky levels of drinking by more prosperous people: not even the notorious Buckfast caffeine-loaded tonic wine will be affected.

And some producers are concerned that raising the price of cheap drinks towards the level of premium-priced alcohol distorts the market unfairly, stacking it against the more responsible premium marketing strategy.

Then there's the export argument, which is the one that really matters to Scotch whisky. It exports around 90% of its output, and fights a constant battle to break down trade barriers.

The rewards of having done so are considerable, and the rewards of continuing to do so - in India, for instance - could be awesome.

To impose a floor on minimum pricing, the Scottish government would have to use a public health exemption from international trade agreements.

That's possible, but not easy to use, and it's open to legal challenge. If successful, the whisky industry's argument is that foreign governments, under pressure from their domestic drinks industries, will use that as an excuse to put up their own tax barriers.

And in countries such as South Korea, they could use the health argument to differentiate between higher tax on high alcohol content (Scotch whisky) and lower tax on less unhealthy, lower alcohol content (the local distillation).

There doesn't seem much room for manoeuvre from the Scottish government. It could be proposing the advertising and sponsorship ban as a bargaining chip, giving it something it can later negotiate away.

But the minimum price proposal looks increasingly like a policy on which it is digging in its heels - designed to show it is serious about public health and street disorder, no matter how much it alienates the alcohol business.

If a smoking ban was a risky policy that became a badge of pride for Jack McConnell's administration, so too, the SNP could cite this achievement in reclaiming the streets.

Note also that after the battle with Diageo over the bottling plant closure in Kilmarnock, there's bad feeling between these two sides. A suggestion that the government could bury its differences over Kilmarnock in exchange for some help over minimum pricing did not get far.

The impasse between ministers and industry could be resolved by parliamentary arithmetic, in that ministers don't command a majority.

Don't be surprised if an opposition amendment seeks to replace minimum pricing with the proposal to limit prices to no less than invoice cost.

Could that swing this debate? Not if the Licensing Act, as recently introduced, is any guide.

In preparation, it was subject to extensive consultation and gathering of evidence. Passed in 2005, it showed how MSPs can consider the evidence and listen to voices, and then throw all that overboard when it comes to a race, at the final stage of legislation, to see which party can be toughest on aggressive binge drinking.

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• - What's this?

Where are the 5,000 missing businesses that should be in Glasgow?

That's the figure reached by a new economic analysis, underlining the low level of entrepreneurial activity in Scotland's biggest city.

The low level of business start-ups runs in parallel with problems with basic skills, particularly numeracy and literacy across much of its population (while it also has a high graduate rate) and what are called "entrenched levels of worklessness".

Reed in Partnership, a private company that contracts with the public sector for training and recruitment, has run a rule over the city, and concluded that closing that start-up gap should be a high priority for the next five to ten years.

The positive news is that Glasgow's hotel business has done well through the recession, with good occupancy rates and room rates holding up. It's also got the Commonwealth Games on its side.

And a small survey found that 43% of the city's businesses reckon it's holding up pretty well compared with the rest of the UK, while 17% think it's being relatively hard hit.

Another analysis of the city economy, carried out by Slims Consulting, highlights Glasgow's strength in financial and business services, representing 27% of employment and 33% of output.

That makes it vulnerable to the problems those sectors have seen through the recession. But on the other hand, the city's financial strength is in insurance, taking on more esure jobs, as well as 1300 Tesco Bank roles.

Glasgow's manufacturing heritage has now been reduced to only 6% of employment and 10% of output.

And how has it fared in unemployment?

Measured by claimants of Jobseekers Allowance (so leaving aside Glasgow's high levels of incapacity benefit), Glasgow has seen numbers rise by 51% between August last year and this, leaving it only slightly worse off than the average of English core cities, with a lower dole count than Birmingham or Liverpool, and slightly more than Nottingham.

The ratio of claimants to job vacancies does not look good, relative to English cities.

But there's an economists' cautious welcome for Glasgow emerging out of this recession in a comparatively strong position to build on its strengths.

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• - What's this?

There are few sights as evocative of Clyde heritage as a ship launch. But it's a sight you may only be able to see twice more.

When a patrol vessel descended the slipway from the Scotstoun yard on Thursday, bound for Trinidad and Tobago, it was the third last launch planned by the oft-rebranded company we are now to call BAE Systems Surface Ships.

