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Tradition requires you to keep those Christmas cards up for another 11 days before heading for the recycling bin.

But will they be returning next year? Of course they will, but in similar numbers?

Corporate cutbacks have clearly seen a scything of the budget for sending Christmas cards.

Even in the good years, it was increasingly common to find companies promising to donate to charity instead of sending cards, making do with an explanatory e-mail hoping for understanding for this act of responsibly green-tinged generosity. One could hardly complain.

This year, in my experience, businesses couldn't even find it in themselves to donate to charity.

And as Christmas cards are reckoned to pump £50m or so into charity coffers, it's the fund-raisers who could be the big losers if we're seeing the slow demise of the Christmas cards.

It's far from being a catastrophe just yet.

Two years ago, according to the Greeting Card Association's (GCA's) most recent figures, 641 million real Christmas cards were sent in Britain - more than 10 for each person.

And Britain is, I'm told, a truly Olympian world leader in card-sending.

The industry isn't keen to advertise the decline of its business.

But the Post Office reckons on a 10% decline in letters posted this year, including that same scale of decline for its Christmas business (while seeing an increase of 10% in packets from online shopping).

That's in line with the US Post Office, looking at an 11% annual decline.

Lots of us have been sent e-greetings card this season. An estimate of the American e-traffic puts it up by 40% over the past two years, but only around 5% of the total numbers sent.

According to the GCA's Sharon Little, e-cards are much less of a concern these days than the threat from the impact on the business from social networking.

The association members also claim attachments to Christmas tradition will keep us using snail-mail and the kind of greeting you can put on the mantelpiece.

And while Sharon Little reports some signs of a slackening in demand for boxed Christmas cards, she says there is strong demand for much higher value Christmas cards sold singly.

Global leader is Hallmark, with Bradford its UK headquarters, and no fewer than 700 designers, artists, stylists and photographers in its Kansas City HQ.

It even has a US cable channel. And it's one of those responding to the e-challenge by offering its own e-greetings card subscription and using its website to offer a personalised, printed product range.

Its closest US rival, American Greetings, describes itself as a "manufacturer of innovative social expression products that assist consumers in enhancing their relationships".

This week delivered third quarter figures that didn't show much dent from either recession or e-cards.

But its finance director said AG's UK brands - Carlton, Gibson, Camden Graphics and Hanson White - are the most significant worry on his horizon, as Britain's economic recovery looks so uncertain.

While American Greetings employs 21,000 people worldwide, and the two giants represent 60% of the British market, the UK has a large number of small businesses making greetings cards - perhaps 800, of which 400 of them are GCA members.

And of them, 280 are tiny operations, often as lifestyle businesses and photographers' studios, while card-making also counts as a top-ranked hobby.

Put them together, and you're looking at a £1.7bn industry in Britain. Christmas accounts for 43% of the volume and 19% of the value.

And who keeps it going? Women, of course. They buy roughly 80% of Britain's cards.

It makes you wonder how the market would change if men were that dominant. Fewer kittens and poetic schmaltz, perhaps.

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The key question in business after tonight is: how can you improve the productivity of Santa Claus's elves throughout the year, when they face downward cost pressure from globalised outsourcing options?

Demand from children remains high, despite the downturn - known to economists as the inelasticity of inter-generational seasonally-non-adjusted pester power. But even in Greenland, corporate margins are being squeezed.

A surge in demand for elves' work leading up to Christmas is not sustained in subsequent months. Facing cost pressures and having already offshored substantial production to a vast toy workshop in China, here's a plan that might be worth consideration for the Big Man's HR department: sub-contract his elf service to Cairn Energy.

The Edinburgh-based oil prospector saw its share price surge this week, after announcing it has contracted to lease "a sixth generation dynamically positioned drill ship" for exploration next summer off the coast of Greenland. The kit is currently at work in Libyan waters for Hess Corporation.

That drilling schedule brings forward Cairn's previously stated plan by a year, which explains investors' splurge of pre-Christmas enthusiasm.

The drilling season lasts less than six months, and even throughout summer, one of the hazards of working the Disko West field is an attack on the drill ship by randomly roving ice-bergs.

What is required (and I promise I'm not making this up) is a crew of Arctic marine cowboys, who lasso ice-bergs and tow them away from the drill ship.

