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Scottish public spending could be forced into unprecedented cuts of one pound in every eight currently being spent, according to the latest independent projections published this morning.

Economists at Glasgow and Strathclyde Universities have run a rule over the numbers in last week's Westminster budget, and arrived at some alarming findings.

They did the same after Alistair Darling's Pre-Budget Statement in November, and concluded there was going to be a squeeze.

But as a result of the Chancellor's latest forecasts - which are seen by most as unduly optimistic - it seems the bad scenario from November has become the good scenario now.

The Centre for Public Policy for Regions has repeated its analysis of three possible/likely outcomes based on Treasury and independent Institute of Fiscal Studies (IFS) figures.

The good news - let's get it out the way, because it doesn't last long - is that low inflation may not make things quite as tight next year. And this year is, by the way, as good as it's going to get, public-spending-wise, at least.

The bad news is that the best outcome would cut public spending by 2.4% in 2011-12, then by 1.4% and by 2.1%.

That assumes a bias in Whitehall spending towards departments that have their roles devolved, meaning less impact on Holyrood's block grant.

The worse projection would have real terms funding cuts of 1.3% from spring of 2011, followed by 1.8% and 2.5%.

That assumes Scotland goes with the UK average reckoned by the IFS on last week's Budget figures.

The worst of the three scenarios has public funding down by 1.7%, 2.7% and 2.8% in consecutive years.

This goes with the IFS assumptions about Scottish spending, and sees falls in cash as well as real terms.

In real terms, that final accounting would require cuts of £1.7 billion, followed by £2.7 billion, and then £3.8 billion, from a budget of just over £30 billion now. That would hurt.

And it dwarfs the row at present over whether £500 million is being taken out of next year's budget (the SNP/Scottish Government view), or less than £400m (Labour/UK Government).

The row there is about when the cuts kick in - while still struggling back into growth or delaying it a bit.

Today's figure look beyond that, to a time when Britain and Scotland should be out of recession and paying off the bills.

There's worse. The Glasgow economists point to the horizon beyond 2013-14, and the UK Treasury's longer-term forecasts.

They also look anaemic, and they will be worsened if interest rates go back up and payments for the national debt take a larger chunk of public spending.

Then, if the UK is trying to debt down from 79% towards the "golden rule" level of 40%, once treasured by Chancellor Gordon Brown, it will have to squeeze spending even harder.

By that time, the bills for demographic change will be getting clearer, with more people retiring, and more older people requiring expensive care.

So how can you continue to freeze council tax, avoid compulsory redundancies, build a new Forth bridge and have a successful Commonwealth Games, while keeping promises on health and education, and the current level of health and social care?

The CPPR recommends a much tougher budget department in St Andrews House as a necessary pre-condition to getting spending under control. But it will also require some serious thought now about five years away, rather than a row only focussed on next year.

According to director Richard Harris: "The Scottish Government now faces unprecedented change in relation to its budgetary future.

"Such a future may therefore require previously unprecedented changes in policy thinking and funding arrangements in order to steer a ay through, while limiting the negative impact on the current level of provision of public services."

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• - What's this?

I could be looking at the contrasting stock market fortunes of big pharma and big airlines in response to the swine flu outbreak.

I could reflect on the news from Boots the chemists that they are mulling a diversification into banking - just as Tesco is doing, and Virgin - using the power of a trusted brand and lots of retail presence to undercut those troubled big banks.

Or there's the demise of the Pontiac car brand, as part of General Motors' restructuring.

Instead, I'm thinking fat, weight, tubbiness and obesity.

Being built for comfort more than speed, the burning question is: can I pin the blame on Mrs Fraser?

This doesn't immediately look like the stuff of business and economy reporting, but my eye was caught by some research being presented at the Scottish Economic Society conference in Perth this week.

Once I'd got past "A time-varying indicator of effective monetary policy conservatism", "The optimal effort level of athletes in symmetric and asymmetric winner takes all-contests" and "Testing for non-normality of income distribution using a quantile modelling approach" (no, no, stick with this, it's quite interesting), the programme for tomorrow sees presentation of a paper on "The role of spouses in influencing the determinants of obesity".

The findings are that men are more likely to be obese as they move up the earnings scale.

This is probably because the supply of labour increases in relation to the rewards, substituting work for exercise and "other weight-maintaining activities".

In econo-speak, this means obesity may be a "normal good".

Not so with women, however. Heather Brown, the doctoral student at Sheffield University whose research has involved analysis of data from the British Household Panel Survey, reckons women are more affected than men by their spouses' attitudes to weight, eating and exercise.

And higher earnings for women seem related to improved weight control - or, to put it another way, conformity to social norms of what is a good weight.

But the most striking finding about women's obesity is that the chances of being seriously overweight are much more likely to be determined by whether they live in Scotland.

On this score, Scotswomen clearly outweigh all the other parts of the UK.

This has an important message for public health, particularly in deep fried Scotland - that campaigns to combat obesity would be better aimed at families and households rather than individuals.