The Scarborough - named after the main township on Tobago rather than the Yorkshire seaside resort - is one of three patrol vessels intended more for intercepting drug smugglers and humanitarian support than force projection through the Caribbean.

It's even designed as the platform for a refrigerated mortuary in case of hurricane relief.

There's one further Trinidadian patrol ship to be finished on the Clyde, and in late summer next year, there will be the sixth and final Type 45 Destroyer to launch at Govan.

For years after that, the only work is likely to be large chunks of the Royal Navy's super-carriers, which will be floated down the Clyde and assembled at Rosyth in Fife.

And then there's the Future Surface Combatant class of ship to follow after that. The intention is not to launch them at all, but to build them either in dry dock or on barges for submersion when the ship is ready.

I hear the excitement, hoopla and drama of seeing a vast ship descending a slipway will soon be outweighed by the risk that it goes horribly wrong and wallops the opposite bank.

Scotland's defence jobs

While on the shipyard theme, one piece of research published by Fraser of Allander Institute this week - in addition to its downbeat assessment of Scotland's recovery prospects - was work on the number of defence jobs in Scotland.

Its conclusion: it's not easy to tell, and if Scotland is to make rational choices about its future defence posture, in or out of the United Kingdom, it needs better information.

It cites analysis for the UK Government showing Scottish military employment had fallen from 19,300 to 12,400 between 1990 and 2007, with civilian employment down by more than a third, from 10,300 to 6500.

That's less than its population share of both uniformed personnel and civilians. And it's heavily biased towards Moray, with its two air bases and Argyll, which includes the Faslane submarine base. Each has around 3,000 service personnel. Edinburgh and Fife have roughly half as many.

In 2006, the defence industry employed 7,300 in shipbuilding, and 4,500 in aerospace.

The supercarrier contract, which represents a large part of the workload in the next six years, would be very expensive to cancel, even in the face of draconian government spending cuts. Around £1bn is already committed.

But other "difficult choices on defence" are looming, writes Strathclyde University economist Stewart Dunlop.

"Given that these choices will ultimately be made by voters, it would clearly assist the public if the political parties would spell out in more detail both what they believe are realistic options and the consequences of these. Neither of these situations seems likely to improve in the near future, but until we have this information, we are making decisions in the dark."
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• - What's this?

What's the most important factor affecting Scottish business in recent days?

The downbeat assessment of economic recovery from Fraser of Allander?
Lloyds TSB Scotland on the market? Mediocre growth in retail sales?

Think again, and look to Asia, where President Obama has been on his travels.

His visit to Beijing did not look an easy one, as the world's two superpowers eye each other warily in trying to find their places in the new world order.

Reckless money

Earlier this year, they found common cause in throwing huge fiscal stimuli into the worst of the crisis.

But now, it is the areas of tension that are of more significance.
Three areas to watch:

• The Chinese are not open about the scale of their foreign reserves, but they're in the $2.3 trillion range. Most of that is held in US dollar assets, and a large chunk in US government bonds
• The Chinese concern is that its investment could be undermined by reckless fiscal expansion and money creation, and the temptation in Washington to let inflation reduce the cost of servicing its debt
• The US concern is that the Chinese remain reluctant to let their currency float. While it remains pegged to the weak dollar, the yuan puts Chinese exporters at a cost advantage. That means China is exporting problems into its trading partners' domestic industries - most immediately those of its Asian neighbours.

If they can't find solutions to these twin problems, one solution with potentially more painful consequences is for America to introduce trade barriers. They recently stepped up the pressure, with big tariffs on tyres and steel pipes.

Currency pressures

Whether China is reckless in undervaluing the yuan, or the US is the guilty party for its fiscal and monetary stances, the danger is of a new set of global imbalances. And as the current recession owes much to the Chinese saving too much and the Americans (and British) building up too much debt, new varieties of global imbalance are not welcome.

One of those imbalances comes from low interest rates in the US and other countries, including the UK. The carry trade, in which speculators borrow at low rates (in US dollars, for instance) and invest in assets denominated at higher rates, is causing growing concern.

It is seen as encouraging unwelcome upward currency pressures on countries such as Brazil and South Africa. The ´óÏó´«Ã½'s economics editor, Stephanie Flanders, offers evidence that the fear of an asset bubble may be overstated, at least insofar as the debt burden is being reduced.

