Skip to main content

Chair's statement on financial institutions landscape

10 September 2015

A statement from Meg Hillier MP, Chair of the Committee of Public Accounts:

"The extent of the government's intervention in financial markets has increased dramatically since the start of the financial crisis in 2008. Buying shares in banks between 2008 and 2010 to keep them stable cost the taxpayer £108 billion.

The government expects to make £63 billion from selling its shares and loan books and £32 billion from being repaid loans. Despite the unprecedented scale of these plans, they will not be enough to cover the funding needed for new interventions such as issuing student loans or funding schemes such as Help to Buy. The national debt is set to increase by a further £200 million over the next five years as a result.

The government's poor track record in achieving value for money from selling shares and getting back the money will give the public little confidence that the debt increase will be limited to £200 million. Taxpayers  lost out on £230 million from the sale of shares in Lloyds Banking Group in 2013 and  are expected to lose £21.9 billion as a result of student loans already owed not being repaid.

There are three times as many financial institutions in government than in 2004. Most of these institutions are unregulated which makes it difficult to see how the government can fully understand what is going on across these bodies or ensure  taxpayers' money is being properly protected."

Further information

Image: iStockphoto