Archives for June 2009

What will happen to the Clyde's two naval shipyards after they've finished building large chunks of two giant aircraft carriers, for which the first steel will be cut next Tuesday at Govan?

The yards have five years of secure work, which is an unusual level of job security for around 4,000 workers, and helpful in getting them through the recession. But there's uncertainty about what follows.

What I've just learned is that the uncertainty is over which of them will close. And it could be both.

A leaked memo from the chief executive of BVT, which owns and runs the yards at Govan and Scotstoun as well as Portsmouth, makes the case for shutting two out of three yards, saying it has already promised the Ministry of Defence that it will scale down its capacity.

The memo argues that shutting two yards will provide multiple savings. It states the that Government has promised to pay the cost of closure, including thousands of redundancies - with a price tag for the taxpayer of between £115m and £165m.

The Government has also piled on the pressure, by refusing to pay the overheads for keeping more than one yard open during future periods when they don't have work. And although there could be £8bn of work coming down the slipway after the super-carriers - for 18 ships in two classes, according to BVT - that is not sufficient to sustain three yards.

So while the shipyards have plenty of work to keep them going until 2014, we are now looking at a strong likelihood that half the Clyde's remaining shipbuilding capacity is going to shut within two years of the super-carrier work being complete. If Portsmouth is the single site chosen to carry on Britain's specialist naval shipbuilding, then both Clyde yards would be forced to close.

Portsmouth, however, is in a weak position if there are to be closures, as I understand it can't build the size of ships necessary for replacement of the Royal Navy's Type 42 destroyers. Only a Clyde yard can now do that.

Apart from Scotstoun and Govan, Ferguson Shipbuilders at Port Glasgow is the only other yard now operating on the Clyde. It is for much smaller commercial ships and it rarely builds hulls these days.

Elsewhere around the United Kingdom, naval capacity has been shut down and scaled back. While the Tyne has some super-carrier work and Merseyside is expected to secure some, Appledore in Devon is at risk as a result of a £110m cost-cutting drive to get the multi-yard super-carrier contract under control. The future of Barrow's yard in Cumbria, owned by BAE Systems, is likely to depend on a submarine-based replacement for the nuclear deterrent.

The leaked memo follows another from the team building the two super-carriers - as also revealed by the BBC earlier this week - warning that the contract has run up an overspend of roughly £1bn before work starts. That's on top of the £3.9bn costing when it was signed off in July last year.

The latest information is contained in a detailed memo circulated within the management team by Alan Thompson, chief executive of BVT. His firm was created from a Government-forced merger of BAE Systems Surface Ships, which owned the Clyde yards, and VT Group (formerly Vosper Thorneycroft) which owned the yard at Portsmouth.

Mr Thompson wrote: "BVT has committed to review its industrial footprint in light of the projected reduction in UK shipbuilding requirements post completion of the CVF (aircraft carrier) programme (current projections show that at the time the MoD requirements could be delivered from a single BVT facility) and MoD has committed to underwrite the necessary closure costs.

"These one-off rationalisation/investment costs are estimated to be between £115m to £165m for redundancies, site closure, environmental clean-up, equipment disposal and asset write-downs. Discussions are under way to agree the specific mechanism by which they will be recovered (e.g. via overheads over an agreed time frame)."

The memo goes on to suggest that the "one-base option" could save £350m to £500m, after the Government has paid for the rationalisation.

The timescale is for BVT to complete its options appraisal by next March, then developing an implementation plan for the preferred option by March 2011. Yard closures would be complete by the end of 2017, with investment in the upgraded remaining yard complete a year later.

However, there remain tensions within the teams that were forced to merge into BVT by the Government as its dominant customer.

Because VT Group was losing money on two naval vessel export contracts, for Trinidad and Tobago and for Oman, most of that work has been moved from Portsmouth to the Clyde, and BAE Systems is fighting over the damage that will do to the joint venture's balance sheet.

Until that can be resolved, it's unlikely the new company can sign off a delayed Terms of Business Agreement, which is seen as essential to the path-breaking new relationship between private sector shipbuilder and the Government.

The negotiations on that agreement also have tensions. Mr Thompson wrote in early May that the MoD's demands were overly complex and verbose, too legalistic and one-sided, and that the purpose of it had been left unclear.

There is resentment at MoD "far-reaching and intrusive" micro-management, insisting on getting involved in all supply chain tenders over £200,000, as well as approval of BVT supply chain strategy and tender criteria.

The corporate and Government sides were also in dispute on the MoD's requirement that a cap be placed on its financial liabilities if it decides to cancel major orders, explicitly including the super-carrier contracts.

The memo makes clear that Portsmouth remains the "irreducible" base port for the Royal Navy, and that plans are being drawn up for a "Pan-Portsmouth" strategy, which would see Royal Navy personnel transferred to BVT in a joint public/private venture providing support for the main surface ships.

Those watching closely what the Ministry of Defence and BVT's Mr Johnston have been saying in public may find these new disclosures come as no surprise. The chief executive has been dropping hints, saying the future for the yards is "bleak" unless BVT can break into export markets.

The key to that is building on the designs for Royal Navy ships and selling versions of them to foreign navies. The British have been poor at doing that in recent years when compared with other European countries, where they win international contracts at the less complex end of the market.

The Government set the framework for this sharp contraction in UK shipbuilding with a strategy for the defence industry published in 2005. It said for the first time that the lower-tech end of Royal Navy shipbuilding could be carried out overseas, only leaving a requirement for the most technically demanding and confidential of weapons systems to be handled using British expertise.

And there's another catch, this time European. Competition rules within the EU have long been waived for countries protecting their arms industries. That has helped preserve Britain's naval shipyards while merchant shipping yards have lost out to cheaper competitors on the Baltic, Mediterranean and in east Asia.

According to the leaked memo, BVT's legal advice is that there is a two-fold threat. One is that the cosy relationship between the MoD and a company that is being given an exclusivity deal on Royal Navy contracts (though not quite a guarantee, whatever the difference might be) is contrary to competition laws. Internal MoD legal advice says there's no problem. BVT's lawyers disagree. The other is that a new European directive on military contracts is being prepared for 2011, and that could force open the market across borders.

The response to the leak from BVT is that the memo was about "worse case scenario planning", even though the yard closures are presented as if that would be a preferred option and would be in line with the exclusivity deal providing future MoD contracts.