But the economists at Strathclyde University's Fraser of Allander Institute put a new globalised asset bubble of precisely that type among the most prominent concerns facing the Scottish economy.

Malawi's miracle

While I'm scanning international horizons... many Scots take an interest in the special relationship with Malawi - going back 150 years and recently revived.

It's not a country often associated with things going right. But that may be changing.

So it's worth a read of Nils Blythe's report on the , which even sees the southern African country exporting food.

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• - What's this?

Prospects for unemployment in Scotland could be worse.

That's if we were in the 1980s, when the recession was accompanied by a long, painful restructuring of the economy, from which some are yet to recover.

But there's plenty pain in the data out so far this month.

The Fraser of Allander Institute at Strathclyde University reckons on a peak to the numbers seeking work, at some point next year, around 243,000 - two-thirds of them on Jobseeker's Allowance. That's 40,000 up on the most recent (July-September survey) figures.

Its respected commentary, published three times a year, is backed by PricewaterhouseCoopers.

Oddly enough, that management consultancy produced its own figures earlier this month and they look even worse. They see a further rise of 58,000.

No region of the UK is immune, but the PwC figures suggest Scotland's position looks worse than most.

It's on track for a rise similar to Yorkshire and north-east England. Only the West Midlands have a gloomier outlook, and the harsh times for manufacturing mean it already has 10% unemployment.

Stretched elastic

This recession is like no other, in many ways. The Fraser of Allander analysis published today has had to concede that its forecast published last June undershot the 2009 decline, suggesting it would be 2.9% whereas it now looks like 5%.

But apart from the figures, look in more depth at the Fraser of Allander analysis.

Among the significant issues arising is that employers' capacity for stretching their current workforce across diminished amounts of workload has to run out of elastic at some point.

The 8% peak to trough decline leaves a lot of spare capacity not being met by depleted demand.

"The 'flexible workforce' has been cited as one reason for unemployment rates to be lower than had been feared, but the limits to flexibility may be approaching," writes the Institute's Cliff Lockyer.

His work highlights comparisons with past recessions, which are a sobering reminder of the way unemployment tends to lag recovery in the broader economy.

Double dips

In the recession of 1974-75, unemployment continued to rise to 1977, eased a bit in 1978 and then peaked in December 1978. There were then 147,300 on unemployment benefit - not much above the 134,000 level we've already reached in this downturn.

In the 1980-81 recession, the claimant count started rising again in September 1979, and remained on an upward trend to a peak in January 1987. Yes, that's more than seven years of increases.

In 1990-91, Scotland had a softer landing than much of the UK. Technically, it didn't even go into recession, but unemployment rose to a peak in December 1992, at 248,000. It took until May 1995 to get back below 200,000.

Fraser of Allander cites work by another think tank, the National Institute of Economic and Social Research, showing that past UK recessions have never taken less than 40 months (three and a third years) to reach pre-recession levels of output.

In the 1980s and 1930s, it took more than 50 months.

And with the exception of the early 1990s, recessions had "double dips", with the second downturn occurring 18, 28 and 30 months after the most recent pre-recession peaks.

Today's analysis suggests Scotland can expect at least one quarter of decline next year - most likely in the third or fourth quarters. Its more pessimistic projection sees two quarters, which technically means another bout of recession.

And another significant point worth highlighting from Cliff Lockyer's work is the role of unions. The private sector has been able to shed staff and restructure without sparking a widespread employee revolt.

Workplace conflict

But recent postal workers' strikes hint at a different prospect for the public or nationalised sector, as a severe squeeze looms on government spending.

A key factor will be the level of trade unionisation. In 1979, at the time of the Winter of Discontent, 55% of the workforce was unionised, meaning 13 million workers.

By last year, membership was not much above half that, at 6.9 million, and union membership had fallen to 27% of the workforce.

The difference between unionisation of the public and private sectors is, well, striking. In Scotland, union membership ran to 33% of workers. In the private sector, that was 17%, while the public sector stood at 66%.

That's a huge gap.

The questions now: how militant and organised will those unions be in response to cuts: how much of a chilling effect will high unemployment have on those who respond with industrial action: and how well can public sector managers handle the squeeze and avoid workplace conflict?

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• - What's this?

It can't shock many that the budget for the 2014 Commonwealth Games in Glasgow is on the way north, by £81 million.

Big ticket budgets in the public sector have a nasty habit of slipping, and by a long way.