How much fun would that be for seasonally under-employed elves, when they wouldn't even have to leave home?

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• - What's this?

In the past few hours, Borders joined the recently departed from Britain's high streets, taking Books Etc with it. Gone are Dillons, Ottakars, James Thin, John Smith, and so on.

closed tonight, with 40 more south of the Border. Having employed more than 1100 people, Christmas Eve will be their last day with the company.

Instead, if you're looking for a read as a late Christmas purchase, you could go to Tesco, which is reckoned to have around 5% of the market, or other supermarkets sharing about as much again. You won't find much choice, but you'll probably find this year's big sellers at very competitive prices; Leona Lewis, Paul O'Grady and Jamie Oliver doing America.

WH Smith provides some safe, mainstream offerings in a few locations.
But on the high street, only Waterstone's remains as a significant chain. However, it's using 20th century supermarket retailing techniques to fight a 21st century battle with the virtual world of Amazon.

Founded by Tim Waterstone in 1982, his shops revolutionised British
bookselling: more browsing, pleasure and a coffee bar, and less detective work in finding what you wanted. By 1995, it had driven a big hole in the Net Book Agreement, which until then required all books to be sold at cover price. This was to protect the smaller retailers, and the publishing of more marginal books.

But having changed the booksellling game then, now it is Waterstone's that is being squeezed from two game-changing technological shifts - one towards online retail, driven by price: the other towards digitised publishing. Is it irony, clever marketing or merely a death wish that makes Waterstone's put e-readers into their window displays?

The price of all this cost-cutting may be the book itself.

There's a reason why you get the low prices on Amazon and on the tables as you walk into Waterstone's. It's because those retailers have such market clout that they can squeeze the publishers on wholesale cost.

Amazon can get books for as little as 25% of cover price, which is why they can sell the most popular titles for as little as 33%. Waterstone's can drive nearly as a good a bargain.

The online retailer doesn't have the high costs of a high street presence, carrying stock in many locations, or employing so many (increasingly demotivated) shop staff.

The bookshop's advantage is that it can bundle up 'three-for-two' offers, and charge publishers a hefty fee for the privilege. The books in window displays and the deals you find on those display tables nearest the shop door are not because that's what you want to read, but because the publishers have paid to put them there. Far less stock shifts from wall displays, and at the sharp end of bookselling, titles are quickly removed from display and then from stock if they're not delivering returns.

So it's no surprise that publishers are pulling back on the number of titles, or on the risks they're willing to take in promoting little-known authors.

Celebrity dominates the Christmas market, but even that is being hauled back, as publishers realise the idiocy of selling book rights to newspapers, only to find them strip out the best bits and depress sales. (Admittedly, Sarah Palin's best-selling success in the USA over recent weeks suggests mainstream media coverage can still shift astonishing numbers of books.)

And publishers play it safe. What is today's hot news from the children's publishing world? That the 116-year old Beatrix Potter books are to be refreshed in a new TV animation.

The pressure is all the greater on the smallest publishers. They have least clout in negotiating terms with so few retailers. And Scotland's publishing business, which has long been at the precarious end of the corporate spectrum, depends rather too heavily on the work of Alexander McCall Smith and of the marketing nous of Jamie Byng at Canongate.

The good news could yet be for the independent book store. If Amazon, Waterstone's and the supermarkets pursue a cost-driven strategy, there should still be a niche for those who carry a wider or specialist stock and, crucially, those who provide a passion for books, a knowledge of them and who connect with their local customers.

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• - What's this?

With colossal legal and market power, the Competition Commission has to be whiter than the driven stuff currently whistling past my office window.

So the ruling on BAA's airport portfolio is profoundly embarrassing for it.

In short, the Commission wanted to force more competition into the airports market, by forcing BAA to sell Gatwick and Stansted near London, and either Edinburgh or Glasgow.

Its argument was that the company has too much market share.

More than 6 in 10 British airport passenger arrivals and departures have been at BAA airports, rising to 9 in 10 in and around London (before Gatwick was sold) and 8 in 10 in Scotland.

Today, three members of the Competition Appeals Tribunal unanimously ruled that a member of the Commission panel assessing the case for breaking up BAA could be seen as having a conflict of interest, or "apparent bias", in the language of the ruling.

That's not actual bias. But it looks bad.

