Chancellor Alistair Darling was being hugely economical with the truth when he set RBS a lending target of £50 billion yesterday.

A well-placed banking source yesterday revealed to The Slog that RBS has shut up shop as far as business loans are concerned. The reason is that RBS is not in any kind of financial shape to lend money, period.

The target set by Alistair Darling just twenty minutes after we received this news will in fact be handled by the RBS subsidiary Coutts – which (if you’re in the know) is already lending very happily to soundly-based entrepreneurs everywhere.

Does this matter? Yes, it does – for two reasons. First, using RBS as the branded lending source hides what every informed financial commentator already knows: RBS is a mess the Government persists in talking up – as it does Northern Rock. New Labour wants to hide the fact that RBS is one great big fat potential toxic debt.

Second, there is an important contrast here between what was a private bank, very well run and exceptionally well capitalised (Coutts) and the mad megalomania of a Globalist Friedmanite bank run by a clown called Freddie Goodwin (RBS).

Coutts is part of the same club (other members include JLP and the Cooperative Movement) who seem able to ride free-market globalist created meltdowns. Such companies give the lie to those who prattle about there being no alternative to contemporary insanity.

The Treasury refused to comment on the news.