The question for Glasgow, as for the London Olympics, is what the legacy will be after the athletes have gone home.

The plan is for a regenerated area of each city's east end, just as Manchester benefited.

That's why the athletes' village in Glasgow is being planned with a view to transforming it into permanent use as a new housing estate.

The designer specification is for flats and houses that can suit both purposes. And I'm told that the main difference between an athlete's needs and those of the average Glaswegian is their bathing requirements.

According to one of those at the heart of the plan, the village will have an unusually high number of showers in each new home.

Further comment, from me at least, is probably unwise.

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• - What's this?

Professor Donald MacRae has declared a .

The chief economist at Lloyds TSB Scotland is a cautious Black Isler, so he's not saying if it's going to last.

That's probably wise. But at least the most recent Lloyds TSB Scotland price monitor, published this morning, provides some respite from tough times in the property market.

It's showing a rise of 0.7% in the quarter to the end of October. Over the past year, the bank's reckoning shows prices have fallen by 7.5%.

By its figures, there was a wobble in 2007, but the peak was reached in the second quarter of last year, and fell for four consecutive quarters since then.

This adds to evidence recently out from Halifax Bank of Scotland showing Scottish prices down 6.3% between the third quarter of 2008 and the three months to the end of September this year.

HBOS goes on to claim the drop from the UK market peak in the third quarter of 2007 is a 12% drop for Scotland, compared with a UK average of 18%.

It's worth noting there that Scotland has by far the least drop of any region from peak to trough.

Greater London was down 24% and Northern Ireland by 32%, though the most recent year sees HBOS's reckoning on Scotland picking up pace relative to others.

Price wobble

The crucial question is whether we've actually seen the trough, or if there's another one to come after the current steadying of prices.

Another survey for the UK, carried out for FindaProperty.com, last week raised fears that we could be seeing the wobble that could herald the second part of a double dip.

It measures asking prices. In the past, that has been a better indicator of the English conveyancing system than the Scottish one, though there's less difference through this recession.

It found the average Scottish asking prices this month stands 12.5% below last November, at 149,749, while the UK figure is down only 0.6%.

Waiting in limbo

Across Britain, it found a dip for the first time after seven months of rising prices, with £1,000 knocked off the asking price in only a month.

The survey separates out home owners making a move and first-time buyers, and finds the home-movers are worse affected, with a £3,000 dip.

It's worth noting that asking prices may register optimism more than realism, in that the HBOS survey is a long way out of kilter with the online company's survey evidence.

It's also worth noting the concerns I'm getting from the property sector, expressed privately of course: that they're still stuck in limbo and awaiting a further drop.

The feeling is that a combination of factors are holding off a further dip in prices; monetary and fiscal stimuli, the avoidance of repossession even where it's eventually inevitable, and the concern that rising unemployment is going to knock confidence into next year.

First-time buyers

Economic theory would suggest there are three elements that have yet to settle down until the market can come back into equilibrium; how much of a deposit is required, how much lenders are willing to offer as a multiple of household earnings, and how much people expect interest rates to be over the medium-term.

The part of the market that needs watching most closely is the first-time buyers, because they drive transactions further up the price chain, and because they typically start from a simple standpoint of deposit and mortgage, rather than another asset to offload.

So how do these elements stack up? The interest rates are low and showing signs of staying there for a while yet, but not indefinitely.

The lenders' earnings-property price ratio, at least for first-time buyers, fell sharply after the credit crunch crunched last year.

According to FindaProperty.com, it stood at 5.6 times income at the start of last year, and fell sharply from last December, to hit a plateau of around 4.8 times income from April.

The size of deposit is the element that has changed most.

It's not just the disappearance of those notorious 125% Northern Rock mortgages. All the lenders are looking to higher deposits, by proportion of price, than the pre-crunch days.

The average British first-time buyer's deposit at the end of last year was above £70,000, and the most recent figures suggest it's at £58,000.

Affordability gap

In Scotland, that November 09 figure was £28,590, so it's looking relatively very affordable north of the border. The average first-time buyer's deposit across Britain stands this month at 1.8 times income.

In Scotland, it's 1.1 times income, and in London it's 3.5 times.

Across Britain however, that still leaves an affordability gap.

By taking the average first-time buyer, with the average first-time buyer's home price, income and mortgage conditions, FindaProperty.com's number-crunchers have come up with their own "affordability gap".

