Banks’ hidden subsidies worth £32bn a year
By James Moore and Nigel Morris
Monday, 14 February 2011
Britain’s banks, which are preparing to announce multi-million pound annual bonuses to senior staff, are pocketing hidden subsidies worth more than £32.5 billion a year from the taxpayer, it was disclosed last night.
Research by the New Economics Foundation (NEF) think-tank calculated that the banks are receiving substantial extra support on top of the estimated £1 trillion direct and indirect aid already pumped into the financial system to keep it afloat.
Its conclusion will further heighten tensions within the Coalition Government over the future of the “big four” banks and the size of their bonus pots. The differences were laid bare yesterday as Vince Cable, the Business Secretary, pre-empted a Government review into their structures by demanding a “fundamental” and “radical” overhaul of their operation.
Days after Chancellor George Osborne agreed to end “banker-bashing” by ministers, his Liberal Democrat Cabinet colleague tore into the “offensive” bonuses being paid to staff.