NEF: Taxpayers Subsidising Banks by £30bn a Year

This briefing from the New Economic Foundation finds that banks are being conservatively subsidised by up to £30bn a year. They point out a few hidden subsidies that banks receive:

• Being too big to fail

• Quantitative easing

• Passing the costs of re-capitalisation onto the customer

• The licence to digitally ‘print’ money (This is touched on but the benefit is not included in their total estimate. Positive Money estimates this licence-to-print-money subsidy being worth at least £30bn a year, on top of the £30bn that the first three subsidies are worth).

And they conclude with this bombshell:

“The conclusion we are able to draw from the limited information available is that the hidden subsidies to UK banks from taxpayers and bank customers are at least very similar in scale to current bank profits.”

It’s well worth a read: download Feather-bedding Financial Services. Also check out our newly-launched campaign that shows how the public service cuts and tax hikes would be unnecessary if we removed the subsidies to banks – see OneGoodCut.