You could argue that the links were tenuous. Professor Peter Moizer, an accounting expert at Leeds University Business School, was taking a modest fee (£12,600) from the Greater Manchester Pension Fund in return for strategic advice, and some specific investment consultancy.

Worth £9 billion last year, the fund is a big investor. It handles public sector pensions across many of the services provided within ten local authority areas, by far the biggest being Manchester City Council.

They're the same ten councils that own Manchester Airport Group, which not only owns the Mancunian aerodrome, but also those at Bournemouth, East Midland and a stake in Humberside.

They've also made clear that they're interested in some opportunistic shopping for new airport assets, explictly saying they were in the market for bits of BAA that fall off the carousel once the Competition Commission had done with it.

And the natural place for Manchester Airport Group to look for financing acquisitions would be the neighbourhood pension pot.

So Prof Moiser could have been in a position to drive for the break-up of BAA, to the benefit of a company owned by the same councils whose pension funds he advised, for a very modest fee.

And he pulled out of the Competition Commission process before the final decisions were made.

That's a tenuous link, yes. The odd bit is that he raised the potential conflict of interest when it cropped up seven years ago - yet it didn't seem to be such a big problem this time round.

It's a big problem now, as it's left BAA in limbo, and the Competition Commission unsure whether it can or should try for the ruling by other means.

The tribunal members ruled... "with the greatest reluctance. We have throughout been very conscious of their implications for the Report which followed a detailed inquiry over a period of two years, at great effort and expense to all concerned".

The next step is for a hearing, expected early-ish in the New Year, when it becomes clearer whether the Commission can tackle the airport competition issues again, and if so, how far back in the process it has to go.

With Gatwick transferring out of BAA ownership (before it was forced), and handed over to Global Infrastructure Partners on 3 December, the other interesting thing to watch will be how it differentiates itself from its BAA rival at Heathrow.

If passengers using two major London hubs can see differences in price and the quality of their experience, that would make the Competition Commission's task easier in forcing an eventual sale of either Glasgow or Edinburgh.

The best bit of the news for BAA is that it has more breathing space to find buyers, at a time when asset prices may have recovered a bit. It had argued against the Competition Commission's requirement that the sell-offs in Scotland and London should take place within two years, or else a trustee would be put in place to sell on BAA's behalf.

That's one argument it lost.

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• - What's this?

Meet Mr Elias Elia. He's the chief executive of E-Clear, amongst other roles. One of those other roles is fascinating - of which, more later.

But let's start with E-Clear. That's the company, based in Mayfair, London, which handles credit card transactions for airlines, and which is uncomfortably close to the demise of Globespan and flyGlobespan airline.

To recap - we've been told by its administrator that Globespan was owed around £30m (and I'm told more) by E-Clear. This was money that had been paid for tickets, but which had not been passed on to the airline.

Steamed up

We also know that the administrators think a very large chunk of that, at least half, was money paid for tickets on flights that had already landed. There seemed no clear reason why that money continued to be withheld, after it ceased to carry the risk of being reclaimed.

That's what got Finance Secretary John Swinney steamed up with indignation at E-Clear's role, while being interviewed on Radio Scotland earlier today.

And at last, E-Clear has started doing some responding. It released a statement this afternoon, in which Mr Elia sympathises with those affected by Globespan's collapse. Here it is in full:

"London, 18 December 2009 - The directors of E-Clear wish to express the company's deepest sympathy for the customers and staff of Flyglobespan affected by the airline's move into administration.
Particularly at this time of year it is a distressing situation for all involved.

"E-Clear is committed to working closely with the administrators of The Globespan Group to clarify and address the various complexities around the airline's financial position, so that matters may be resolved as quickly as possible.

"E-Clear's chief executive officer Elias Elia says: 'As one of the world's leading payment card processing companies, we have many years'
experience in the airline industry and we will bring this expertise to bear in pursuit of an equable solution that reflects the interests of all parties'."

And that's all. Obviously, it leaves some questions hanging in the air.

E-Clear and administrators PricewaterhouseCoopers are discussing today what was owed. The credit card transactions company wants to stress that the administrator has not blamed the airline's collapse on a lack of cash flow.