At the end of last year, the price of becoming a first-time buyer was, on average 2.4 times income across Britain.

The drop to 1.8 times income, according to the November figures, is a big step in the right direction for those who want to get on the property ladder.

But that calculation suggests the market, Britain-wide, is less than half way downwards to an equilibrium price

Reaching that equilibrium price and stability in the market also depends on the behaviour of lenders.

They're under pressure to mend their ways, with the Financial Services Agency suggesting a raft of much tougher requirements before home-buyers can leave the bank with a mortgage in their pockets.

The industry, however, is fighting back.

Well worth noting is a speech made on Friday by Matthew Wyles, chairman of the Council of Mortgage Lenders, in which he suggested lenders and mortgage brokers are being treated by regulators as "the sweetshop owners - or worse, the drug dealers at the school gates - of the mortgage market, enticing innocent consumers in and then getting them hooked, for their own evil, profit-driven purposes".

The Nationwide boss argues borrowers should not be treated as children who don't know what's good for them, and that the industry has a track record of delivering on the lifestyle to which many people aspire.

So requiring lenders to check not only on earnings, but on customers' consumption pattern - as Mr Wyles puts it, of food, booze and fags - he points out this could put up operating costs for lenders (though he stops short of pointing out that such costs are bound to be passed on).

And he suggests that the inability to meet mortgage payments is much more often down to unforeseen circumstances, such as unemployment, than it is down to customers fibbing to bank managers when the loan is taken out.

"The effect of this is that getting a mortgage is going to get slower and more expensive, but for what?" asks the mortgage lenders' chairman. "Who really benefits, and who loses out?"

And he went on to attack "a lack of political honesty" about the implications of a big increase in regulation. Rather than helping competition, Matthew Wyles says it's sure to squeeze the smaller lenders, and building societies in particular.

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• - What's this?

It's not an easy sell for one of Britain's leading utilities: a strong or at least "solid" profits signal, along with a warning of those .

Utilities are easy targets for squeezed customers and tabloid headline writers. But Ian Marchant, chief executive of Scottish and Southern Energy, is unapologetic.

Profit expectations are strongly up, yes - but that's after they took a dive.

He's talking about the forward price for gas on the rise over the next two winters, and it's not looking pretty.

Engagingly bluff, he's also talking about looking for gas assets in the North Sea to secure supply for his nine million customers.

But the most striking message from Ian Marchant, when I spoke to him earlier today, is that he's unhappy about his customers' misuse of the product he sells them.

"I'm fed up with people wasting so much of the stuff I sell them," he says.

Most CEOs would be delighted at customers wasting their output and coming back for more.

Colman's Mustard is famous for building a family fortune on the condiment politely left on the side of plates.

But this is the topsy-turvy world of utilities; largely recession-proofed, on a renewables investment roll, and where companies are under tough regulatory requirements to cajole and incentivise their customers into cutting down on energy use.

Amid the big numbers from SSE today, I reckon the most striking is that the drive to cut gas usage is saving customers an average of £120 per year, or 15% on bills.

For those already watching their smart meters, that's 670 therms down to 550 over a sustained reduction of usage over three years.

That's not just the effect of sharply raised prices over the past 18 months, claims Marchant.

"That's the condensing boiler, loft insulation, cavity wall insulation, people looking at the thermostat and their timer.

"When last did you check your thermostat and time clock?" he asks.

No time to answer before getting a glimpse of life in the Marchant household, where Mrs M last week demanded a review of its heating arrangements, with the clock duly adjusted and gas use reduced.

"That's not price-driven," says the CEO of Scotland's second biggest company. "I'd say it was wife-driven."

Forecasts for the rising price of gas are based on the forward wholesale price.

Now, you can buy a therm for 30 pence. Next summer, it is selling for around 35 pence, even though summer demand is much lower than November.

Next winter, it's at 50 pence, and the winter after that at 57 pence.

SSE's long term supply contracts run out between 2011 and 2013, which is why he wants to lock in security of supply beyond that.

He's been looking at gas assets in the North Sea, just as Centrica was doing when it bought Venture Production.

He's less likely to buy a company than to buy gas fields from an offshore operator wanting to release asset capital for further exploration.

But he hasn't found the right one yet.

Even more contrary is a utility boss asking for toughened regulation than the government now plans.

