MPs call for more transparency for taxpayers over bail-out exposure

23 January 2009 / by Rachael Stiles
Taxpayers should have "much greater transparency" about the potential costs of the Government's bail-out scheme which is nationalising or part-nationalising banks left, right and centre.

The Treasury sub-committee said in a report on the administration and expenditure of the Chancellors departments, released today: "By nationalising financial institutions, the Government has taken on responsibility for significant liabilities", so the committee is therefore "demanding that the Treasury quantify and disclose the liabilities involved in the extensive public funding of these banks.

"Given the amount of public money poured into them over the last six months, taxpayers no less in this economic crisis." it said.

Disclosures on liabilities facing the taxpayer should be at least, if not more, comprehensive as those enforced upon corporations, the committee believes.

Using the nationalised Northern Rock as an example, the committee found a number of instances where liabilities were described as "unquantified."

The MPs also raise concerns that the Treasury did not have a sufficient workforce with which to handle the economic crisis. "The economic situation is placing ever increasing demands on the Treasury Group." it said. "We question whether continued staff reductions will leave the Group able to deliver all that is expected of it."

Meanwhile, the Labour party has received more criticism over its handling of the economy from opposition leader David Cameron, who said this week that Britain is facing having to borrow money from the International Monetary Fund.

"But it's not just about a plan for a new economy." Mr Cameron said. "In the light of Labour's Debt Crisis and the catastrophic fiscal position this country now faces we must understand that uncontrolled public spending and rising government borrowing does not advance our progressive vision - it threatens it."

On BBC Radio 4's Today Programme, Gordon Brown has dismissed as "ridiculous" Mr Cameron's claims that the UK's situation is so dire that it will have to be bailed out by the IMF.

Figures released today have confirmed that the UK economy is now officially in a recession, having experienced two consecutive quarters of negative growth.

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