Future risk

What joint administrator Bruce Cartwright did say yesterday was that the airline had sustained a big loss two years ago, and it needed an injection of capital. But in a media briefing, he went on to leave little doubt that the large amount of money owed was the key issue he had yet to understand.

It seems there had been a disagreement between Globespan's (former) management and E-Clear about how much money was owed. Some cash continued to flow to Globespan, but its offer of appointing an independent auditor to adjudicate the dispute was, I'm told, not accepted by E-Clear.

It is also being claimed by E-Clear's PR team that a finance company withholding money from credit card transactions is entitled to continue doing so even AFTER the flight has landed - up to six months later, because there are some circumstances in which an insurance claim can still be made on that ticket.

"In E-Clear's position, it covers its exposure to future risk on flights that may have been cancelled in the past. It's not possible to quantify what claims may come in, so it's necessary to be prudent."

Globespan could no longer get insurance industry cover from July last year - before the collapse of Zoom and XL. So E-Clear's response after that was to insure itself by withholding money for much longer.

Jersey trust

But here we get to the really interesting bit. Earlier this week, Globespan's chief executive, founder and chief shareholder, Tom Dalrymple, issued a couple of statements saying the airline management continued to be in discussion with a company called Halcyon Investments, about an injection of capital.

Halcyon had been in discussions with flyGlobespan going back at least as far as September, which was around the point when others who were interested in investing in the airline pulled out.

What do we know about Halcyon Investments? Not much, except that it was registered as a trust in Jersey during August of last year.

But now that E-Clear has started communicating, we know more about it. It's a group of high net-worth individuals, and as a trust, it does not have directors. One of those investors is informally described as "the lead representative", and is one and the same Elias Elia.

So he was chief executive of E-Clear while it was in dispute with flyGlobespan over a very large amount of money - enough, it could be argued, to explain the airline's financial collapse this week.

At the same time, Halcyon Investment, led by Mr Elia, was negotiating with Globespan management to take over the company, or at least to take a large stake in it.

Could there, perhaps, be a conflict of interest?

The answer: "There were different investors in Halcyon, so any exposure to risk that E-Clear had or has would not have been affected by Halcyon's attempt to secure a future for flyGlobespan.

"E-Clear and Halcyon Investments are two entirely separate entities.
The two companies operated independently".

Really?

Saturday 19 December, 11am

Allbury Travel Group has ceased trading this morning, according to the Civil Aviation Authority. Based in Hertfordshire, it included the brands Libra Holidays, Argo Holidays and JetLife, and flew out of English airports to Greece, Cyprus and Egypt.

More than 100 holiday-makers have been left stranded, and arrangements are being made to bring them home, while there were 4000 forward bookings.

Credit card transactions for buying Allbury Travel Group holidays were carried out by E-Clear.

Allbury Travel Group is a subsidiary of Allbury Ltd, a Virgin Islands company in which the controlling interest is reported to be a Mr Elias Elia.

I've tried to find out more from Mr Elia, but less than 24 hours after taking on a public relations agency to deal with unwelcome E-Clear publicity, the two have parted company. And he's not answering calls.

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• - What's this?

Here's a big number that may explain help why Globespan was grounded last night: £34m.

I'm told that's the amount of ticket transaction cash that was being withheld from the travel company and its flyGlobespan airline by the company processing its online sales.

It's made up of two elements: around £20m for flight tickets that have already been used, and a further £14m or more for flights that were yet to take off.

Here's an explanation. When you pay by credit card, that transaction should insure your ticket against collapse of the airline.

After XL and Zoom went down last year, the insurance industry made it much more expensive for credit card companies to cover that insurance cost.

One solution is for the companies to hold on to the cash until the flights have taken place. Once they've landed, obviously, there won't be a claim on that flight's tickets.

This doesn't operate for all airlines, but since last year, delays in payment became more common as a means of insuring tickets.

So that might explain why E-Clear, the company which we're told was handling flyGlobespan's online transactions, was hanging on to £14m of cash for tickets that had yet to be used.

It doesn't explain why it was withholding as much as £20m for tickets that had been used - transactions which no longer carried any risk.

That's one of the questions we may get answered by the administrators, who are soon to start a press conference in Edinburgh explaining what's been going on.

What does E-Clear have to say about this? Still nothing.

