Government reveals £37bn UK bank bail-out

14 October 2008

Taxpayer cash goes to RBS, Lloyds TSB and HBOS

The government has announced that it will be injecting as much as £37bn of taxpayers’ money into the Royal Bank of Scotland (RBS), Lloyds TSB and HBOS.

As part of the deal, the government will have a say in the running of the banks, including control over management bonuses.

RBS will receive £20bn and Lloyds TSB and HBOS will receive £17bn. Barclays plans to raise £6.5bn on its own, without government help.

As a result of the cash injection taxpayers will own around 60% of RBS and 40% of the merged Lloyds TSB and HBOS. It also means that executives at the three banks will either have their cash bonuses limited or stopped altogether.

When talking to MPs Chancellor Alistair Darling said that the rescue package contained: “essential steps in helping the people and businesses of this country and supporting the economy as a whole”.

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