Darling says that taxpayers protecting banks is vital

In his latest announcement, Chancellor Alistair Darling has reiterated the need to prop up Lloyds Banking Group and described the action as vital to the economy and has suggested another multi-billion pound bailout may be needed in order to secure the banking sector.

The struggling bank agreed to the taxpayer having a controlling interest after £260bn in toxic assets have been underwritten in a deal arranged yesterday.

The government’s stake will increase from 43 percent to 65 and there is a potential for a 75 percent stake due to upgraded non-voting shares.

In his statement, Darling has said “Restoring our banks to full health and ensuring that they are able to support creditworthy families and businesses is an essential part of any plan for recovery. If we and other countries don’t fix our banking systems we won’t fix the rest of the economy.”

However the amount of taxpayers money that has been used has not gone unchallenged as the shadow chancellor, George Osborne, has called on Mr Darling to explain to Parliament exactly why such evasive action is needed.

He argued that given the size of the British economy, the UK taxpayer has spent more relatively on bank bailouts that any other country and Osborne retorts they have precious little to show for it.

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