In other developments, the European Low Fare Airline Association has called for the regulator, the Civil Aviation Authority, to do more to control the trading of companies that are known to be in financial difficulties.

The reckoning is that if there are rumbles in the industry, spilling into the media, then it's a bit odd for the regulator not to be doing something about it, perhaps requiring special reporting measures and restrictions on ticket sales.

And the problem has spilled over to, of all places, the Muslim Hajj pilgrimage to Mecca. Globespan had a special contract to shuttle pilgrims between Delhi in India and Saudi Arabia.

So Indian Muslims, who may have blown a lot of their savings on the pilgrimage, may be caught in the desert kingdom. We're told some of the airline's female crew are, and they face tight restrictions in Saudi on where they're allowed to go.

Update 1730 Thursday

Bruce Cartwright at PricewaterhouseCoopers said at the media briefing that the amount owed to Globespan was around £30m. Although the company also needed an injection of fresh capital, he made clear that cash flow was a vital component in the collapse.

And as that outstanding money is clawed back, the joint administrator held out some hope that flight ticket-holders may be able to get repaid around half of what they paid out.

Half is not as good as all of it, of course, and the evidence from past financial crashes for airlines is that it takes a long time to get money to those who are owed it.

In the case of XL, which collapsed in September last year, it has paid out nearly £41m to those owed money, but 8% of claims have not been paid or closed, often while administrators await the original booking documents, including ATOL receipts, which were issued by travel agents.

Meanwhile, 550 people have been told they're redundant today, staff are being brought home, with 60 returning from Delhi, while 100 staff are helping with the wind-down.

A handful of baggage handlers at Glasgow Airport continue to carry the Alba subsidiary's contract to handle FlyBe baggage.

It seems the figure of 800 Globespan employees, given out by PwC last night, was slightly over the top.

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So what did for Scotland's biggest airline? A reckless build-up of debt? Its cost structure too high? Prices being driven down by competitors?

None of these. Yes, it had a rough ride a couple of years back, making a big loss because it had some of its routes wrong.

But it seems it did well to turn that position around, even if it left it with a bruised balance sheet.

Those looking at the business, who ought to know, say it was sound. Debt is under control. Its orders for two of Boeing's new Dreamliners were sensible expansion more than over-ambitious pipedream.

Instead, it was liquidity that did for Globespan - or to be precise, the cash that ought to flow from the company that carries out its credit card transactions with passengers.

This is a business that gets a lot of its payments up front, but these payments weren't making their way into the Globespan coffers. Quite a lot of that money seems to have been withheld by a company called E-Clear, which specialises in credit card transactions for the low cost airline business.

Bosses at Globespan have been in talks over recent weeks with Halcyon Investments, based in Jersey, as a potential investor to keep it going.

And there is at least one report suggesting Halcyon is very closely involved with E-Clear, and its chief executive Elias Elia. The transaction company hasn't returned calls about that this week.

The statements issued by Globespan's chief executive, Tom Dalrymple - carefully cleared with Halcyon and its lawyers - followed weekend reports of a deadline for a funding deal, and the possibility of collapse.

Mr Dalrymple said the funding package was intended to expand the company, when there wasn't much doubt that the only reason it needed an injection of capital was for survival.

The focus of attention now turns to tens of thousands who are out of pocket, with thousands of family Christmas and New Year plans wrecked, as well as holiday plans stretching into next year.

Attention also turns to those who withheld the payments Globespan seems to have been due.

Scotland's the worse off for the loss of a well-liked company.

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• - What's this?

For all the big ambitions of cutting carbon emissions and the talk of Scotland being the Saudi Arabia of renewable energy, there has been one key decision facing the Scottish government that renewables enthusiasts say is crucial to making any progress - a planning decision on the grid connection from Beauly to Denny.

Yet it remains stalled.

The key to unlocking Scotland's huge potential is re-wiring the high voltage grid to get power from remote turbine into population centre.

Upgrading the line between Beauly, near Inverness, and Denny, near Stirling, is seen as the spine of such a scheme to link up the Highlands and Islands.

The plan, from a consortium led by Scottish Power and Scottish and Southern Energy, is to upgrade the capacity of the line more than three-fold, which would require much bigger pylons.

The fact that these would march through some of Scotland's finest scenery is the source of much Beauly-Denny controversy. Some argue alternatives would work, or that the cables could be buried.