And is Mrs Fraser to blame? No, after all that data-crunching, this looks like confirmation that I should eat better and exercise more.

Credit crunch, bank crisis and recession have raised young people's interest in economics, following serious decline brought on by, among other things, the subject's mathematical complexity.

So a lecturer from London Metropolitan University is telling the Scottish Economics Society of his plans for a way of grabbing his students' attention and making economics more accessible - teaching it through film.

Here's Gharardo Girardi's syllabus, and what the movies can teach:

1. Death of a Salesman - choice of profession, sense of self worth based on economic performance.

2. Grapes of Wrath - property rights, migration, trade unions.

3. Oliver Twist - economics of crime, economics of charities.

4. Rogue Trader / Wall Street - psychology of financial markets, "greed is good" business ethics.

5. Balkanizateur, a Greek film helping explain the efficiency of capital markets.

6. La Terra Trema - An Italian take on poverty and the risks of entrepreneurship.

7. St. Francis / Francis, God's Jester - two Italian flicks about the choice between wealth and poverty.

8. Mother India - Rural financial markets in poor countries.

9. Pride and Prejudice - dowries, economics of inheritance.

10. Ashani Sanket (Distant Thunder) - Satyajit Ray's classic, teaching the economics of famine.

11. Robin Hood - on the morality of stealing from the rich or the state. Dr Girardi recommends the 1973 Walt Disney version.

Any other suggestions?

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• - What's this?

There are more changes afoot at Scottish Enterprise, the Holyrood government's development agency covering the bits that aren't the Highlands and Islands.

After some sweeping changes of the way it operates and what it does, it is publishing a new business plan, not least to show that the agency is doing something helpful to tackle these somewhat changed economic circumstances.

This is in return for the £250 million of Scottish Government cash, which SE likes to remind us is less than 1% of the total Holyrood budget.

The focus has moved from general support for companies throughout its region to specific support for the 2000 or so companies with the best growth potential.

That tends not to include those struggling and failing in the recession.

Those being made redundant have to go to another quango, Skills Development Scotland, to get help in finding new work, while councils have taken on responsibility for local economic development, some of them more credibly than others.

As part of SE's new business plan, there is a sharp cut in what was, for most of this decade, the Big Idea, of supporting emerging technologies to get from research to development stage and prepare them for market.

This plan was put into the Intermediate Technology Institutes, which were set up to handle innovation in energy, techmedia and life sciences.

Between setting up in 2003 and the latest report, for 2007-08, these had launched 25 programmes, completed 11 of them, filed 133 patents and registered only 12 commercial licensing deals.

All this for £135 million.

Perhaps the biggest thing about this big idea was its budget. Or perhaps innovation requires more patience.

Scottish Enterprise's chief executive Jack Perry dispensed with the patient approach and brought the I.T.I.s in-house in January, aiming at least to strip out some top heavy administrative costs and end the embarrassing struggle they faced to find people of ability who can lead innovation and are not promptly lured away to much better-paying jobs elsewhere.

This strategy has led to a sharp reduction, within the new business plan, in the amount of funding for what they like to call Intellectual Property generation.

The emphasis now is to take what they have, and what they can get, making it available as open source resource, and to do better at commercialisation - always the weak point of Scotland's impressive science and technology base.

One of the more interesting areas it is looking closely at in the renewable energy sector is in offshore grid technologies.

Watch this space, even if you have to go sub-sea to do so.

The other striking change for Scottish Enterprise is in its capital spend. It has been allowed to bring forward spending on its pet projects, as part of the fiscal stimulus package.

But that has left a significant gap in following years.

The current year is seeing business infrastructure spend of £65 million.

But next year's is only £10m, and the year after it rises to £28m.

There were some hopes that yesterday's Budget at Westminster might find new money to backfill the capital funding gap.

On the contrary, the public sector capital squeeze looks particularly harsh.

The capital acceleration should help bring forward upgrading of the Scottish Exhibition and Conference Centre in Glasgow, the Fife Energy Park, based in Methil, Edinburgh BioQuarter, centred on the new Royal Infirmary, and Renfrewshire's advanced engineeringing research centre.

But even if SE says it remains committed, the sharp cut in capital spend looks like less good news for, for instance, Ravenscraig's redevelopment, where it proving hard to co-ordinate commitment from troubled development companies.

And with the same general capital picture emerging out of Alistair Darling's budget, what about the other pet projects, in transport for instance, that now look decades away?

If the Forth replacement crossing has to go ahead, don't count on much else for a while, least of all a high-speed rail link between Scotland and London.

The SE business plan is notably vague on its creative industries plans, but much more detailed on tourism.

It gives priority to boosting market opportunities "such as golf, food, mountain biking and sailing", with work under way to develop an "adventure sports strategy".

It also shows that seven honey pots have been chosen as priorities for tourism, in association with industry representatives; Glasgow, Edinburgh, rural Perthshire, Royal Deeside, St Andrews, Loch Lomond and the Trossachs National Park and Cairngorm National Park.