According to a spokesman: "BVT Surface Fleet has a solid order book for the next seven to eight years and is in the strongest position that the shipbuilding industry in the UK has seen for a generation. As part of its prudent long-term planning, it considers a broad range of options, including worse case scenario planning. However, it is also planning for and confident in an extremely positive outlook."

The shipbuilder goes on: "To that end, BVT continues to invest in designs, facilities and skills to secure the long-term future of both its Clyde and Portsmouth facilities. BVT continues to win orders both in the UK and overseas and is progressing well with a unique 15 years partnering agreement with the MoD that will further secure that future."

A spokesman for the Ministry of Defence said discussions with the shipbuilding industry are continuing over the consequences of reduced demand for navy shipbuilding. "There will be a need for rationalisation and efficiency measures going forward," he said.

He said it is too early to say which yards could be affected, and that nothing has been decided.

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If we're to hit the 42% reduction in carbon emissions within 11 years - the ambitious target set last week in the Scottish Parliament's Climate Change Bill - there will have to be some drastic action on several fronts.

It's not enough to argue over the need for new nuclear plants.

So today offered two signs that this is the area for both business and government getting more serious about what needs to happen.

Climate Change Minister Stewart Stevenson was setting the target of nearly all public sector vehicles being electric by 2020. That's nearly 30,000 cars and trucks.

He reckons the premium on such vehicles now, of as much as two-and-a-half times the cost of the petrol or diesel equivalent, should come down when they get into that level of mass production.

Labour's response has been to say the minister's plan lacks ambition, and that more should be done to give incentives to the private sector into electrification of cars and trucks.

Meanwhile, with the Queen today officially opening the Glendoe power station above Loch Ness, Scottish and Southern Energy, parent company to Scottish Hydro-Electric, has signalled it's got two very large hydro plants in mind somewhere else around the Great Glen, so far unspecified. Stand by for a planning application.

This has to do with pump storage technology, which uses wind power through the night to pump water uphill, so that the turbines can be reversed and hydro power quickly plugged in when people get up and switch their kettles on - a process known as "splash and dash".

But if we are looking, before long, to millions of electric vehicles being plugged in overnight, those turbines - and lots more besides - may be necessary to charge up the batteries.

Add to that one of the next stages of radical change in the way we use energy. Gas-powered heating for homes and workplaces is a far bigger part of the energy mix than transport or electricity generation, and being a fossil fuel, it's a major polluter.

It's likely we'll see a change to much more electric-powered heating, again depending on a vast increase in renewable electricity generation.

That's where the nuclear debate kicks off again.

And if the Scottish Government's answer is, instead, to plug into Scotland's potential as the Saudi Arabia of renewables, it brings us back to how this can be achieved without power grid upgrades.

The Holyrood Parliament is soon to start its summer recess with the Beauly-Denny upgrade, through the central Highlands, facing even longer delays. It was February when the public inquiry reporter delivered recommendations to Scottish ministers, and there's no sign of their final ruling coming out of St Andrew's House any time soon.

If the ruling means some of the transmission line has to be buried instead of carried on pylons twice as high as those that currently stride through the Drumochter Pass, those supporting the upgrade fear that the process could get kicked back into the planning process and delayed even longer.

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We should all be aware of the demographic challenge facing governments, companies and individuals, as we live longer and fail to save enough for a comfortable living through the latter years.

It would be great if we could follow Sir Fred Goodwin's example, and hand back £213,000 of annual pension payments without having to break sweat in our household budgeting.

But here's something that has the look of a slow burn on another pensions bomb.

Britain's actuarial profession has been looking at the way its members calculate demographic change and life expectancy, and they have concluded that their figures may not add up all that reliably.

The way they project forward the life expectancy for pension savers has depended on modelling going back to 1999, leading to a convention adopted in 2002.

This assumes that the rapid rate of increase in life expectancy up to 1999 could not be maintained at the same pace.

But could they have got this wrong, they're now asking?

They have noticed there continues to be "high rates of mortality improvement".

So the statistical logic of short and medium term projections is that the long term forecasts will require a rapid falling away of mortality.

And despite the (so far) rather limp efforts of the swine flu bug, there isn't much sign of that happening.

Looked at another way, actuaries have been calculating our pensions on the basis of mortality rates drawn from recent experience.

But they are beginning to think that there could be other factors which could better explain what is going to happen to mortality rates in the future, in which case expert opinion and long-term analysis may be a better guide than recent experience.

That's why the profession is setting up something grimly named a Continuing Mortality Investigation.

Some actuaries have already been advising pension planners that the figures might need adjusting.

But watch out for more giant pension fund shortfalls when they all re-calculate our chances of catching up with Henry Allingham.

He's the English First World War veteran who became the world's oldest man, aged 113.

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Where stands Scotland now? We're talking the income and spending balance. Is Scottish oil funding the UK, or is Scotland the subsidy junkie?

And the answer is ... that Scotland would be forgiven for scratching its head and being a bit confused.

That follows publication of the Scottish Government's latest figures, with its own reckoning of income, expenditure, deficits and, in one case, a surplus. (This would have been written sooner, but Sir Fred Goodwin's pension arrangements sidetracked me.)

This is called GERS, the Government Expenditure and Revenue Scotland, begun 15 years ago under the Conservatives.

Few doubt that it was intended then to show Scotland how much it was in deficit, as a way of spiking home rule guns. It has the same potential today, depending on how you want the numbers to turn out.

You can take your pick from the different ways of counting, and the two sides of the constitutional debate - the Nationalist "yes, we can afford to be independent" against the Unionist "no, we cannae" - predictably stress the bits that suit them.

There are no right or wrong answers to this debate. Indeed, there are quite a few answers.

Here are the main ones, and you can decide which make sense to you.

Open to dispute

The big numbers are that Scotland had income in 2007-08 of £45.2bn, and a further £7.3bn in what could be seen as Scotland's oil revenues.

On the expenditure side, it comes to about £53.3bn.

Both sides of the ledger are open to dispute about how they're counted.

(You could stop at this point and note, purely as a matter of interest, that Scotland's revenue comes disproportionately from tobacco and gambling tax, and the aggregates levy, while Scotland raises well under its population share on wealth-based taxes; stamp duty, capital gains and inheritance tax. But it would be best not to stop at this point, in case we lose our momentum.)

The variations on counting this are whether you include North Sea oil revenues, and whether you include capital spending.

You might ask: why not include oil income, if it's under Scottish waters?

But the convention created by the Treasury in the 1970s is that it doesn't belong to any part of the UK, but to "the continental shelf".

