£850bn is the official figure for Britain’s bank bailouts, according to a report published by the National Audit Office on Friday.
And the organisation tasked with scrutinising UK public spending says the number was worth it:
If the support measures had not been put in place, the scale of the economic and social costs if one or more major UK banks had collapsed is difficult to envision. The support provided to the banks was therefore justified, but the final cost to the taxpayer of the support will not be known for a number of years. The Treasury estimated in April 2009 that there may be a loss of between £20 billion and £50 billion, the wide range reflecting the inevitable uncertainty involved in such an estimate. The major determinant will be the prices obtained for the taxpayers’ current holdings in the various banks.
Which is all very interesting considering the NAO has also knocked up some estimates for taxpayer losses on the government’s investments in RBS and Lloyds Banking Group so far. Based on November 27 share prices (RBS: 35p, LLOY: 59p) these implied a loss for UK taxpayers of £18bn on their RBS and Lloyds stakes — just one part of the government’s overall support measures — and only a bit below the lower band of that £20bn – £50bn loss estimate.
The good news is that, according to the NAO, for every 10 pence increase in the share price, taxpayers will get an additional £9bn from the sale of RBS stock, and an additional £3bn from Lloyds. Thus Britons’ future tax rate may be somewhat reliant on the performance of these banks.
Funny how we’re all in it together now, eh?
Except for the lawyers of course. They are all set either way:
Related links:
PM resorts to class war tax rhetoric – FT
Q&A: What the bail out means for you – FT