Yes, still entirely possible to have a lovely screaming match about the real costs but:
Although the net burden so far has been just £90m, the NAO said
That\’s the actual cost on the current or income account.
The Government\’s bank rescue debts amount to £124bn, with £67bn of capital injected into the lenders and £57bn of loans provided.
That\’s the cost on the captial account, most/all of which we expect to get back at some point or another.
Despite the ongoing costs of the bail-out, the overall risk for the British taxpayer has shrunk from £955bn to £512bn,
That\’s the amount at risk, given the guarantees offered to bank deposits and bonds etc.
So, if we were to be honest about all of this we would say that the amount being sucked out of this year\’s tax revenues to pay for the banks is £90 million odd: essentially, in the scheme of things, spit. Especially when we consider what the costs of not having a functional banking system would be.
The second number, the £124 billion, is the amount that has been added to the National Debt (and recall, the banks are paying interest and fees on some of this, making the carrying cost that £90 million).
The third number, £512 billion is perhaps what we really ought to be saying has been added to the National Debt: except that we don\’t add contingent liabilities to said debt. If we did then we\’d have to add all the PFI. future pensions (but only those already accrued mind!) and so on, blowing out the national debt to that very scary £4 trillion or so that the Taxpayers\’ Alliance talks about.
But the real lesson to take away from these numbers is that no, the current costs of bailing out the banks are not a limitation on what the government can spend on services. We\’re not having the cuts because of the current costs of the banks falling over (you can still argue that we\’re having them because of the decline in the economy, caused by the banks, but that\’s a very different argument).
So, if you were being honest, rather than being a political shill, you wouldn\’t say that we are having the cuts as a result of the costs of propping up the banks.