It may be that Highlands and Islands Enterprise is taking responsibility for tourism in Drumnadrochit, etc. But so much for Burns Country in this Year of ³ÉÈË¿ìÊÖcoming.

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• - What's this?

It was billed as a historic Budget, and in terms of its superlatives of borrowing, it didn't disappoint. But how will history judge today's astonishing reckoning?

It has the potential to use Britain's deep borrowing pockets to dig it out of recession swiftly and back onto a sustainable growth path - though it seems quite hard to find anyone who believes that other than people in or very near the UK Government.

Alternatively, it has the potential to turn the corner for the British economy and for Britain in terms of its place in the economic pecking order, burdened by debt for a generation, and turning its back on its reputation as a low tax magnet for the world's super-rich.

It has the potential - no it's stronger than that, it probably will turn the whole terms of the debate on the role of the state in Britain, and how much the public finances can sustain.

Because of that, the stresses and strains of much tighter public spending have the potential to drive a wedge between Westminster and Holyrood. That battle has been coming for some months, and today only served to ratchet it up. This could be crucial to shaping Scotland's constitutional future.

That's despite all the evidence from this Budget and from other data - including today's separate figures on Scotland's gross domestic product, unemployment and retail - that the British and Scottish economy are ever more intertwined.

But in the search for history-in-the-making, there's another facet of this Budget that might get overlooked in the political row, the taxation initiatives and the talk about jobs and greenery.

I was struck by Alistair Darling's explicit setting out of the ways the British economy needs to change. Necessarily, it can't rely so heavily on its finance sector, so he was setting out the areas in which he thinks it can develop deeper strengths, which are allied to his business support choices.

"In future," he said, "the sources of our growth will be more varied - and we need to ensure we play to our country's strengths.

"It will increasingly come from an expansion in investment by businesses in the industries of the future, such as low-carbon, advanced manufacturing and communications.

"These industries, together, are as important to the British economy as the financial services sector."

So in a Budget long on big, scary borrowing figures heading out towards the horizon, and short on other visions of the future, it was striking that at least this one part of the speech sets out a new direction for Britain.

Whether Alistair Darling will have a role in shaping that future from Downing Street... well, the election campaign starts here.

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Slow breaking news: it's taken a while to get there, but at last we can confirm . And how.

The second consecutive quarter of economic decline, in the final three months of last year, shows the pace of decline really picked up on the -0.8% fall in gross domestic product for July to September.

The economy contracted between October and December by 1.7%, according to the Scottish Government's statisticians.

What does that mean? Look at it this way. For every £1,000 earned the previous year, Scots workers were adding £983 in value by the end of last year.

We could live with that. But the alarming bit is the pace of decline, not least because it's faster than the UK figures, which we saw three months ago.

If that same pace continued over the year, it would mean a 6.8% contraction.

We're likely to hear from the Chancellor, Alistair Darling, that UK growth is on target to contract by about 3.5% this year, and that's seen as very bad.

So if the pace of decline at the end of last year were to be continued throughout this year, it would be really dire - close to the figure forecast for Ireland, for instance.

Broken down into sectors, you can see the worst affected by decline were production/manufacturing and construction.

Both fell in one quarter by 4.7%. Extrapolate that figure over a year, and you could see nearly a fifth of those sectors lost.

Services were down by 0.8%.

That includes banking, for which the crisis began during the quarter being measured, and for which substantial job losses have not begun to feed through into the statistics.

The impact on jobs remains not too bad so far.

The new figures are not calamitous, though they are continuing to head in a predictable and bad direction.

They continue to show Scottish employment and unemployment in a better place than the UK average.

The most accurate measure of unemployment was up to 143,000, a rise of 5,000 when measuring the most recent quarter with the previous one.

Those on Jobseekers Allowance were rising faster, up by 6,000 to 119,400.

The really telling comparison is with March of last year. It's risen by 50,600, which means a 42% rise.

All this full year extrapolation of the GDP figures is probably unduly gloomy.

The first quarter of this year looks like it may have been the worst of the recession, after which the negative figures are likely to get slightly less negative, and by some time next year, they should be positive again, as growth is re-established.

This Friday, we'll see if the UK figures for the first quarter of this year are picking up the downward pace or relenting a bit.

And given the global nature of the crisis, it might be worth factoring in some less gloomy news from abroad, which may help boost demand for British goods and services.

There was news yesterday that business pessimism is not quite as bad in Germany, though it has taken a real shock to its manufacturing exports.

And today, there are positive vibes coming from China about its growth rate.

Anything around 6% or below was grim by Chinese standards, and analysts and the central bank reckon it could be getting back above 8%, and close to 11% next year.

That's the kind of downturn Britain could use.

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• - What's this?

What to do with those recessionary blues. For a certain part of society, it's obvious... new shoes or a handbag.