Too volatile

The argument used by sceptics about Nationalist accounting is that it's too volatile a source of income, though that's not so much a public accounting assessment as a political argument.

You might also ask: why not include capital? It's money going out the door, isn't it? Well, yes, but it's being spent to leave you with an asset in future, and intended to deliver long-term benefits.

It's simplistic to say capital spending is good and current spending (on services, and primarily public sector wages) is bad. But the kind of deficit you really don't want to run - in countries as in households - is in current expenditure.

So back to the figures. The worst case scenario allocates no oil revenue to Scotland, and forces it to include its capital spending.

The result, for 2007-08, is a deficit of £11.1bn, or nearly 10% of gross national income. Ouch.

Add in Scotland's population share of oil revenue (8.5%) and that falls to £10.4bn.

But give Scotland an oil share based on its sea area and the deficit falls to £3.8bn (2.7% of GDP).

That share of GDP could be seen as significant, as it is within the 3% deficit limit required of European Union members (at least before the recession struck).

That's not a reason to join the euro. It is merely a reminder of the benchmark for modern developed economies running deficits more often than not, in a way that households do well to avoid.

Whopping deficits

Strip capital expenditure out of the reckoning, and you find...

Without oil, the deficit runs to £7.1bn.

With a population share of oil revenue, that falls to £6.4bn.

But if you give Scotland its geographic allocation of oil revenues, this is the one calculation that puts Scotland in surplus - but by only £219m.

(If Scotland were not allocated a population share of the cost of the London Olympics - one of the stranger anomalies of Treasury accounting - you might be forgiven for adding £47m to that surplus.)

These figures represent the third year when the capital-free, oil-max figure has been in surplus. It was in the billion pound area for 2005-06 and 2006-07, following two years of whopping deficits, at £3.7bn and £2.6bn.

And how about a longer-term history of Scottish accounts since oil started to boost government income.

Glasgow University's Centre for Public Policy for Regions (CPPR) takes the figures including capital spend and Scotland's geographic share of oil, finding that Scotland contributed massively to the UK during the 1980s.

Special case

In 1985-86 - not a happy time for the Scottish economy - its net contribution to the UK exceeded £15bn (adjusted to 2003 prices to make the figures comparable).

But from 1990, that was reversed.

There was a peak deficit year in 1994-95 of nearly £10bn.

And while it prefers to use the newly-published GERS figures that put Scotland £3.8bn into the red for 2007-08, CPPR calculates the year just ended will be the first time in 18 years that Scotland was in surplus.

However, 2009-10 will see a return to more than £4bn of red ink, say the academics.

The special case for 2008-09 is explained by Scotland's share of the £12.9bn in oil revenues that flooded into the Treasury, followed by less than £7bn in the current year.

But then, 2008-09 includes the giant banking bailout, which could throw everyone's accounting out of kilter.

Complex dispute

It's yet to be decided if the cost of the bailout will be apportioned to parts of the country.

That matters politically, as the best figures for two decades are on course for publication next year - the final GERS before the next Holyrood elections, and just ahead of the independence referendum the SNP wants in autumn of next year.

In this important, though often complex dispute, one change from 2007-08 is worth noting.

Scotland has been allocated a sharply increased share of oil revenues.

Based on expert analysis of the production and value of output from different parts of the North Sea, Scotland's share had been edging up in recent years from 82% to 85% of the total.

But the faster falling output from the southern North Sea means that Scotland's share has jumped to 93.5% of the UK total.

Without that change, the slim £219m surplus wouldn't be a surplus at all.

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Where stands Scotland now? We're talking the income and spending balance. Is Scottish oil funding the UK, or is Scotland the subsidy junkie?

And the answer is ... that Scotland would be forgiven for scratching its head and being a bit confused.

That follows publication of the Scottish Government's latest figures, with its own reckoning of income, expenditure, deficits and, in one case, a surplus. (This would have been written sooner, but Sir Fred Goodwin's pension arrangements sidetracked me.)

This is called GERS, the Government Expenditure and Revenue Scotland, begun 15 years ago under the Conservatives.

Few doubt that it was intended then to show Scotland how much it was in deficit, as a way of spiking home rule guns. It has the same potential today, depending on how you want the numbers to turn out.

You can take your pick from the different ways of counting, and the two sides of the constitutional debate - the Nationalist "yes, we can afford to be independent" against the Unionist "no, we cannae" - predictably stress the bits that suit them.

Open to dispute

There are no right or wrong answers to this debate. Indeed, there are quite a few answers.

Here are the main ones, and you can decide which make sense to you.

The big numbers are that Scotland had income in 2007-08 of £45.2bn, and a further £7.3bn in what could be seen as Scotland's oil revenues.

On the expenditure side, it comes to about £53.3bn.

Both sides of the ledger are open to dispute about how they're counted.

(You could stop at this point and note, purely as a matter of interest, that Scotland's revenue comes disproportionately from tobacco and gambling tax, and the aggregates levy, while Scotland raises well under its population share on wealth-based taxes; stamp duty, capital gains and inheritance tax. But it would be best not to stop at this point, in case we lose our momentum.)

Worst case scenario

The variations on counting this are whether you include North Sea oil revenues, and whether you include capital spending.

You might ask: why not include oil income, if it's under Scottish waters?

But the convention created by the Treasury in the 1970s is that it doesn't belong to any part of the UK, but to "the continental shelf".

The argument used by sceptics about Nationalist accounting is that it's too volatile a source of income, though that's not so much a public accounting assessment as a political argument.

You might also ask: why not include capital? It's money going out the door, isn't it? Well, yes, but it's being spent to leave you with an asset in future, and intended to deliver long-term benefits.

It's simplistic to say capital spending is good and current spending (on services, and primarily public sector wages) is bad. But the kind of deficit you really don't want to run - in countries as in households - is in current expenditure.

So back to the figures. The worst case scenario allocates no oil revenue to Scotland, and forces it to include its capital spending.

Join the euro

The result, for 2007-08, is a deficit of £11.1bn, or nearly 10% of gross national income. Ouch.

Add in Scotland's population share of oil revenue (8.5%) and that falls to £10.4bn.

But give Scotland an oil share based on its sea area and the deficit falls to £3.8bn (2.7% of GDP).

That share of GDP could be seen as significant, as it is within the 3% deficit limit required of European Union members (at least before the recession struck).

That's not a reason to join the euro. It is merely a reminder of the benchmark for modern developed economies running deficits more often than not, in a way that households do well to avoid.