After a public inquiry, the recorder's report was handed to ministers in February. They promised to make a decision by the end of the year.

That decision is to be taken by enterprise minister Jim Mather because his boss and planning uber-boss, John Swinney, has constituency interest in the pylons going through his North Tayside constituency.

I'm assured that ministers will indeed reach a decision by the end of this month - so they are sticking to the word of their promise.

However, Mr Mather is not going to tell us what that decision is - which doesn't quite stick to the spirit of it.

The plan is to get a slot in the Scottish Parliament diary for the first week after the New Year recess, to allow for a ministerial statement. Perhaps Mr Mather can use this to explain why it takes ten months to make a planning decision, when it's supposed to be vital to Scotland's energy interests and demanding targets, and when the planning process is supposed to be getting faster.

Asked about this from Copenhagen on Monday, Alex Salmond said this is the last time such a slow process will be used before the new Planning Law takes over on large projects and ought to speed things up.

He told Glenn Campbell on Newsnight Scotland that it was important to protect the decision against the potential for judicial review - which sounded like a sort of announcement that Beauly to Denny will get the go ahead, eventually.

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• - What's this?

... An attention-grabbing headline, so no surprise it comes from the Mad Men of the advertising industry - to be precise, one Simon Francis, chief executive of Saatchi and Saatchi's operations in Europe, Middle East and Africa.

He was talking at an Edinburgh Chamber of Commerce event about handling brands, at a time when others in the industry are more rather concerned with steering through recession than building brand loyalty.

More below about the advertising sector in Scotland.

But according to London-based Francis: "It's been really tough.
Advertising's one of the first things to get hit. It's easy to turn off, easier than people. It's well documented that the UK market has been spectacularly badly hit, 20% down. Across Europe, it's 14% down year on year, and the year before wasn't great either."

Clients haven't disappeared, but they've changed the nature of their expenditure, he says. Some have spent through recession, particularly market leaders. Some have shifted what they're advertising on; banks on savings rather than loans, others on tactical promotions rather than brand.

The name of Saatchi's approach sounds either a bit hippie or a tad sleazy. It's a "super-evolved brand" called "Lovemarks" - the idea that you've got to take the emotional appeal and link it to the rational in equal measure, creating "loyalty beyond reason".

How that applies to the Labour Party, one of Saatchi's clients going into the general election, is something we've yet to see. Its forerunner, of course, was the Saatchi campaign 30 years ago for the Conservatives and Margaret Thatcher, a ground-breaking approach which put the agency on the advertising and political map, in the same way, according to Francis, that the Obama campaign showed the potential for a digital and online campaign.

The Lovemarks approach is pursued by brainstorming ideas in the agency's many teams across international boundaries, creating large numbers of ideas, and then whittling them down.

Even the most likeable ones have to be subjected to "brutal creativity". Hence that term "let's kill some puppies - we've got to be totally ruthless. We love them all, but you have to kill them to get the best of them".

It's not just recession that's changing the industry, of course.
There's also a technological change, which can be an opportunity.
Clients can save quite a bit on advertising spend if they use free media creatively, with viral marketing through Facebook, Twitter and on blogs.

"Our primary medium is people, and all the other media are a means to promote conversation."

And for those who wonder if the life of the advertising exec is the way it's portrayed in TV's retro chic Mad Men, the answer is: not quite.

But as an industry to work in: "It's never been better. The amount of creative opportunity! You can make films, television shows, create your own digital sites, create widgets and gadgets that they couldn't have conceived. Now is the most creative of all the ages, but perhaps the cocktail parties were more fun then".

You can hear more from Simon Francis in an interview on The Business, Radio Scotland, Sunday 13 December at 10am - also available on iPlayer and podcast.

Creative cuts in Leith

Coincidentally, I was looking at the advertising industry in Scotland this week, and it's not got its troubles to seek.

Much of it clustered in north Edinburgh, it has long operated in the shadow of London - which not only dominates the UK, but has a global role alongside New York.

Two sectors from which Scottish agencies have done well have been pulling back sharply on their spend. Predictably, the departure of Halifax Bank of Scotland's headquarters operation has taken a big client out of Scotland. Royal Bank of Scotland is hardly well placed to fill that gap.

Agencies have also won a lot of work from the public sector, but that is now being sharply reduced.

