Vince Cable

Commenting on the news that RBS and Lloyds Banking Group are to be broken up and that the Government is pumping another £30bn of public money into the banks, Liberal Democrat Shadow Chancellor, Vince Cable said:

"The banks want it all their own way.

"Lloyds were happy to join the Asset Protection Scheme (APS) when they needed the taxpayer to see them through the financial storm. But now the worst is over, we are being forced to bail it out again to the tune of £6bn so it can wriggle out of its previous commitments to us.

"There must be no question of Lloyds and RBS running away from their lending agreements. They owe their existence to the taxpayer, and RBS is now, to all intents and purposes, a state owned bank. The Government must remember that.

"The bonus agreements in both banks are a sham. Their claim to have capped bonuses is undermined by news that executives are simply deferring them.

"The European Union's move to break up these banks is extremely welcome. However, Darling's claims that today's news reduces risk to the taxpayer is simply not true. All British banks, both the high street ones and the 'casinos', are explicitly underwritten by the British public.

"Until we can split up the banks in a meaningful way, so that taxpayers will not be forced to underwrite casino activities, all banks should pay a premium for the explicit support that they receive."

ENDS

Notes

Speaking on the Today programme this morning, Alistair Darling gave an explicit guarantee that the taxpayer would bail out the banks again, if necessary. Transcript of the exchange with Evan Davis is below:

ED: "If there's a second leg of the recession…if it goes pear-shaped next year, those banks are not going to go bust are they? The taxpayer stands behind them and it is inconceivable that either of them could disappear or become insolvent."

AD: "I think the short answer to that is, yes you're right."