Strip capital expenditure out of the reckoning, and you find...

Without oil, the deficit runs to £7.1bn.

With a population share of oil revenue, that falls to £6.4bn.

Contributed massively

But if you give Scotland its geographic allocation of oil revenues, this is the one calculation that puts the country in surplus - but by only £219m.

(If Scotland were not allocated a population share of the cost of the London Olympics - one of the stranger anomalies of Treasury accounting - you might be forgiven for adding £47m to that surplus.)

These figures represent the third year when the capital-free, oil-max figure has been in surplus.

It was in the billion pound area for 2005-06 and 2006-07, following two years of whopping deficits, at £3.7bn and £2.6bn.

And how about a longer-term history of Scottish accounts since oil started to boost government income.

Glasgow University's Centre for Public Policy for Regions (CPPR) takes the figures, including capital spend and Scotland's geographic share of oil, finding that Scotland contributed massively to the UK during the 1980s.

Peak deficit

In 1985-86 - not a happy time for the Scottish economy - its net contribution to the UK exceeded £15bn (adjusted to 2003 prices to make the figures comparable).

But from 1990, that was reversed.

There was a peak deficit year in 1994-95 of nearly £10bn.

And while it prefers to use the newly-published GERS figures that put Scotland £3.8bn into the red for 2007-08, CPPR calculates the year just ended will be the first time in 18 years that Scotland was in surplus.

However, 2009-10 will see a return to more than £4bn of red ink, say the academics.

The special case for 2008-09 is explained by Scotland's share of the £12.9bn in oil revenues that flooded into the Treasury, followed by less than £7bn in the current year.

But then, 2008-09 includes the giant banking bailout, which could throw everyone's accounting out of kilter.

Complex dispute

It's yet to be decided if the cost of the bailout will be apportioned to parts of the country.

That matters politically, as the best figures for two decades are on course for publication next year - the final GERS before the next Holyrood elections, and just ahead of the independence referendum the SNP wants in autumn of next year.

In this important, though often complex dispute, one change from 2007-08 is worth noting.

Scotland has been allocated a sharply increased share of oil revenues.

Based on expert analysis of the production and value of output from different parts of the North Sea, Scotland's share had been edging up in recent years from 82% to 85% of the total.

But the faster falling output from the southern North Sea means that Scotland's share has jumped to 93.5% of the UK total.

Without that change, the slim £219m surplus wouldn't be a surplus at all.

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It's a familiar battleground: how would Scotland have fared as an independent nation with North Sea revenues all for itself?

And it's a battle being rejoined with a new ferocity. That's because oil prices are proving volatile, offering lots of new evidence to fuel both sides of the argument.

And there's a new political momentum. There will be two elections in the next two years, the first for Westminster and then May 2011 for Holyrood. And the SNP administration hopes to have an independence referendum in November of next year.

For those campaigns, the oil numbers matter. This afternoon, the Scottish Government's chief economic adviser, Andrew Goudie, is to publish his analysis of the surplus/deficit of Scotland's public finances. Ahead of that, the Labour-run Scotland Office has published its own analysis of what difference oil might have made since the Forties field taps were turned on in 1975.

There's a lot of big numbers. Boiled down, and according to the Scotland Office:

If all North Sea oil revenues had been allocated to Scotland, there would have been a surplus in Scottish public spending in only nine years out of the last 27.

The total deficit since 1980-81, when the Treasury coffers began to bulge with North Sea revenues, would have built up to £20bn.

This UK Government take on the public accounts then looks at the SNP's argument that Scotland could have put its oil revenues aside in a trust fund for investment, as the Norwegians have done very successfully.

The Scotland Office makes the point strongly that putting money aside means the same pounds can't be used for current expenditure. So of course that makes Scottish finances look much worse.

By that calculation, Scotland would have faced a fiscal deficit every year, totalling more than £150bn over the past 27 years.

So how about feeding oil revenue into the fund once the current budget was balanced? We're back to those nine years when there was a surplus.

The response from the SNP administration in Edinburgh? A combination of ridicule and contempt for Jim Murphy, the UK cabinet member they call "the Secretary of State Against Scotland" (a line I first recall being used by comedian Arnold Brown about Michael Forsyth circa 1995).

The counter-argument ... North Sea oil has pumped £270bn into the UK Treasury since it started flowing.

There is a claim that £30bn is expected to come out the North Sea, in the next five years, but it's not clear what oil price that assumes.

There's also a claim that more than half the value of the North Sea is yet to be extracted. That also makes big assumptions about oil price and about the cost of incentivising exploration and production from mature fields.

That is, in order to keep companies active as the North Sea becomes less profitable, they want bigger tax breaks.

The Nationalist case is to question why Scotland is expected to run surpluses every year when the UK Treasury has failed to do so in 21 out of the past 27 years.

By the same calculation of accumulated debt over the past three decades, it is pointed out that the UK has borrowed around £500bn in total.

And given that Alistair Darling is on course to borrow more than £700bn from this year until 2014, his colleagues may not be in the strongest position to lecture political rivals on running surpluses.

So why are they so keen to take on the Nationalist argument right now? Could it be that Dr Goudie's figures, based on last year's oil price, with the highest ever revenue from the North Sea pushing Government revenues close to £13bn, could make Scotland's finances look rather healthy?

We'll find out in a few hours.

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You would have to be in the retirement zone to be able to remember the last time inflation was in negative territory.

That was in the late 1950s, when Harold Macmillan was telling Britain "you've never had it so good".

You may, of course, have been displaying an unnatural childhood fascination with economics, in which case I apologise for being so ageist.

But if you're finding life is rendering you chronologically-enhanced, you may find inflation is not as low as it's reported.

The headline figures show the consumer price index, at 2.2%, getting closer to the Government's target of 2%.

Strip out housing costs, including mortgage payments, and you find the retail price index edging up from its dangerous deflationary territory, but still at minus 1.1%.

However, that's just the average. Quite apart from statisticians habit of confusing us by seasonally adjusting, you can also adjust for age.

By calculating the average balance of spending for different age groups, you can get to an inflation rate for the elderly and for younger age groups.

And inflation, over the past year or so, has been particularly punishing for older people, as they spend a larger share of their income on electricity, gas and food.

Although the worst of those spikes are over, for now at least, there is still inflation feeding through in those commodities.

Alliance Trust, the Dundee-based asset manager, tracks how inflation looks to those of advanced years.