And sure enough, the Scottish Retail Consortium reports this morning that sales of women's shoes and handbags are in Scotland's shops.

But it's most often the kind of fashion goods that can be used repeatedly.

So too for items linked with the improved weather last month, which makes a big difference to sales: garden furniture and barbecue food included.

But it remains a real struggle for those selling those bigger ticket items for the home, including furniture, flooring and DIY - the latter being a category that can be expected to pick up a bit once people have decided they're not moving home and want to do a bit of sprucing up.

The figures from the SRC's survey are positive for all sales, and even for like-for-like, the figures analysts find more meaningful that compare last month's retail space that was open last year.

By contrast, the most recent UK like-for-like figures were just into negative territory.

The other part of Britain that gets its own figures is London, and that has seen a healthy increase in retail therapy, which is at least partly explained by the city's attraction to foreigners who find the weakened pound has made its shops more appealing.

That's just the first part of the economic picture that's getting coloured in with a bumper day of figures today. Of course, is going to be the main event.

But this morning, we'll also be getting the latest unemployment figures. Don't expect them to look too good.

And we'll get the latest on Scottish economic growth, or lack of it.

These figures are lagging behind the UK ones, as they take longer to collect, and it's hard to separate out UK data from the Caledonian variety.

So we'll find out this morning what was happening in the final quarter of last year.

If that was negative, it will be the second successive quarter, as there was a -0.8% contraction registered for July to September last year.

And that means we'll get confirmation of what is already rather old news - that Scotland's in recession.

Why so much economic news on one day? Could it be that Budget day might be a good opportunity to bury bad Scottish economic news?

The man in St Andrew's House assures me that it's not like that.

Government statisticians fix the dates for such announcements well in advance, and in this case before they knew when the Budget would be delivered.

And woe betide the government minister or official who tries to meddle with the statisticians.

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• - What's this?

It's been neglected amid the problems for its larger, long-established Scottish banking competitors, but it's probably the kind of neglect that the Clydesdale Bank rather welcomes.

Under the large wing of the National Australia Bank (NAB) and a partner of Yorkshire Bank, based in Leeds, it has only featured in the public eye of late because of speculation that they might some day get sold off.

The promotion of Cameron Clyne to NAB chief executive, effective from January, has helped the speculation, as he figures out which way to take the bank forward. Its annual figures are out next week, so we will then be able to see test the claims that it has maintained a strong balance sheet through the banking tempest of recent months.

But ahead of then, Mr Clyne has been talking to a couple of British newspapers, with contradictory reports resulting. The Sunday Times had him "probably" offloading his two British banks, but not yet.

"You couldn't say you are going to do X or Y in three years because you have no idea what the market is going to look like," he's quoted saying. "The right thing to do, irrespective of the medium-term strategy in Britain, is to support and grow it. The decision will actually become quite clear at a point when the market normalises".

But the Yorkshire Post this morning puts a different interpretation on what I'm told were the same words - that is, a bank chief should never say never about disposals or acquisitions, but this is a time to build up the Clydesdale and the Yorkshire, to keep them strong, to grow them organically and perhaps to take cautious advantage of the opportunities out there. And no, they're not for sale.

While on that familiar theme of Scottish banks, another interesting Sunday newspaper report has Johnny Cameron, who ran the division of the Royal Bank of Scotland that bought into most of its problems, being blocked from taking on a new senior job in finance.

The Financial Services Authority won't comment on his case. But it is pointing out that it recently announced it is going to be much more robust in its role of approving senior appointments in British financial institutions.

To take a senior and influential role, you need to win the FSA's approval. If you move from one bank to another, that approval transfers. But if, let's say, you left your last job in October, and have only had a very large pension to keep the wolf from the door since then, you have to re-apply for FSA approval.

And whereas it used to be a paper-based, rubber-stamping operation, the most senior people can now expect to face an interview with the regulator.

Watch out for a cracking encounter if Sir Fred Goodwin ever seeks a return to FSA approval.

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There's been less fuss about Tartan Week than we've seen in previous years, perhaps because Alex Salmond has been in China, where there's less Scottish diaspora, so slightly less kitsch.

It's in North America that the celebration of the 6 April anniversary of the Declaration of Arbroath brings on an annual outbreak of tartanalia. And that's where ministers have been more quietly flying the Saltire there over the past week.

Deputy First Minister Nicola Sturgeon and Enterprise Minister Jim Mather have had separate visits to the United States, while Mike Russell, the new external affairs minister, has been in Canada.

In his travels round Ontario, Mr Russell has not only been learning what Toronto can teach Scotland in attracting film-shooting business, but he's been chatting to some local journalists too.

And some of the comments about Scotland's economic and banking sector make for provocative reading.

In Hamilton, we learn Mr Russell said: "I'm intrigued by the Canadian banking system. It's a prudent and Scottish model, but we haven't listened to ourselves."

The Toronto Star newspaper went for a particularly inane line of questioning:

Q: Have you heard of Toronto's Mike Myers?