Finance Secretary John Swinney's draft budget has a 54% cut in the strategic communications budget, much of which is advertising spend on public service messages - encouraging you, for instance, to switch off the lights, use your car less, and to stop binge drinking.

That's a cut from £10.8m to £5m. And that's just the Scottish government. The other parts of the public sector, across quangos, are less obvious in their advertising spend, but there's a lot of it going on, from marketing Scottish tourism to fish, meat, water and Business Gateway.

And with the state of the public finances, that £5.8m cut is expected to be only a small part of the story.

A much bigger advertising spender is the UK government - second only to Proctor and Gamble. While others hacked back at their recession ad spend, the Central Office of Information went on a bit of a splurge.
Recent data from Nielsen shows it put up ad spending by 33% since last year, much of that on smoking and drinking messages, and protection against swine flu.

But that's coming sharply down again. Gordon Brown announced at the start of the week that Whitehall's advertising spend is to be cut by 25%.

The Scottish advertising sector has already lost a significant player in the 1576 agency, which went bust last year. Others have quietly been laying off staff, moving to shorter hours and cutting pay and benefits. Barkers went into administration, with few jobs retained under the new ownership of Penna, while brand design agency Navyblue is one of those to be struggling.

Ken Dixon, of the IPA advertising institute and boss of Newhaven says clients are cutting fees and demanding more for less, but he wants to be upbeat about opportunities. He has told the IPA members things are not going to return to the way they've been, so they have to look outside Scotland for new business.

Ian McAteer, of The Union, says the recession meant nothing happening until August, but it has picked up since then.

However, with the public sector cutting sharply, and the private sector recovery uncertain, he fears another dip in the economy would be "extremely bleak".

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• - What's this?

When Mervyn King pronounces, we and the markets listen with due reverence. But we lack such a dignified guv'nor at the pinnacle of the Scottish financial system.

The closest we get is either going to be Professor Brian Ashcroft, of the Fraser of Allander Institute, or Dr Andrew Goudie, chief economic adviser to the Scottish Government.

Doc Goudie has just published his latest quarterly ponderings upon the state of the world, UK and Scottish economy, which I can recommend as a relatively accessible journey through the most recent indicators at those three levels.

Being a civil servant, he's much too cautious to offer his own projections of Scotland's economic prospects. And he urges a lot of caution on those who have, and who suggest Scotland is recovering more sluggishly than the rest of the UK, including the Ernst and Young Scottish ITEM Club, and Fraser of Allander.

Though a lot of this is about caution and the raising of questions, it's worth a look at what he highlights - not least because it's probably what he wants to highlight when he's advising Messrs Salmond and Swinney.

The imminent arrival of much more volatile inflation, for instance, pointing out volatility can be a big problem just as sustained high inflation can be. Rising fuel prices, higher import prices and the return of 17.5% VAT should all give the indices a bit of a kick at the start of the new year.

And what about the toxic debt that the IMF thinks is still lurking on banks' balance sheets?

His analysis stresses that this is not just a recession, from which we'll bounce back, but it's probably "a fundamental repositioning of individual economies within the global economy, and some sectors within these economies".

Does that mean, Goudie pointedly asks, that Scotland should re-orientate itself even more strongly towards the Asian economies that appear to be recovering best?

How should it re-assess where it's comparative advantages lie? He mentions energy and life sciences, but doesn't offer much more of an answer to that question.

This is the strongest message from the economic adviser: "Looking to new trading partners and markets which will lead recovery will be important as we seek to identify future drivers of growth".

He goes on: "It raises the question of whether the Scottish economy needs to reposition in order to seize the opportunities created by adjustment. This involves ensuring that Scottish exporters can benefit from the re-shaping of demand in the global economy, which may involve targeting new markets, particularly in East Asia.

"But more broadly, an assessment needs to be undertaken as to what implications any rebalancing may mean for Scotland's comparative advantages. Ultimately, these comparative advantages will determine the extent to which the Scottish economy will compete within the global economy in the coming years.

"There may also be implications for the future structure of the Scottish economy. Over the past 30 years, (its) structure has shifted towards greater focus on the service sector. If the re-balancing of the global economy involves western economies exporting more goods and services to east Asian countries, then we may witness future growth in export-oriented industries".