It reckons the oldest age bracket spends 7% of its income on electricity and gas bills, whereas those under 30 spend only 3% on household energy.

With food inflation still running at 8%, the over-75s are thought to spend 16% of their income feeding themselves, whereas the under 30s spend only 9%.

The under 30s spend a higher share of their income on clothes and electronics.

Their threads take up 6% of their budgets, whereas the elderly spend only 4%.

Over the past year, the price of clothes has fallen by more than 9% and audio-visual goods are down 12%.

Allowing for that different basket of goods and services, Alliance Trust researchers found the inflation rate falling for the over-75s, but it's still far above the level for those under 30.

The May inflation rate for senior citizens was at 3.6%, down from the April figure of 3.9%.

Aged 65 to 74, the inflation rate was eating into pensions to the tune of 3%.

And to that pain can be added the impact of the past few months of rapidly falling interest payments for those who rely on savings.

According to this same analysis, the most recent figures show the under 30s facing inflation at only 2.1%, just below the all-age average.

Shona Dobbie, head of Alliance Trust's research centre, says the gap continues to cause concern, "as this clearly highlights the extent to which the elderly are not reaping the same benefits of easing prices".

Last autumn, however, there was much more room for concern.

With the energy and food price spikes feeding through to worrying levels of inflation for the whole economy, the under-30s faced 5% inflation, while those over 75 were nearing 8%. It made for a particularly cold winter for some.

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I'm at Gleneagles - somewhere I haven't been since Tony Blair and Bob Geldof were finding a strange common cause, and George Bush was putting a Strathclyde police officer in hospital after losing control of the presidential First Bicycle.

I'm listening to John Dane III, an American builder of hyper-luxury yachts, talking about the new era of inconspicuous consumption, and the challenge of building products that are inescapably conspicuous.

Quoting a client with a fuel tank of more than 20,000 litres, on filling up in Monaco: "I've never finished a trip to the Med where the cost of the fuel was more than the cost of the wine, so it doesn't matter."

"A lot of these people think of these mega-yachts as the castles of the 21st Century," he suggests.

"They make a statement, they're very personalised, they're very safe ,and they're an experience the whole family can do."

He hasn't taken a yacht order since last September, and doesn't expect the market to return for a couple of years.

The occasion is the Forbes Chief Executive Officer Forum, where the business magazine that prides itself on its corporate/family links back to New Deer, Aberdeenshire, is taking part in the Homecoming Scotland programme.

It's finding that the old turf still has all the kitschy old brand images, but that it's being run by Scottish Government ministers and quango bosses pushing hard at a message about technological innovation.

Steve Forbes, patriarch of the business clan since the death of his father Malcolm, was interviewing Alex Salmond this morning, with a strong focus on the former presidential candidate's fixation with tax-cutting.

The publisher got close to a pledge from the First Minister to set up a new prize for technology, following up on the well-trailed Saltire Prize for renewable energy research and development. Expect a life sciences prize in the next manifesto. The Dolly Award, perhaps?

Mr Salmond wasn't biting on the idea of a flat tax, however. But he was delighted to have the idea of independence described as "neat" by the US conservative.

On the day the Calman Commission delivered plans for future tax powers at Holyrood, Forbes pointed out that it was the tax issue led to American independence, so why not Scotland?

Amid various conference sessions for Forbes' gathering of corporate bosses, the session on future technology has been perhaps the most illuminating.

Among the Next Big Techie Things, Ron Tolido, chief technology officer from Capgemini, suggests the way of the future could be found by following Google's recent launch of a social networking tool, linking email, instant messaging, blogging and video, its launch eclipsing that of Microsoft's new search engine, Bing.

From the Danish bio-science chief executive of Novozymes was a future of bio-ethanols created from agricultural waste, turning the production of fuels on its head, at least geographically.

No more, says Steen Riisgaard, an oil-based energy economy that puts refineries where large ships can dock and land oil. In future, the refineries will be repopulating America's corn belt and Brazil's sugar belt - though not much discussion of the impact on food prices of diverting crops.

Perhaps the most significant change for consumer electronics, according to Warren East of digital corporation ARM, will be more flexible screens, to move away from the laptop inflexibility I'm looking at as I type.

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The Scottish Parliament is on course to have sweeping/far-reaching/dramatic changes to its powers under plans to be published this morning by Sir Kenneth Calman and his constitutional commission.

It'll be a revolution in relations between Westminster and Holyrood.

That's how it looks if you believe the Sunday papers.

And why wouldn't you? They had been briefed ahead of the event, and added the familiar journalistic topspin with which I was once plying their trade.

Great is the sense of anticipation about Holyrood being able to set stamp duty, and target those buying big houses. Half of income tax revenue could come to Holyrood.

MSPs could decide on air passenger tax, landfill tax and aggregate tax. And they would be able to set the legal limit of alcohol in drivers' blood.

Well, let's not get ahead of ourselves.

These are suggestions from a commission that has found, as others did before, that tinkering with constitutional powers, and tax powers in particular, is mighty tricky.

Given that they are intended to preserve the integrity of the United Kingdom, you could assume that they would have to find favour at Westminster.

And the appetite for some of these changes has been very limited on the banks of the Thames, especially among those who see powers heading out of their Parliament.

What gives the Calman proposals, much more potent is the new-found appetite across parties at Westminster to be leading a revolution of some sort, in response to the political catastrophe that is their expenses.

Sweeping constitutional change is being welcomed, even where it has nothing whatsoever to do with "flipping" second homes, duck houses or excessive furniture requirements.

That's what makes today's proposals interesting from a political point of view.

And as one whose job it is to follow the money, I offer one starting observation about taxation powers.

In focussing on the political and constitutional issue of tax accountability, there is a danger of repeating the mistake of the original "tartan tax" 3 pence in the pound, as approved in the 1997 referendum.

It was a blunt instrument then, and quickly became obsolete, as the Labour Chancellor, one Gordon Brown, tinkered with tax thresholds and credits.

The lesson is not to treat the tax system as static.

It is dynamic, changing every year and sometimes within fiscal years, and it is not only the Treasury that makes it so.

Particularly with the recession, there are reminders that the tax base keeps changing, sometimes alarmingly.

The dependence of the UK Treasury on corporation tax from the financial sector has been exposed. So too its reliance on income from the property bubble.

With a much less profitable finance sector, and property unlikely to return to runaway inflation (let's hope), one task for the Treasury is to move to a tax base that is more reliable in the circumstances Britain faces now and in the future.

