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04/12/2009
£850m Bail Out 'Justified'
The Treasury's £850bn cash injection of public funds into the UK banking system was 'justified', the National Audit Office has ruled.
The office said it would be difficult to imagine the consequences if action had not been taken.
Audit officials suggested it would be years before the total cost to the public purse was realised.
At the peak of the financial downturn, the UK government nationalised Northern Rock and later bought stakes in Royal Bank of Scotland (RBS) and Lloyds Banking Group.
RBS also put £282bn of its assets into a government insurance scheme for toxic assets.
Additional funding was also provided to the Bank of England.
Audit Office chief Amyas Morse today said: "The Treasury was justified in using taxpayers' money to safeguard savings and stabilise and restore confidence in the financial system."
According to the Audit Office report, the Treasury will have spent £107m on crisis advisers by next April.
By this time the taxpayer could have lost anything between £20bn and £50bn, however, the office stressed that the actual amount would not be known for "many years".
The figure will be dependent on how much the government sells its ownership of the banks for.
Lib Dem finance spokesman Vince Cable said the report shows the full extent of the banking industry's debt, and should act as a "wake-up call".
"These banks should understand that with the level of state support they have received, they must be run in the public interest," he added.
(PR/GK)
The office said it would be difficult to imagine the consequences if action had not been taken.
Audit officials suggested it would be years before the total cost to the public purse was realised.
At the peak of the financial downturn, the UK government nationalised Northern Rock and later bought stakes in Royal Bank of Scotland (RBS) and Lloyds Banking Group.
RBS also put £282bn of its assets into a government insurance scheme for toxic assets.
Additional funding was also provided to the Bank of England.
Audit Office chief Amyas Morse today said: "The Treasury was justified in using taxpayers' money to safeguard savings and stabilise and restore confidence in the financial system."
According to the Audit Office report, the Treasury will have spent £107m on crisis advisers by next April.
By this time the taxpayer could have lost anything between £20bn and £50bn, however, the office stressed that the actual amount would not be known for "many years".
The figure will be dependent on how much the government sells its ownership of the banks for.
Lib Dem finance spokesman Vince Cable said the report shows the full extent of the banking industry's debt, and should act as a "wake-up call".
"These banks should understand that with the level of state support they have received, they must be run in the public interest," he added.
(PR/GK)
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Barclays to cut 1,200 jobs
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Barclays to cut 1,200 jobs
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