I haven’t had a chance to number-crunch today’s unemployment figures yet. But there was an interesting chart in the Audit Commission report - also out today - on how councils are faring in the recession.

For all the talk of the public sector cutting jobs and sharing the general pain, the figures seem to show a rather different story.

The chart on page 19 (based on ONS figures) shows a fall in employment of about 210,000 in manufacturing, 195,000 in distribution and hospitality and 180,000 in finance and business services.

Meanwhile there was a rise of about 170,000 workers in public administration, education and health.

This is likely to fuel the suspicion in some quarters that state-employed workers are cossetted from the downturn; a claim which is bitterly contested by the public sector unions.

Some readers may have thought yesterday’s blog on Defra’s food policy a bit cynical. Maybe. But sometimes that’s an appropriate response.

Take the idea of restricting “buy one get one frees”, which I highlighted - and is on the front of today’s Times.

It may be a good idea. If so, it was a good idea when Defra first came up with it - in the original “Food Matters” document published a year ago. How come nothing has changed since then?

I spoke yesterday to Tim Lang, an expert in the field. He pointed out the contradictions within Whitehall over some of these issues. For example, one government body is urging people to eat fish twice a week - another is urging government to cut the fishing fleet to save dwindling resources.

My story didn’t make the newspaper but here it is….

The Food Standards Agency has refused to drop its recommendation for people to eat two portions of fish a week despite the government’s own concerns about dwindling sea stocks.

Ministers were urged several years ago to cut the British fishing fleet by their advisers in the Royal Commission on Environmental Pollution.

In its response, the government agreed that over-fishing was “one of the major threats” to the marine environment. Yesterday it warned again that “we see it (environmental degradation) too in the seas around us denuded of fish.”

The FSA had promised in January to review its “two a week” policy. But yesterday a spokeswoman told the FT that the quango would not drop this line - although it could start providing extra advice on which fish to purchase.

“Sustainability is not our forte,” she said. “Two a week is the amount of Omega 3 (fatty acids) you need, it is not available in any vegetables or meat, there are no other sources of it. We are not here to look at fish stocks, there are other organisations that specialise in that.”

The clash between the FSA and the RCEP was cited yesterday by former government adviser Tim Lang as an example of Whitehall’s failure to address sustainability. “There are these underlying contradictions within government,” he told the FT.

Prof Lang, professor of food policy at City University and an adviser to the World Health Organisation, advised the Cabinet Office on its “Food Matters” report last summer.

Political pledges on value added tax tend to have a short shelf life. The strong Tory denials on Sunday of a reported “plan” to raise VAT to 20 per cent are no doubt true. But, with the public finances in such a dire state, the debate seems eerily reminiscent of a legendary Geoffrey Howe dodge.

In the run up to the 1979 election, Labour were obsessed with the Tories planning to double VAT. Howe and Thatcher dismissed it as a smear. Howe was pretty explicit: “We have absolutely no intention of doubling VAT.” The Daily Mail was so convinced, it included the “double VAT” charge in a splash on “Labour’s dirty dozen lies”, just days before the campaign concluded.

The trouble was that the Tories had already agreed a “massive” hike in VAT a good year before winning the election. Sure, they didn’t want to double the rate. The secret plan, hatched at Howe’s house on the Fentiman Road, was completely different: to raise VAT from 8 to 15 per cent. Howe announced it in his first Budget. This story by my colleague Nick Timmins (written when he was at the Independent) runs through the whole saga.

Howe was unapologetic in his memoirs, describing the row as “part of the small change of election campaigning”.

“We had no difficulty denying it. For there was no prospect, on even the most gloomy of expectations, of our having to go beyond a rate of 15 per cent.

Some critics afterwards thought it pedantically misleading to rest our case on the fact that twice 8 per cent (the then basic rate) was 16 and not 15 per cent.

They also overlooked the fact that some goods (about 6 per cent of the basket) were already taxed at 12.5 per cent: the weighted average impact of the existing dual rate was 8.5 per cent. So our denial was more than technically correct.”

It was only yesterday that we contrasted David Cameron’s newfound enthusiasm for Tesco with his comments - a year ago - criticising supermarkets’ bullying of suppliers.

Weirdly, there is news on this front. (From today’s PA)

Supermarkets should be forced to pay for a watchdog to resolve disputes with their suppliers, a regulator told ministers today. The Competition Commission urged the Government to install an ombudsman after failing to secure agreement from a majority of grocery retail giants on a voluntary scheme.

It made the call as it published a tougher code of conduct for the sector following a lengthy investigation which uncovered problems the Commission warned could hurt consumers.

Farmers’ leaders welcomed the move which they said would help end “underhand practices” which forced them to cut their prices but retail chiefs warned it could spell the end of cheap food for shoppers.

The main aim of the ombudsman, who would be appointed by the Office of Fair Trading, would be to adjudicate on disputes under the new code “to promote the interests of consumers”, the Commission said.

So does David Cameron have any view on this? Over to you, Conservative press office.

UPDATE: 6.40pm. No comment as yet.

Lord Myners gives short thrift today to Tory plans to kneecap the Financial Services Authority and transfer many of its powers to the Bank of England.

In an interview with City AM (the freesheet) the City minister says the central bank neither wants nor has the right skills for the job. He portrays the Bank as an ivory tower full of chin-stroking academics.

“They (Tories) have misjudged the competence and culture of the Bank of England. The Bank is a very academic institution. It is not actually about doing things,” he said.

“The Bank is good at looking at the wider picture but it does not want to be supervising and reflecting on individual banks. Do we want the Bank of England distracted by supervising building societies and insurance companies?”