Other parts of the tax base come and go. Alcohol tax had to be lowered, because of leakage from the system resulting from cross-border traffic, or booze cruises.

Gambling tax has had to be reformed to take on the challenge of international online betting. Environmental concerns have opened up new streams of revenue.

This is far from being only a British concern.

In Ireland, with even more acute tax revenue problems, the dependence on property tax has left it badly exposed.

And while the days of buoyant tax revenues allowed finance ministers in Dublin to raise the threshold for income tax in a progressive way, it now looks as if the net will have to return to a broader (lower) range of earnings.

So beware the simple calculations for Holyrood of taking a population share of recent tax take.

Keep the buoyancy of tax revenue in mind - that is, the extent to which part of the tax base can increase, decrease, or even disappear.

And if a government faces uncertainty in its tax take, it has to have the capacity to plug unexpected revenue deficits, with borrowing powers.

The SNP, of course, would like Holyrood to have the full range of tax powers.

It points out that you don't have to invent a new tax system from scratch, when there are plenty other systems around the world with lessons to teach the UK and Scotland - and many of them are within the federal structures of a stable nation state.

So let the battle begin once more, between the different fiscal options on offer; autonomy, freedom, devolution, responsibility, federalism or, less likely, the procurator variety - so named, I've been told, because Scotland's prosecuting authorities long ago funded meagre public services by collecting criminal fines.

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Scotland's population problems look like they're set to return.

There was a long term decline, established over the past half century, which might have taken the nation below the five million mark by this year, with a growing imbalance between working age, tax-paying people and those who depend on their taxes.

But an upturn in the birthrate and in net inward migration (more people coming in than going out) has helped turn that around, over the past five years.

It may be that people have listened to politicians' concerns, and started having more babies.

But it seems more likely the improvements in population trends come from an influx of young migrants from the A8, ex-Communist nations that joined the EU in 2004, the largest of which was Poland.

But there have been significant returns. Unlike old-style emigration, when the ship back from Australia was a significant cost, Poles can get on a Ryanair flight for less than a day's wages, and be back with their families by lunchtime.

Anecdotal evidence from talking to those who know Scotland's Polish community well indicates that around a third have settled in Scotland, a third have gone home, and a third are reviewing their future in light of the recession.

Going back to Poland provides more of the social support that makes it easier to ride out the recession and unemployment.

And it's possible these recent migrants are moving away from hostility to migrants in Britain, as witnessed by the vote for the pro-repatriation British National Party last week, and the UK Independence Party, which argues for a block on continued migration and an end to free-flowing European labour movement.

That Scottish immigration upturn might explain why we haven't heard so much from the Scottish Government about that population challenge.

On Newsnight Scotland last night, Jack McConnell, the former Labour First Minister who built a cross-party consensus in favour of more immigration, challenged his successor to keep the pressure on.

And Mike Russell, the Scottish Government's international relations minister, took up the challenge, saying the SNP administration remains committed to the cause, and would like to get away from the constraints of the UK immigration which, he said, is driven by the demands and strains in the south-east of England.

According to the minutes of the SNP Government's Council of Economic Advisers, ministers are being warned they have a tough task if they are to hit their target of matching the average population growth for western Europe over the next ten years.

Even with the Polish boost, Scotland has had around 13,000 added to its population in recent years, while it will need around 24,000. And if the Polish migration is going into reverse, that target is getting more distant.

It shouldn't be a surprise, according to Professor Robert Wright, a demographic expert at Strathclyde University.

The Poles, and other central Europeans, were typically over-qualified for the jobs they've been doing, and it was unlikely they'd want to stay in Scotland (or England, or even more conspicuously, Ireland, where they had the biggest impact of anywhere in Europe).

Poles find their home country's economy is coping with the economic downturn relatively well, though that certainly can't be said of Latvia.

And the fall in the value of sterling over the past year has made Britain less attractive, particularly for those who send part of their wages back home.

The global nature of the downturn has one positive effect on the population challenge: it used to be that recessions meant Scots left for opportunities elsewhere, but that's not obviously the case now, when there are so few attractive opportunities elsewhere.

But according to Professor Wright, Scotland does have a very high level of graduate emigration, at around 12% of Scottish-domiciled students leaving.

They take with them skills, attained at high cost to government budgets, and the nation's best prospects.

Will these emigrant Scots come back with the encouragement of the Homecoming Scotland programme? Robert Wright doubts that very much.

Those who move back to Scotland are much more likely to do so because of family ties that bring them back. It is rarely down to work opportunities or an appeal to patriotism.

That's where the migration policy from Holyrood may require much tougher messages about the kind of people being attracted to Scotland being, looking and sounding different from the majority.

The sensitivity to immigration across Europe has led to Germany and Austria continuing to block labour migrants from the A8 nations, even though that risks breaking EU law if it is continued.

Britain's block on Bulgarian and Romanian migrants, which has to be lifted by law within the next four years, has seen most migrants from those countries going to Spain and Portugal.

And is there any evidence from these movements to back up the case made by immigration's opponents that migrants "take our jobs"?

The Institute for the Study of Labour, based in Bonn, has taken a close look at the evidence.

It concluded there is no evidence that the new European citizens would, on aggregate, displace native workers or lower their wages, or that they would be more dependent on welfare.

One of its detailed research programmes has reckoned that the impact of EU migration from east to west boosts national income by 0.2%, or around 24bn euros across the continent.

Labour market effects are surprisingly small, it concludes. In the short run, wages decrease about 0.1% in western Europe and the unemployment rate may rise by about 0.1%.

Among the new EU member states, from which these migrants have been leaving, wages may increase 0.3% while unemployment rates declines by 0.4%.

In the long run, the impact is reckoned to be neutral.

The academic study concludes that the brain drain out of central Europe into the west may be a concern for those countries, but that "the brain circulation between EU member states may in fact help to solve their demographic and economic problems... Free migration is a solution rather than a foe for labour market woes and cash-strapped social security systems in the European Union".

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Let's start with the relatively good stuff, as that doesn't take long.

A: Scotland is not Latvia or Ireland, facing double digit contraction, brutal public spending cuts, and doubts that the deficits can be funded.

B: Labour market fluidity remains remarkably strong.

The labour market survey which measures all those who face at least a period of unemployment over a three-month period shows the numbers moving into unemployment is clearly up, but so are the numbers leaving unemployment - up from 19,000 per month a year ago to 25,000.

Some may be withdrawing from the labour market, but lots of them must be finding new jobs.

C: The economy will get better, eventually.