With the UK Government moving more swiftly than similar countries to repair the damage to its public finances, Dr Goudie also suggests: "This will have implications on the future performance of the UK economy relative to other countries which have a more supportive fiscal stance" - music to the ears of his political masters in St Andrew's House.

The next week will give us more of an idea how the Scottish economy's performing: the latest Purchasing Managers Index on Monday and the latest unemployment data on Wednesday.

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The Ledger has taken a bit of a break. Happily, this coincided with me doing so too. Even more happily, nothing much happened in Scottish business while we were away - unless, that is, you count the threat of resignation from the entire board of the Royal Bank of Scotland.

Overlooked in much of the furious "call their bluff - let them walk" reaction over their determination to press ahead with large bonuses for senior staff was that the board now at RBS is the board the Government, as chief shareholder, wants there. If they go, it takes away the credibility of the Government's turnaround strategy for the Royal.

Perhaps some have forgotten one lesson from last year was the importance to banking of confidence, and it's hard to overstate the potential consequences on confidence in RBS if the entire board walked.

Underlying the threat was a reminder of the arm's length requirement from Stephen Hester when he accepted his "battlefield promotion" to chief executive in October last year. The condition placed on this was that he had to be able to run the bank on commercial terms.

With the Pre-Budget Report, the Government's crackdown on bonuses has been spread across the entire bank sector, which suggests the RBS board has won that confrontation.

There may be more to come, but one of the dangers of what's happened is the expectation that the Government will feel forced to ignore the arm's length relationship again if it comes under sufficiently intense political pressure to do so.

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On the Pre-Budget report, the Old Grey Whistle Test applied in the ³ÉÈË¿ìÊÖ newsroom - that's to say, the bit that chimes best and most memorably with those listening - was the proposal to give grants to home-owners to replace their old central heating boilers.

On that very limited evidence, this is one green measure that could be a big hit. The downside is that it's only going to reach around 125,000 homes, and none of them will be in Scotland - not, unless, the Scottish Government chooses to use the consequent, and rather paltry £2m of added block grant funds to implement the same scheme north of the border.

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And how much money will that total extra be? The official line was another £23m heading towards Holyrood for next year, as a result of the PBR reckoning. That's what it said in a Treasury press release. But another press release from the Treasury yesterday said there would be "additional provision of £104m for the Scottish Executive (sic) as a consequence of additional provision for UK Government departments".

That's a big difference. The smaller figure seems closer to the real thing. One clue is that the £104m figure has been amended today.

The much bigger number now reverberating around Scottish politics is £814m - the calculation by Holyrood's statisticians of the fall in budget available to Holyrood for 2010-11. The big fall results partly from the £392m fall in block grant consequences from squeezes on Whitehall departmental spending.

Then there is the effect of bringing forward lots of capital spend to this year, 2009-10, raising capital expenditure by £294m this year. But because of the (hotly disputed) decision not to keep that profile going through the tough times, there is a drop in capital spend by £347m starting next spring.

The PBR figures are far from clear about what the consequences will be for the following year, but it looks like next year's figures are a mere taster of what will hit in 2011, and even mores in 2012 and 2013.

The latest from the Institute of Fiscal Studies, looking at the UK picture, is that there will have to be cuts of 6.4% per year in budgets, if health and education are to be protected. The respected think tank can't make much sense of the financial consequences of the Chancellor's promise to protect policing, or at least police numbers.

And if that fall in capital spend looks bad next year, there's little sign of it picking up. Such infrastructure spending is on a downward path from more than 3% of national income before the recession crunched, to only 1.3% in the toughest years of the public finances getting patched up.
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I'm not the first to make the point, but it's worth emphasising, that the more significant budget delivered yesterday was in Dublin's Dail. It's grim for Ireland, and it looks like it may signal the direction of travel for Britain's public finances, after the Westminster election.

Unable to adjust to its financial crisis, as Britain can, by devaluing its currency, Ireland has to be explicit about the country becoming much poorer. Slashing £3.6bn is only the latest of cuts packages, this time requiring the lowest paid public servants to take a 5% pay cut, and the highest paid to lose 15% off their salaries, while (previously generous) welfare grants have also been sharply reduced.

Are the bond markets duly impressed? Not yet. They're indicating there's more pain where that came from.

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