A: Yes, he's great.

Q: What do you think of his send-ups of Scots?

A: It's quite good to laugh at ourselves. There are a lot of stereotypes in Scotland, like we allegedly have the capacity to drink beyond the normal person and we dress in these funny traditional clothes.

When those stereotypes are exaggerated it's very funny. If most Scots just read the material they would probably be offended, but it's all in the delivery and Mike Myers is very good at the delivery.

So Mike R diplomatically avoided offending anyone there.

But look what he was quoted as saying in Canada's National Post, when asked about the problems with Scotland's banks:

"Had Scotland been independent, I suspect the circumstances would have been different. You've got to remember that the Royal Bank was paying very substantial taxes to the UK Treasury. Had Scotland been independent, we'd have been a good deal wealthier. We would also have had a sovereign oil fund to support us. I don't think the collapse of RBS is in any sense an argument against independence. Indeed, it may be an argument for independence. I think we'd have been able to regulate things in a way that would have suited us better".

Like Ireland, for instance, Scotland's former role model as Celtic Tiger?

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• - What's this?

The blame for the financial crisis should not be heaped on one individual but seen as a collective failure, according to the chairman of one of Britain's biggest financial firms as well as one of those in a lot of trouble.

Gerry Grimstone, chairman of Standard Life and of Candover private equity fund, has told ³ÉÈË¿ìÊÖ Scotland it is wrong for the public to heap the blame on Sir Fred Goodwin, former chief executive of the Royal Bank of Scotland.

"These are collective rather than individual failings," he said in an interview to be broadcast on Easter Sunday.

"The public look at this and find it inexplicable.

"Some astonishing things have happened.

"We have to educate people as to the causes. It's more complicated than saying it's all down to one man".

He went on: "I'm sure they weren't driven by greed, and it's easy now to say they were reckless.

"People get caught up in the spirit of the times. It's easy now to see that spirit has changed.

"But go back to the press comment at the time, and everyone was going along with this.
"It looks dreadful now, and I'm not in any way trying to minimise it.

"As chairman of a big financial services company, I feel very accountable about all of this. It's become a very big job, rightly, being on the board of a financial services company".

Mr Grimstone was speaking in China, during a visit on behalf of Edinburgh-based Standard Life, in which he is accompanying First Minister Alex Salmond.

He said the safety of customers' savings must be top priority in the radically changed future of financiers' responsibilities, and that he doesn't think banks have to be broken up in response to crisis in the sector.

"But the taking of deposits puts a profound responsibility on an institution, and safety has to be paramount," he said.

"It's for the institutions to focus on this. It's a return to more old-fashioned ways, which isn't a bad thing."

In an interview to be broadcast on Radio Scotland's 'The Business', the financier said the impact of the crisis is going to impact profoundly on living standards and on the way the sector works.

He went on: "The financial landscape is going to look very different after this.

"I don't think anyone is quite sure yet how different that landscape will be and what it will look like.

"We're going to have much tougher regulation. Boards are going to have to be alert to their responsibilities. The impact on customers must be forefront in people's minds.

"There's going to have to be a lot of changes in the financial services industry. I think people will become more cautious because of this, and rightly so."

Mr Grimstone is currently seeking a replacement to Sir Sandy Crombie as chief executive of Standard Life.

He said the search is global as much as it is looking internally, indicating that the life assurance company may be looking to expand its horizons.

Could it be Sir Fred Goodwin for the top job?

"I think that's very unlikely," understated Mr Grimstone.

You can hear Glenn Campbell's interview with Gerry Grimstone in special coverage from China on 'The Business', ³ÉÈË¿ìÊÖ Radio Scotland, Sunday 12 April at 10am.

Also available on 'The Business' weekly podcast.

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• - What's this?

If you're lucky enough to have an Easter egg today or over the weekend, spare a thought for the people in the big and complex business that brought it to you.

This was meant to be a good business in a recession, but it's looking less that way now.

The idea was that, in an economic downturn, people would replace their designer label splending splurge of recent years, by seeking simpler pleasures in chunk-sized bites and bite-sized chunks.

Chocolate futures surged to a 24-year high in January, helped up there by indications out of the Ivory Coast that the cocoa crop supply might not be so strong. The London futures market has continued to look relatively healthy - relative, that is, to the Germans.

The so-called "German grind" - referring to the processing of cocoa into butter and cake, which is then made into powder - is a vital sign of how the international chocolate business is faring.

And figures out on Thursday show a drop by 21% in volumes, to 80,400 tonnes. That could make a lot of chocolate bunnies.

It's claimed in Germany that the most prominent problem is a sharp drop in demand from Russia and eastern Europe. These countries are supplied from Germany, with around a third of the European cocoa grind, but sharp currency shifts have hit that trade.

So what's happening to explain strong futures but falling demand? Reuters reports commodity traders' claims that the futures price is driving a sharp increase in stocks, up from a normal upper limit of around 15,000 tonnes to a level as high as 70,000 tonnes now.