This has to do with carbon capture and storage (CCS) of emissions from coal-burning power plants.

SSE is planning a £21m trial of new CCS technology in Ferrybridge, Yorkshire, to add to its work with Babcock Dooson in Renfrewshire, on burning coal for pure carbon dioxide capture.

It agrees with the government announcement this week that that new coal-burning plants must be built with all their emissions subject to CCS.

But it says the government doesn't go far enough. SSE wants all coal-burners, including existing ones, to have all their emissions captured and stored after 2030.

The attraction is a level playing field, but it's also explained by SSE (as with Scottish Power/Iberdrola) investing in CCS technology.

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• - What's this?

It's a week that Stephen Hester will be happy to put behind him.

The chief executive of the Royal Bank of Scotland has announced 3,700 job losses from branches and the need for at least £25bn more in government capital injection, taking the taxpayers' share of economic value (though not voting power) up to 84%.

He was told by the European competition commissioner Neelie Kroes to sell large parts of RBS, which he points out this morning cost the UK taxpayer £9bn this week alone in the reduced stock market valuation of our stake.

And now there's a third quarter pre-tax loss of more than £2.1bn, or (as RBS prefers to emphasise) an operating loss of £1.5bn, sharply reduced from the second quarter. Impairments, or losses on loans, seem to be at a plateau, but it's a high one, at £3.3bn for the third quarter.

No huge surprises to any of this. But there's an interesting new message from the RBS chief executive, as he admits the bank is struggling to hit the government's demands for ensuring lending is available to homebuyers and businesses.

He's now pointing out that companies - his customers - are choosing to repair their balance sheets, and that means reducing the level of debt they're carrying. And he points out that's the way it should be.

The USA is out of recession, while companies are paying off debt faster than they're doing in Britain and savings are up. So pushing more credit into the economy may not be the way back to growth, and probably isn't good for us anyway.

There's a new figure from the bank that helps explain what's going on, suggesting the problem in reaching the lending targets is not the lack of willingness from banks, but the lack of demand from customers.

RBS has identified £27bn of credit available to its small, medium and "mid-corporate" customers through arranged overdrafts, which is available, easily accessed, but not being drawn down.

This looks like a big hint to Chancellor Alistair Darling, RBS's majority shareholder: time to re-think those lending targets.

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• - What's this?

"Extremely bleak", says the First Minister of Scotland's public spending prospects.

Alex Salmond today sought to draw a distinction between cuts from either Labour or Conservative governments after the next election, and on the other hand... well, that's less clear.

But expect to hear lots more about the cost of renewing Britain's nuclear deterrent, and what could be done with that money instead.

This was brought on by the report by auditor general on Scotland's spending choices. Robert Black wasn't telling us anything startlingly new - not, at least, to readers of The Ledger.

But his advice carries rather more weight than this or any blog. And you could sense from First Minister's questions at Holyrood that its publication crystallised a definite shift of tone and direction for Scottish politics.

It makes it more difficult for efficiency savings to be used as an avoidance mechanism for difficult political decisions. Robert Black noted that the efficiency savings are being achieved, but they don't go far enough.

And he pointed out that there's still much we don't know about productivity in the public sector - the link between spending, activities, performance and outcomes - without which it's hard to see where and how to improve it.

So the new battleground is in answer to the question of what government should and should not - what it can and cannot - continue to fund for everyone. What should it abandon completely, and where should it means test or target?

Pensions challenge

How, asks Robert Black, will decisions be made between competing priorities, and what will success look like in public service delivery?

Where would it be better to spend now to deliver recurring savings in the future? Have we got the balance right between long- and short-term changes?

Are public service managers doing enough to break down barriers between them, and working in partnerships? Do we have to reshape the organisations themselves, starting with councils, health boards, police and fire boards?

What, continues the Audit Scotland report, are the implications of an ageing workforce for the staffing of front-line services? That's not talking about the cost of more elderly people with growing health demands, but a question that gets at the difficult issue of public sector pensions.

And here's a tricky question, cannily worded: "Does the public sector have a sufficiently flexible workforce to allow jobs to be changed? Is there a need for skills development and an improved understanding with the unions and staff about the needs and opportunities for re-designing how services are provided?"

Those words represent a can of worms for public sector unions, while carefully avoiding talk of job cuts. It holds out the opportunity for service reform without the provocative challenge of a target for slimming the public sector.