I was going to blog on Monday about the flaws in George Osborne’s plans but Paul Murphy on FT Alphaville beat me to it. And here is another colleague, Paul J Davies, making a similar point.

Ultimately the reason why financial regulation often fails is because the smart guys aren’t working for the FSA or the SEC: they are making millions of pounds/dollars in the banks.

Chief executives of banks didn’t understand some of the financial products cooked up by youths with PhDs in advanced mathematics. How can we expect low-ranking regulators to be on top of these innovations?

This point is made in a shrewd letter to the FT today by Tim Price of PFP Wealth Management:

“As to the likelihood of the Bank attracting a sufficiently experienced and qualified staff, this gets to the absolute heart of the problem. Short of receiving infinite remuneration, no regulator will ever realistically be able to compete with the so-called “talent” on Wall Street and the City, even if that talent amounts to self-enrichment rather than wider wealth creation.”

See the FT’s Arena blog debate: should the FSA be scrapped?

Expect several front page headlines on Tuesday morning about HMRC’s plunging tax receipts in 08/09 - laid bare thanks to an NAO report. Astute readers of this column will already know about the £20bn-plus fall in tax take - you read it here - because it was flagged up on Budget day in the red book small print. You’ll notice that the coming year is set to be even worse, according to the Treasury’s own predictions.

The real nasty today was another £10bn-plus of unpleasant news, including £3bn of uncollected tax and £7bn set aside for legal claims by taxpayers. The bulk of the latter - a staggering £4.8bn - stems from a single landmark case concluded early last year over VAT repayments. HMRC admitted today that they have already paid £1.5bn as a result of this “Fleming” test case. That’s an awful lot of helicopters or MRI machines.

Attempts to clean up the financial system have become more urgent given reports of the banking world returning to normal.

There are suggestions that Goldman Sachs and Morgan Stanley could agree to pay out $34bn of bonuses between them later this year. I caught up with a friend at the weekend who works for a bank in the US: “Everyone is expecting a bumper bonus season, it’s going to be hugely controversial when this comes out,” he told me.

Of course lending has not yet returned to normal. But banks have been able to profit from recovery surges in some markets, for example stock markets outside Europe and the US. Soon it will be champagne time on some trading desks.

Today’s white paper on banking - issued by the Treasury - doesn’t seem to be greatly radical despite its broadly sensible tone.

1] It urges more sensible remuneration practices but fails to specify how pay and perks should be curtailed in any detail. The paper says “the FSA now has powers to penalise banks if their pay policies create unnecessary risk“. Every year the City watchdog will have to report on how banks are complying with a remuneration code of practice.

It will also “integrate oversight of remuneration policies into overall assessments of risk.” The Treasury is briefing that this means that banks with over-generous pay packages will have to hold higher levels of capital.

But how will they define “unnecessarily risky” pay packages? Herein likes the difficulty. I’m told the Treasury discussed the idea of a “maximum wage” and quickly realised it was unworkable. Let’s wait to see how this works in practice.

2] Alistair Darling (here is his speech today) will give the FSA a new statutory responsibility for financial stability but will otherwise leave the tripartite regime (Bank of England, FSA, Treasury) intact.

3] There will be a new “Council for Financial Stability” which will supervise meetings, three or four times a year, between representatives of the three bodies (who already meet regularly). These gatherings will be minuted and those minutes will be made public.

4] The FSA is strengthening rules to make sure banks hold enough capital as a buffer against losses.

Andrew Tyrie, a Tory MP on the Treasury select committee, said the white paper was “Rearranging the three key deckchairs on the Titanic”. There were questions as to why Mervyn King (governor of the Bank) only saw the report last week.

It was Lord Myners who hit the nail on the head when he told the committee this afternoon: “No amount of supervision will guarantee that you will make up for poor governance, poor management and a poor culture (at banks)”.

It is a difficult circle to square:

Ministers want banks to be responsible and risk-averse. They also want them to provide more loans for families and businesses.

The two are contradictory.

We had another insight into this puzzle this morning when the FSA, Lord Myners and John Healey (housing minister) were up in front of the Treasury Select Committee.

You may remember that Gordon Brown wants to ban 100 per cent mortgages. (”A new era of responsible lending“). The prime minister has asked the FSA to examine the issue. The watchdog is putting out a paper in the autumn examining whether mortgage restrictions are a good idea.

But the FSA executives who appeared this morning at the committee seemed far from enthusiastic about setting restrictions on loan-to-value or loan-to-income ratios.

Jon Pain, managing director of retail markets for the City watchdog, said that imposing “caps or collars” on mortgage lending based on income or deposit ratios could be a crude tool for measuring affordability.

Instead, lenders had more sophisticated ways to work out whether a household could repay a home loan, Mr Pain said. Assessing a loan on the basis of income versus mortgage was a “superficial” ratio, he said.

Mr Pain said that the level of a household’s disposal income - after paying mortgage payments - was a more appropriate figure than loan to value or loan to income ratios. (An argument used by many lenders in recent years to justify their more “liberal” lending practices).

Meanwhile another FSA executive, Leslie Titcomb, argued there were concerns about the potential impact on first time buyers.

“We are also concerned that having a fairly blunt tool like a cap on loan to values could have an effect of denying first time buyers access to the market, which would be unfortunate,” she told the committee.

Maybe I’m over-interpreting here but that seems pretty clear…..no ban on 100 per cent mortgages or banks lending six times your salary.

Sally Keeble, a Labour member of the Treasury select committee, said the comments proved that there was a “clash” between the two arguments.

“I’m fairly certain there is a clash about what the government wants to do,” she told the FT. “On the one hand, they want to see prudent lending, which argues for tight controls on loan to value ratios, on the other, they want people to be able to get loans.”