But that's about as good as it gets in the Scottish ITEM Club report, published today.

Using the same Treasury economic modelling that Alistair Darling has been using, it finds a much less optimistic outlook for getting out of recession.

The Chancellor reckons the UK economy will be back in growth by the end of the year, and rapidly so. This independent use of his figures says the UK and Scottish economies will stagnate next year and get into sluggish growth in 2011.

But as we know by now, the employment picture will struggle to catch up with the recovery of the rest of the economy. And the specifics of the ITEM analysis make bleak reading.

It foresees another eight years before the level of employment and of unemployment return to 2008 levels.

At sectoral levels, there is a grim outlook for manufacturing jobs, with a rapid fall in jobs by 2011 - down from 220,000 before the recession to only 160,000 by 2019.

Those jobs aren't coming back.

The recovery depends heavily on the large and diverse sector known as 'business services'.

This has done exceptionally well in job creation in Scotland during the boom years for the property market - far better than for the UK as a whole.

Employment in this sector increased by 83,000 between 2002 and 2007, or 31% - more than twice the UK growth rate.

Breaking that down, the sharpest growth between 2002 and 2007 was in real estate management, up more than three times faster than the UK rate, by 242% to 12,200. The figures were up 75% on research and development jobs.

The big numbers were in architectural and engineering/technical consultancy, up by 52% over those five boom years to 44,900 jobs.

The business services sector is on course, according to ITEM Club, to lose 44,000 jobs between 2008 and 2011.

That is partly explained by nearly half of its sub-sectors being property-related.

And here's the catch.

This is the sector which the Scottish ITEM Club sees as essential to growing Scotland out of recession from 2011 to 2018. Simply to get back to 2008 employment rates by then would require business services to put on 50,000 new jobs.

If the property sector remains sluggish, that's going to be hard to do. And it will require Scottish business services to be good at penetrating markets outside Scotland.

Of course, business services include the areas where Scots face lower-wage competition from the IT-enabled sectors in developing countries led by India.

This coming week, a small group of Scots will be learning how it's done.

But to do so, they have to go to a conference in Bangalore organised by Nasscom, the ambitious trade body for Indian outsourcing and offshoring.

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Lloyds Banking Group directors don't have their troubles to seek at today's annual general meeting in Glasgow.

A group of shareholders of what was Lloyds TSB is today launching its plans for legal action.

This is over the information given to them ahead of the takeover of Halifax Bank of Scotland.

The action could be against either the company, its advisers, the government or a combination of all three.

But that's not all Lloyds' legal problems, inherited with the takeover.

Some very serious allegations were made against Bank of Scotland corporate division at Westminster this week, with a call for a criminal investigation.

This follows BBC Radio 4's "File on 4" programme, which last week reported some of the detail of the case of Lynden Scourfield, a senior manager of Bank of Scotland's high risk lending unit at its Reading office.

He left rather abruptly, and in disputed circumstances, in 2007.

File on 4 heard from owners of business customers of the bank alleging that Mr Scourfield required them, as a condition for getting a loan, to employ an independent consultancy company specialising in turning around troubled businesses.

This was Quayside Corporate Services. It was alleged that a number of businesses ended up in more debt than before Quayside got involved.

The loans from HBOS's "high risk" unit between 2002 and 2007 are said to have led to losses at the bank of £250m.

Quayside Corporate Services have denied any wrongdoing, while Lloyds says its Bank of Scotland arm behaved in "a fair and responsible way".

For legal reasons, the BBC was unable last week to report several of the allegations.

But those restrictions did not apply to James Paice, Conservative MP for South-East Cambridgeshire.

He has constituents whose businesses were customers of the Bank of Scotland office in Reading.

So serious are his concerns that he used a debate at Westminster this week to put them on the record, where he does not have to have conclusive evidence and can avoid the risk of being sued.

MPs only use that privilege in exceptional cases.

The BBC is similarly protected in reporting what he said. Here is some of Mr Paice's speech in Westminster Hall:

"I believe Lynden Scourfield was responsible for making what may or may not have been poor financial positions into impossible ones, and in doing so probably enriched himself and others."

The MP stated: "My basic contention is that Lynden Scourfield lent considerable sums to more than 200 businesses and that in many, if not most, cases he required the businesses to engage Quayside as advisers or turnaround specialists.

"In many cases, he also required that a Quayside appointee be placed on the board.

"Then Quayside would advise significant increases in borrowing, which Scourfield authorised and in which the business owners acquiesced, as, after all, that was the advice of the bank's appointees.

"Subsequently, many of those businesses went down for far more than if Quayside had not been involved, and the assets of the businesses were acquired in one way or another by others involved with Quayside".

Following the BBC documentary, Mr Paice received a letter from a lawyer.

He told MPs that it read as follows: "I am presently acting for an individual, Clive Collins, whose business was taken away from him by HBOS and placed in the hands of Quayside.

"Quayside invoiced vast sums for doing very little work. They effectively asset-stripped the company until it could no longer trade.

"The business's main asset, a subsidiary company, was then sold to a different company owned by the directors of Quayside for £100,000, despite much higher offers made by independent third parties."

Speaking in Westminster, the MP also referred to a company called Seoul Nassau "which, I am told, went down for £34 million owed to HBOS".

He said: "It is alleged by someone who worked for the company's owner, in a letter that we received, that the owner's personal assistant would 'deliver a briefcase full of cash to Mr Scourfield to assist the loan'."

Mr Paice went on to say: "This allegation follows other stories that Mr Scourfield was benefiting from being, as the bank said, 'overly supportive', including, I am afraid, lurid stories of prostitutes being paid for from the funds of Quayside clients."

In his speech, Mr Paice raised several questions; about the lack of apparent controls on Mr Scourfield's lending: why the allegations of fraud that were taken to the bank were not then referred to the police: why regulatory authorities were not involved by Bank of Scotland: why the Bank did not use accredited members of the Institute of Turnaround Specialists, to which he said Quayside did not belong: why a consultancy involved in a company before it collapses can then benefit from its subsequent sale: and "if everything was satisfactory, why did HBOS stop using Quayside?"

You can read the full transcript on Hansard

Neither Lynden Scourfield nor his lawyer has commented on the allegations.

The founder of Quayside, David Mills, has denied any wrongdoing and said: "I and Quayside Corporate acted as advisers to a number of banks and accounting firms to help implement commercial decisions made by our clients to try to turn around failing businesses.