Intensive care

Scotland is not alone in facing this question, of course. The rest of Britain has been slow to reach a consensus around the reality of looming public sector spending cuts, but it is ahead of Scotland in its appreciation of the choice between universal and targeted spending - or at least the consequences of the universal approach which has been Holyrood's default for a decade.

And two neighbours are facing language about cuts that is much more brutal than Robert Black's.

Ireland has just been told by the OECD (rich country's economic club) that its problems are likely to require a return to student fees, bigger class sizes, cuts in civil service jobs as well as in civil service salaries.

On Thursday, the finance minister confirmed the country remains "stable, in intensive care" with credit rating agencies bearing down on Dublin. Ahead of a budget in December, the Prime Minister has said public sector pay cuts are inevitable.

Manx advantage

And the Isle of Man has recently been shocked by the imposition of a sudden shift in its tax position, as the Treasury in London sharply reduces its hand-back of VAT receipts.

The island's government budget is being cut by 10% next year and by 24% within two years, without much sympathy from Chancellor Alistair Darling, who sees it as a tax haven.

There may be lessons for Scotland from the middle of the Irish Sea on how to handle big cuts.

But there's another lesson for those hoping to design a change in Holyrood's tax powers: if the Isle of Man is any guide, don't assume the Treasury will help making the transition a smooth one.

That's particularly for those, like the Manx, who use corporation tax to give themselves competitive advantage - precisely the preference of quite a few people in the debate over Scottish constitutional powers.

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As the dust settles on the Great British Bank Heist, with 10% now put on the market by regulators in Brussels, I've been picking through some bits of the wreckage.

In the infamous words of Whitehall spin registrar Jo Moore (where is she now, by the way?), Tuesday was a good day to bury bad news.

RBS took a media hit for its announcement of 3,700 branch jobs getting sawn off, starting next year. But it must have known that releasing the news at 5pm on Monday, the day before the big announcement, it would soon be overshadowed.

In came HSBC on Tuesday afternoon with another 1,700 job losses. And Barclays sneaked in a significant shake-up, though not many casualties, at the top level of its investment bank division.

Lloyds Banking Group, which came out of the European Commission's crackdown rather better than Royal Bank of Scotland, put out an interim trading statement about its third quarter. It didn't get much attention.

The figures on impairments remain astonishingly large. The retail end of the business, which deals with household finances and mortgages, is facing growing problems towards the end of this year and into next, as a result of rising unemployment. That means £2.5bn of losses during this year so far, up from £1.6bn in the same period last year.

The wholesale division, which includes business lending and commercial property, saw £3.2bn of third quarter write-downs, slowing down the rate of flow of red ink from the first half, when there were £9.7bn losses.

While things are getting less bad, look in more detail at insurance, based in Edinburgh and dominated by Scottish Widows, and things look rather uglier. New business on life, pensions and investment sales fell by 27% in the first nine months of the year, when compared with the first nine months of 2008.

Market conditions were "extremely challenging", particularly through independent financial advisers.

Even without counting the £11 bn write down on 'negative goodwill', Lloyds still expects to make a loss this year. This is what chief executive Eric Daniels called a "robust" performance in "challenging" times.

What about jobs? Well, let's quote the Lloyds statement in full, particularly for those who like an inventive euphemism for job losses:

"We have continued to make significant progress in capturing integration related cost savings and £250m of cost synergies and other operational efficiencies have already been realised in the first nine months of the year to support a target for 2009 which has now been increased to £450m. We expect these will represent annual run-rate savings of approximately £750m by the year-end, some £50m higher than our previously announced expected run-rate".

Translated: we're £50m ahead of our very large cost cutting target, with lots of job losses in there.

Friday morning brings the third quarter figures from Royal Bank of Scotland, with chief executive Stephen Hester still bruised by his encounter with first the European competition commissioner and the subsequent stock market reaction.

The other figure that has been overlooked in much of this has been the impact on Britain's public finances. We know that between £30bn and £40bn is being put into RBS and Lloyds to shore up their balances. Even more than that was expected, had there still been a need to insure nearly £600bn of toxic assets.

But because there is a transfer of risk from down the road until a re-capitalisation this year, the impact on the UK government is that its borrowing target for this financial year has just risen by £13bn.

As the target was already £175bn, who's going to worry about another 13?

