Gordon Brown came under fire after it emerged yesterday that the multi-billion pound insurance scheme for toxic bank assets, described by the prime minister as “temporary”, would run for at least five years.
Lord Myners, the City minister, told the Lords the scheme, under which the state is to underwrite tens of billions of pounds of potential 'extreme losses' on bank assets, would have to extend beyond the downturn.
'We are probably talking about a policy duration of no fewer than five years and
probably no longer than eight or nine years,' said Lord Myners. That takes the scheme well beyond the next election, potentially locking in a future Conservative government.
The timescale appeared to contradict Mr Brown’s assurance, when he unveiled the banking package on Monday, that taxpayers would not be taking on a long-term liability. 'What we are doing is...announcing temporary measures,' said the prime minister.