Socialist Worker

Give us a Christmas bonus: get the cash back from banks

by Tom Walker
Issue No. 2181

Who benefits?

Who benefits?


The real cost of bailing out Britain’s banks was revealed this week – a whopping £850 billion.

That incredible sum means that each person in the country is dishing out £13,800 to keep the banks going.

The banks are bankrupt.

The only reason the entire banking system did not collapse a year ago is because the government propped it up with huge amounts of our money.

And £850 billion is nowhere near the total it is going to cost us in the long run – it is just the amount spent so far.

The National Audit Office report that revealed the figure adds, “The final cost will not be known for a number of years.”

Among other things, the money spent so far covers guaranteeing banks’ borrowing (£250 billion), insuring their toxic assets (£280 billion) – and covering their losses (£200 billion).

RBS and Lloyds bank were bought by the government for £76 billion to keep them afloat.

Handouts

The others are still relying on handouts of up to £40 billion to survive as the economic crisis shows no sign of ending.

Meanwhile, the bailout led to a bonanza for the City as the government paid massive fees for financial advice.

The treasury spent £107 million on advice, including a generous £15 million contract for Credit Suisse.

City law firm Slaughter and May pocketed £33 million, while consultants Price Waterhouse Coopers got another £11 million for its “work” on the bail out schemes.

But what do we get for all that money that we’ve pumped into the banking system?

Last month Britain’s supreme court ruled that the banks can keep £20 billion in unfair bank charges taken from some of the poorest people when they’ve gone into the red.

And this year 50,000 people will have their homes repossessed – even though many of their mortgages will be with publicly-owned banks.

We own the banks, but they are robbing us twice over – once when they take hundreds of billions in bailouts, and again when they rip us off.

Meanwhile, huge amounts of money are handed out to

super-rich bankers who have never done a useful day’s work in their lives.

Total bonuses for bankers are expected to hit £6 billion this year – up 50 percent on last year, despite the economic crisis.

Champagne

Around 5,000 bankers are set to grab more than £1 million each. The champagne parties of the City’s elite are back.

But we are paying the bill for their lavish lifestyles as the government cuts public spending to pay for the bailout.

It is planning to slash £47 billion – £7 billion from the NHS budget alone (see » Gordon Brown’s government to slash jobs and services).

But to save jobs and public services, there’s a simple answer – take the money back from the fat cat bankers.


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Article information

News
Tue 8 Dec 2009, 18:40 GMT
Issue No. 2181
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