"I always kept the banks fully informed of progress with the businesses. Unfortunately, in a number of cases, companies were unable to pay off large debts incurred before Quayside Corporate Services' involvement."

MPs criticised Lloyds Banking Group for not properly investigating business customers' complaints.

A statement from Lloyds stated: "We simply cannot comment on individual circumstances. However, we strongly believe that we have acted throughout in a fair and responsible way.

"Bank of Scotland deals in a sensitive and fair way with all of its corporate banking customers, including those experiencing difficulties. We stand by our customers and support them closely in managing their financial difficulties."

It's probably wise not to comment further.

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With 2.8 million shareholders, Lloyds Banking Group directors come to Glasgow this Friday to face shareholders who feel the Lloyds TSB takeover of Halifax Bank of Scotland has let them down badly.

Of those, around two million were shareholders of HBOS, a legacy of the Halifax Building Society flotation, and they have reason to be grateful to Lloyds TSB for sacrificing its conservative reputation and taking on colossal write-downs.

More generally, there are growing signs of shareholders getting active in making their presence felt, as they reckon that directors have not been representing and protecting their interests as well as they could or should.

The UK Shareholders Association is trying to raise funds for a legal challenge to the former Lloyds TSB directors.

The extent of organisation of these small-scale investors is very limited, and it's hard to see how they could co-ordinate such an action.

Much better organised and resourced are institutional investors, who are also waking up to their potential clout.

The focus so far is on tackling the directors' remuneration committee reports.

As Robert Peston blogged yesterday, the links between executive pay and corporate performance, and between top pay and median earnings, have gone way out of kilter.

The Government's bank investment agency, UK Financial Investments, pushed the 'no' vote on Royal Bank of Scotland's remuneration committee report above 80% of shareholdings.

Shell recently faced a 59% vote against its directors' remuneration committee report last month.

Likewise a shareholder revolt at Bellway builders and Provident Financial. It was reported yesterday that continental companies having to amend their proposed remuneration packages include Volvo, DSM, Carrefour and Heineken.

A striking part of this is the extent to which institutional investors have been passive until now.

An audit just published by the Local Authority Pension Fund Forum, and carried out by RImetrics, looked at the involvement of three big institutional investors controlling £700 billion of assets.

Of that, it found £130 billion is not regularly voted. There is inconsistent engagement with managers.

There's an estimate of £350 billion that is "rarely, if ever, engaged".

Here's the incredible figure: a total of only 11 individuals were identified who are responsible for the implementation of environmental, social and governance policies for those £700 billion of assets, held in upwards of 3000 companies across the world.

Another survey, published today by the UK Sustainable Investment Forum, showed 'Responsible Investment' policies in pension funds are rapidly increasing the engagement in the companies where they invest and control much of the British economy.

Two years ago, a third of pension funds had no RI policy, and that is now down to one fifth. Of those with such a policy, four fifths monitor it.

The difference is being made by more activist trustees, the survey found. If you're in the BT pension fund - although it faces a daunting funding gap - you get top ranking from the watchdog.

Barclays, HBOS and BP are well up there as well. The future of corporate governance comes back, after all, to your investments and your pension.

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A task force on finance sector jobs - that's the highly original, main response from the Financial Sector Advisory Board, according to its annual report.

The idea is to retain the maximum number of jobs possible, as well as retaining high-level skills in Scotland.

Quite how it does that is less clear. While FiSAB's report, published today, can point to numerous attempts to improve financial education, its response to the financial sector's crisis is long on vagueness and short on specifics.

The changes being considered include: "reconsidering education, skills and financial capability priorities" and "ensuring an appropriate regulatory response so that Scotland offers a business-friendly location".

There's also a pledge to "reposition and re-emphasise communications activity", presenting "a holistic view of the overall participation across civic and business society of the financial services industry in Scotland".

There's an admission that the sector needs to get out and sell Scotland the financial brand - to outside investors, savers, and to the people of Scotland.

There's to be an emphasis on how much finance is about the mainstream economy, and not just fat cats with humungous bonuses.

That includes a stress on attracting people into working within finance, at a time when it may seem a tad unattractive.

When asked about reputational damage to Scotland the Canny Brand, the answer usually comes back that others are too busy handling their own end of the financial crisis to think of Scotland as uniquely harmed.

But John Campbell, chairman of Scottish Financial Enterprise, recently told a gathering of financiers and government figures at the Scotland Office in London that that's no reason to be complacent.

"SFE intends to put a lot of energy in the year ahead into refuting negative claims, and explaining the industry in Scotland, and its diversity," he said.

It's been a good weekend for interesting and random statistics about the state of the economy. Here's my selection:

* Retail footfall is down 2.4% between last month and May last year, with the Scottish figure down 3.3%. Worst affected was Wales and south-west England down 8%.

According to Experian, the research company that compiled the figures, the nature of footfall is changing, as shoppers become less spontaneous about purchasing, and more given to savvy, informed decisions, checking out products, sometimes to go home and buy them more cheaply online. It's what they like to call "a culture of considered thrift".

* The Bank of Scotland's retail price index reckons Scottish prices dropped by 0.7% between the start of last year and the first quarter of this one. The year before, prices rose 5.4%. As the recession kicked in, London faced the sharpest drop across the UK, at 2.8%. This was driven by the fall in mortgage payments, down by more than a third, while clothing and footwear prices fell 6.3%. Food and non-alcoholic drinks were up 10%. Oddly, Bank of Scotland reported a 4% rise in Scottish council tax, during a year when bills were frozen.

* Inflation over the past 10 years in Scotland has seen mortgage payments rise 27% on average, while clothing and footwear is 26% down, communications 13% lower, fuel and power is up 73%, food is up 30%, and restaurants 38%.

* The latest UK manufacturing purchasing managers' index is out today. It's still contracting but at its highest point for a year. Production and new orders continued to fall, but at the slowest rate for 14 months. Capital goods producers - machinery, for instance - "vastly under-performed" other sectors, and job shedding remained "rapid", driven by cost-cutting.

* The really important economic issue of our times is the cost of attending a wedding. Halifax has generously researched the issue, and found that the average guest spends £458 on travel, hotels, new clothes, drinks, gifts etc.

Stag/hen nights are also included in that, costing an average £92. And if it's overseas, the £258 average cost puts the total up to £648.

For the big day, men spend more than women on new threads for the big day - £123 to £106.

And, less surprisingly, a big majority agree that the bride and groom should consider the cost to their guests before requiring that everyone flies to Antigua.

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