Yesterday’s National Audit Office's figures lay bare the horrifying costs of propping up the UK’s banking sector – a staggering total of £117 billion.

At the macro-economic level, the over-riding priority for the next Government is to cut back the UK’s rapidly rising net debt. Next Wednesday’s Pre Budget Report is likely to confirm that this year’s massive £175 billion net borrowing estimate will be breached.

Earlier this year, in Ten Economic Priorities, the ASI set out how the next Government should tackle the UK’s woeful public finances.

Aside from the energy sector, where there is a desperate need for new base-load generation plant, it is only the banking sector – and certainly not the groceries sector as one Think Tank recently suggested – that warrants urgent government intervention.

It beggars belief that the NatWest’s parent company, the Royal Bank of Scotland – yes, the Royal Bank of Scotland – is receiving up to £55 billion of capital injections; this is c£1,000 for every man, woman and child in the UK. Despite this unprecedented largesse, its share price languishes below 40p.

Whilst the Government’s recent economic mismanagement has been desperately damaging, the fact remains that the prime responsibility for the Royal Bank of Scotland’s plight lies with its management.

After all, HSBC – Midland Bank’s owner – has not received a penny of capital injection. It is doing swimmingly, with a market capitalization currently exceeding £120 billion.

The next Government’s banking priorities are clear:

Short-term: Prevent any further major bank failures through periodic stress-testing;

Medium-term: Compel the owners of the four clearing banks to compile separate accounts for their retail and investment banking operations;

Long-term: Separate the two businesses into regulated ‘Captain Mainwaring’ retail banks and ‘Casino’ investment banks: if the latter go bust, so be it.

Incidentally, does the wider public have any concept of the financial impact of the banking crisis?