The other factor is that the quality of chocolate seems to be falling, in that consumers are opting for lower concentrations of cocoa bulked up with more vegetable oil. Luxury brands are being replaced with supermarket own brands and the like.

Cadbury, the British market leader, remains positive about prospects through the recession, but wary of consumers trading down.

In an annual report published last week, the company also flagged up its concerns that health concerns are going to put pressure on its image, profile and sales, so it's trying to get into what it calls "fortified/functional confectionary" plus "good-for-you" and "wellness" products, encouraging consumers to be "treatwise".

There's also environmental pressure on the market, with Mars, makers of the Galaxy bar, announcing today that the chocolate bars are going rainforest-friendly within two years.

Meanwhile, the big growth area in confectionary is not the brown stuff but chewing gum. Cadbury has nearly 30% of the $20 billion global gum market, behind Mars-Wrigley, and that has been growing at 7% per year over the past four years.

That's got to be bad news for pavements.

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One legacy of the late Jade Goody has been a boost in red-top sales. The media circus that surrounded the very public young death of the reality TV star is the best explanation of the way newspaper circulation figures look.

Published at noon today, the ABC (Audit Bureau of Circulations) monthly data shows a February dip followed by some respite in March, particularly at the cheaper end of the market.

The Daily Record put on about 9,000 sales, or 2.6%, while the Sun and Daily Star did better still.

However, that was the only good news amid the gathering gloom in the newspaper industry, with total circulation down by 6.5% on last year. The Daily Record and Sunday Mail, based in Glasgow, face a journalist strike tomorrow, and more next week, in protest at staff cuts and, as of yesterday, compulsory redundancies.

Behind the industrial conflict is the story of a daily tabloid that has more than halved its once-dominant circulation in less than 15 years. In Scotland during March, it was selling 329,000, down by more than 9% on last year. The Scottish Sun registered 372,000 average sales.

The most alarming figures are from the more up-market (or less down-market) Scottish titles. The Sunday Herald's sales are nearly 15% down on last year, to 42,700. The Herald is down nearly 10% to 60,900.

The Scotsman has fallen slightly less far, down by 8% in a year, but to a worryingly low level just below 50,000. The decline of its stablemate, Scotland on Sunday, is slightly steeper, averaging 62,600 over the past six months.

Compare that with the Scottish edition of the Metro freesheet, which has 126,000 copies distributed each weekday.

It's nothing new to say that papers are in decline, but it's the relative weakness of indigenous Scottish papers that is striking. With Scottish editions of The Sun, The Times and The Daily Telegraph, these are holding on to their circulation figures much more effectively than their native rivals. The Sunday Times in Scotland is not only increasing its share, but also bucking the trend with growing circulation.

Across Britain, the other telling signs of change in the paper market include the push by the Telegraph and its Sunday sister to get people onto subscriptions, so that it relies less on shop sales. But that means well under half the Telegraph's circulation pays full shop price. Likewise, the Express group is only holding up its figures with cut price offers.

The wait continues for the consolidation of titles to begin, with attention focused on the financial position of The Scotsman's owners, Johnston Press. Its share price continues to languish, awaiting the outcome of financial restructuring.

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Two weeks from today, Alistair Darling will be waving his red briefcase on the steps of 11 Downing Street. In interviews, the Chancellor and Prime Minister have been laying the Budget groundwork.

Darling has conceded what we already knew: that his forecasts from last November are now a long way out of date and off course. Gordon Brown is today promising a link between the Budget, economic recovery and 'green collar' jobs.

What else might there be? The Chancellor will want to defend his cut of 2.5% in the rate of VAT, which was the centrepiece of the Pre-Budget Statement last November. It has had plenty critics, not least for its immense cost and lack of targeting.

That size of cut was all that was allowed under European regulations, which put a 15% floor on VAT across the EU to avoid wide, cross-border variations on product costs.

After the Bank of England governor warned against untargeted fiscal stimuli, it is the targeted (and cheaper) variety that is likely to get more attention.

For instance, how about a cut in VAT on restaurant bills from 15% to as low as 5.5%? This option has opened up in the past few weeks, since the European Council of Ministers and Parliament voted to let member states vary their VAT rates on that one sector.

In Britain, the restaurant business is being challenged by people trading down to pre-cooked supermarket meals and pizza deliveries.

The French government was quick to take up the option, having lobbied for it for ten years. It will apply to meals in cafes and hotels as well as restaurants, with the Paris finance ministry trying to ensure that the savings are at least partly passed on to customers. Maltese and Cypriot finance ministers are thinking along the same lines.

What about Mr Darling? The British were allied to the French lobbying operation that got the 'VAT on meals' exemption, but that was mainly so that Britain could apply lower VAT rates on some environmentally-friendly goods and services.

That now looks unlikely to happen as the Germans don't like such exemptions, they have the same veto on this issue that all member states have, and the Berlin government only agreed to the French proposal on restaurants on condition that a block is placed on future VAT exemptions.

