Forget the Budget. The IMF’s Global Financial Stability Report has just produced the figures Gordon Brown didn’t want you to read: the cost to the UK taxpayer of the banking crisis. The Treasury’s approach is to airbrush banks out of the picture, and kid us on that we’ll get the money back eventually. The IMF gives it to us straight. It estimates (p44, pdf) that when this is over British taxpayers will have the largest bill in the G7. The bank crisis will cost the UK some 13.7% of GDP – which works out as about £190bn (see graph below). The figure for the US is 12.1% and Canada just 2.8%. Again: this isn’t a paper loss. This isn’t made-up money. This is the net fiscal cost to the taxpayer of the bank rescues: money that can only be recovered by raiding our wallets, pay packets or pension funds.
Why so big? As the IMF report makes devastatingly clear, no country has ever experienced the credit/financing dependency that the UK had developed.
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