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Bank aid sends debt to £2trn

Government aid for Lloyds TSB and RBS has added as much as £1.5 trillion to the national debt.

Last week, the Office of National Statistics had to classify RBS and Lloyds TSB as public sector entities because their corporate policies are in part controlled by the state. Their debts pushed up UK debt to 147 per cent of the nation’s earnings, the highest figure since 1954. The ONS figures now put the total UK national debt in the region of £2 trillion.

Liberal Democrat Shadow Chancellor, Vince Cable says: “Ministers must now accept the reality that they effectively own two large banks and use them to ensure the flow of much needed credit into the economy.”

The Confederation of British Industry says the Government needs to begin to be more open with the public on what it is doing to solve the economic crisis. Director-general Richard Lambert says: “The Government appears to have been fighting a series of forest fires rather than building a platform for economic recovery. There is not nearly enough precision about when all this noise is going to get converted into action. If you ask businesspeople around the country whether they have noticed anything happening at the coalface, the chances are that most of them will shrug their shoulders.”

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