This is only one of the innovative measures being used, considered or proposed around the world to respond to the economic and financial crisis.

We should all be familiar with the idea that governments pay people to scrap older, more polluting cars, if they buy a newer, slightly less polluting one.

The proposal sounds green, but the improvements in emissions are hardly decisive, and the calculation tends to ignore the climate changing impact of the manufacturing process. It has a lot more to do with protecting jobs.

It is helping out Germany's troubled motor sector, though that may be because Germans are loyal to their own car brands. The British are much less so, and the idea that it should be tried in Ireland would only help car dealers, who have seen a two-thirds drop in sales.

A typically blunt Australian response to economic crisis is arriving by cheque this week. Anyone earning under 80,000 Aussie dollars (38,600 pommie pounds) is receiving a cheque from their government for 900 dollars (£434), with less for higher earners.

While the government deficit soars, Australians can spend it as they want, all in the patriotic cause of boosting demand for goods and services.

At least as blunt was the Australian federal treasurer's view, expressed on radio earlier today, of what should happen to banks that fail to pass on interest rate cuts. Said Wayne Swan: "They do need a good kick up the bum occasionally".

In Ireland, an emergency budget yesterday sought to make politicians make some sacrifices along with the public, so the number of junior minister posts is being cut from 20 to 15. That's some sacrifice.

The Irish debate on tax is not just about rates but about what the tax base should be. It is partly that the Dublin government has exempted large numbers of earners from paying any income tax.

As of yesterday's emergency budget in the Dail, it is now planning to cast the net wider. It is also that Ireland has depended too heavily on property tax. The collapse of that market has left the country's public finances in a terrible mess.

The most innovative suggested response in Ireland is to tax texts, or what could be called a twitter tax. The idea, floated by the Green Party, is to put a one cent tax on every text message that is sent from an Irish mobile, and on the basis of last year's traffic, the finance ministry could rake in 100 million euros.

It's an unusual kind of regressive tax, loading it disproportionately onto teenagers. But it might give them a rude awakening in learning about public finances - which may be no bad thing, as they're the ones whose future taxes are going to be crucial to digging us all out of the current fiscal mire... boro 2day, pay l8r.

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Here's a conundrum. The UK Government owns 70% of the Royal Bank of Scotland, with that stake set to rise. That much has been confirmed today, with other investors declining to take up the share offer.

As majority shareholder, the government wants RBS to deliver on a recovery plan that should get it back on an even keel within five years. At that point, the government hopes the toxically-tainted financial giant will have gained sufficiently in share price and market capitalisation that the government's share can then be flogged off into private hands, probably in tranches - and, hopes the Treasury, at a profit.

But to get back into profit, part of the RBS strategy is to hack away at its cost base. Even its healthier rivals are doing so, but it has an ambitious target of taking £2.5bn off its £16bn operating expenses within a couple of years.

That's where the conundrum comes in. The government wants a successful bank, but it also wants to protect employment, or at least to limit unemployment. So when one of its own banks announces, as it is doing today, that 4,500 or so British jobs are to go over the next two years, that is an uncomfortable message to handle politically.

The RBS management knows it. It is at pains to work alongside the staff unions - Unite, in Britain, and the European Social Council across continental Europe.

The deal is that the company will do its bit to limit the pain, giving people time to prepare for changes and "look for opportunities elsewhere".

In return, it wants unions to be flexible on people's redeployment in both roles and in location.

That approach probably makes good business sense when your main shareholder is a government run by Labour, a party funded by unions such as Unite.

And it makes political sense not to say where the job reductions will come, as that's where backbenchers start kicking up.

While the cuts from the 'group manufacturing' division - including IT, procurement and the bank's own offices - are large and painful at a time of fast-rising unemployment, it is as nothing to the more macho signals of huge job losses being announced by companies elsewhere, with chief executives eager to impress less socially-sensitive shareholders that they are getting tough with costs and 'headcount' (a term that sounds a bit too close to livestock).

But let's be charitable to the much-maligned bosses of the Royal Bank, for a moment at least.

It may be more than just political pressure. One of the less well-reported elements of last Friday's "stop the public flogging" AGM speech by new chairman Sir Philip Hampton was the appeal to stop flogging RBS front office staff in particular.

They are not being directly affected by today's announcement, but they are the ones who face hostile public and customer reactions to the bank's problems. Average earnings for much of the bank are under £21,000, he told shareholders, and they deserve better than to take the blame for their (former) bosses' failings.

Of course, the employment/profitability conundrum is not the only one.

The other glaring contradiction in what the government shareholder is requiring of RBS and Lloyds is the instruction to boost lending on commercial terms, in tranches measured by the billions of pounds, while at the same time warning there should be an end to recklessness and more understanding for those facing repossession.

And we, the public, are meant to keep spending, at the same time we have to take saving far more seriously.