Or indeed, another £25bn of quantitative easing/new money creation, as just announced by the Bank of England?

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So if we've been right with the speculation, who is going to buy the bits of Lloyds Banking Group and Royal Bank of Scotland that they are being forced to sell or float off?

RBS insurance division looks quite a strong prospect for a float.

It was put up for sale earlier this year, but the only offer at that time would have required RBS to finance it.

That didn't seem to make much sense for a company on a crash diet, so chief executive Stephen Hester walked away.

With the financial market a bit less volatile than earlier this year, the big insurers could be more interested than when it was last offered, particularly if they know it has to be sold.

Even if there's to be no rushed fire sale, that probably gives buyers a negotiating advantage.

Names like Allianz, Generali and Zurich are being mentioned.

Peter Woods, who got very rich by setting up Direct Line nearly 25 years ago, is reported saying he prefers to focus on his current interests - esure and Sheilas' Wheels - doubting that the Direct Line model is well placed to match the growth of price comparison insurance websites.

I've heard the same concern from other insurance analysts.

However, one question nags about floating off a successful insurance division: does that have anything to do with increasing competition in retail banking, or is it merely punishment for being big?

The Royal Bank's RBS-branded branches in England and Wales - numbering 312, to be re-named Williams and Glyn and with a bias to north-west England - have a strong business banking profile and are perhaps the most attractive package of all.

A suggestion from one who ought to know the bank market well, is that they could be a good fit with the Clydesdale and Yorkshire banks, which are owned and run from Glasgow and Leeds as a joint unit for National Australia Bank (NAB).

Clydesdale's response? It said with its annual figures last week that it has been rather good at organic growth in the recent past, and that's how it would prefer to continue.

While NAB would look at opportunities to increase deposit strength and capability it doesn't have, it says that would have to measure up against the options for those organic growth options.

Then there's Intelligent Finance, an online division of Bank of Scotland that employs more than 350 people, most in Livingston, some in Rosyth.

It seems likely Lloyds will attach it to Cheltenham and Gloucester, for the simple reason that it lacks its own banking licence, and getting a new one is not an easy process.

Nor is it cheap. Buying a bank requires not only the capital to buy the business, but a whole lot more capital to sink into its balance sheet.

And as for Lloyds TSB Scotland, perhaps renamed the Trustee Savings Bank on the eve of that venerable Scottish mutual's 200th birthday?

Lloyds clearly won't want its name used by a rival.

Barclays and HSBC might like a vehicle for expanding into Scotland, but it now seems the political pressure is on to ensure the current British big four don't cannibalise each other to retain their dominance.

It could be snapped up by a big foreign bank wanting a foothold in the Scottish market.

Bank of China is one of those that has ambitions, and it's already getting active in the UK mortgage market.

It may also be interested in the RBS network south of the border.

But what about a Scottish consortium? The place to look is to that group of people who fought to stop Bank of Scotland being taken over by Lloyds TSB last year, arguing a great Scottish institution should remain Scottish.

They lost that battle, and Bank of Scotland has turned out to be a lot less great than it looked even then, as the losses on its corporate division have unravelled.

Sir Peter Burt, former chairman of Bank of Scotland, was one of those opposing the takeover.

He says he's not now part of a Scottish consortium to get into the market for these assets.

He has his doubts about the ease of disentangling the Scottish Lloyds TSB network from its larger southern sibling.

But he likes the idea and backs the push for more competition.

Ben Thomson, chairman of Noble Group, is seen as the key mover and shaker in this group of financiers.

He denies he's leading a consortium to buy Lloyds TSB Scotland. But he also supports the idea - very strongly.

"There's an opportunity to get the right structures in place," he told me.

"We can be ahead of the curve, in terms of restructuring the financial services industry to be in a good position to compete in the future."

"It's a huge opportunity. And it's far too important an industry not to put a huge amount of effort into getting it right".

p.s. With details now published, the leaks and speculation got it broadly right, but didn' t stretch as far as the Lloyds sell-off plans.

Between 250 and 300 Lloyds TSB branches in England and Wales are on the market, bracketed with 185 Lloyds TSB branches in Scotland and the Cheltenham and Gloucester.

That creates a new unit with stand-alone potential, representing 5% of Lloyds Banking Group's current accoiunt customers and 19% of its mortgage business.

That scale and geographic reach makes a Scottish consortium bid look much less likely.

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