Talking of which, I almost forgot to wish you a happy new fiscal year, even if happiness doesn't look like it will be a prominent feature of FY 09/10.

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Attention may have shifted to the protesters and broken glass of the Royal Bank of Scotland headquarters in London, but there is still lots of dust to settle on the state of the Dunfermline.

Some of it was settling on MSPs.

At Holyrood, Alex Salmond was saying that £25m of Scottish Government money was "on the table".

It's not clear which table, as Holyrood does not have powers to spend money that way.

And if it had the powers, as Mr Salmond would prefer, would it be able to salvage a modestly-sized building society with immodestly-sized money problems?

If it costs £1.6bn to plug the gap between assets and liabilities, the £25m wouldn't go far towards that.

But let's take another look at that £1.6bn, transferred from Treasury to the Nationwide Building Society.

If you read many media reports of the Dunfermline split and sale, it seems that Chancellor Alistair Darling has put the spin cycle inadvertantly into reverse.

It looks as if the British taxpayer has taken on an unspecified amount of toxic assets - somewhere between £800m and £1bn - while also paying out that £1.6bbn to the Nationwide to take on the non-toxic, happily functioning parts of the Dunfermline.

But it isn't quite like that. The £1.6bn is in lieu of liabilities transferred that are not covered by assets. Most of that should come back to the Treasury.

What is now required is for the administrators, KPMG, running out the payments on toxic assets, or flogging them off for the best price it can find.

That will contribute towards paying off the £1.6bn.

But it is likely to involve losses on the face value of the assets, the size of which depends on the depth of the recession and the patience shown by those administrators and the Government.

Most of the gap that's left should be filled by the Financial Services Compensation Scheme (FSCS).

Once it knows the amount recovered from the book of toxic assets, it will know how much it has to levy from the rest of the financial sector to ensure that individuals with up to £50,000 in savings (twice that for joint accounts) have their accounts guaranteed.

The UK Government has said it will meet any amount above those limits, which could be a "residual" cost in the range of £10m.

(If you're a saver, no need to apply directly to the FSCS. The Nationwide/Government will do that for you, and meantime you can access your funds as normal.)

So is it now the case that the taxpayer will not be paying, as the £1.6bn is paid back?

Almost.

In addition to the "residual" amount, there's a £69m fee being paid to Nationwide as compensation for the risk involved in taking on a building society with inadequate time to check the books for nasty surprises.

But then, think of where the financial sector is going to find the money to pay the FSCS levies; from profits, from shareholders, from returns to savers, from mortgage returns.

From pretty much the same people who happen to be taxpayers.

Such people lose out either way, and the hit on bank and building society profits will depress their chances of getting back on their feet again.

To illustrate the point, the FSCS has just published the levy it is requiring of the sector for the past year. Including five rescues - Bradford and Bingley, Heritable Bank, London Scottish, Icesave and Kaupthing Singer and Friedlander - that is now going to cost other institutions £406m.

It's strange, then, the Chancellor gave the impression he has paid twice to sort out the Dunfermline.

It's also strange that he should let such confusion open the door to his Nationalist adversary, Alex Salmond to argue that the Dunfermline could have been independent, with a totally different reading of the state of its finances.

A further risk in all this lies in the £500m-worth of social housing loans now sitting in a "bridge bank" somewhere in the Bank of England accounts.

It seems unlikely, in the current circumstances, that someone in the busy corridors of Threadneedle Street, London, is going to take time out of shoving quantitatively eased moolah out the door so that credit can be kept flowing to Scotland's housing associations.

So it's important for social housing in Scotland that loan book gets moved on. But who would want it?

It may be tempting for Alistair Darling to turn to Alex Salmond and say: here you go chum, social housing is devolved... let's see you sort it out.

Graeme Dalziel, the Dunfermline chief executive who claims to have "passed the baton" last December, has this week joined the gallery of those who led Scotland's big finances houses into trouble, alongside Andy Hornby, Lord Dennis Stevenson, Sir Tom McKillop and, of course, Sir Fred Goodwin.

(RBS ex-chairman McKillop, incidentally, has today given up his hope of re-election to the board of BP, including its remuneration and ethics committees, for reasons set out in this blog on 24 March.)

But it's striking that in each case, there's been someone at a more junior level with authority to push lending as hard and fast as possible.

At the Royal Bank, it was Johnny Cameron, who parted company with the RBS on the same day Sir Fred stood down. At the Bank of Scotland corporate division, it was Peter Cummings, let go by the incoming Lloyds bosses.

At Dunfermline, the name to watch is Peter Weanie. He arrived at the Dunfermline in 2002, with a blank sheet to define how to go about his business. Directors had decided that margins on traditional lending were too low, and it was necessary to emulate banks by expanding into commercial property.

The strategy wasn't his fault. And the Society seemed happy to push him into the public eye in newspaper interviews, talking up their expansion of lending.

But Mr Weanie seems to have been relieved of his duties last autumn, as those lending chickens flew home to roost, and destroyed the nest.

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