BANK BOSSES TO GET ANOTHER pounds 30BILLION; Taxpayer bail-out cash plan.

Byline: Kevin Schofield

TAXPAYERS are to plough another pounds 30billion into Britain's struggling banks in a move which will see hundreds of new branches opened around the country.

Royal Bank of Scotland will receive another pounds 25.5billion of public money - just a day after they announced plans to axe thousands more workers.

The cash is on top of last year's pounds 20billion bail-out and will increase the Government's stake in RBS to 84 per cent.

Chancellor Alistair Darling also announced that the Government will buy pounds 5.7billion-worth of shares in Lloyds Banking Group, which includes Halifax Bank of Scotland.

That is in addition to the pounds 17billion of taxpayers' money they received when Lloyds TSB and HBOS merged earlier this year.

But the banks will be banned from paying out cash bonuses to workers earning more than pounds 39,000 a year.

Both banks also announced that they had agreed to sell off sections of their business to other lenders in a bid to create greater competition in the financial sector.

The shake-up of the UK financial sector follows a ruling by European competition watchdogs which called for the banks receiving Government backing to be broken up. Darling said the changes would create "stronger and safer banks" to help drag the UK out of recession.

He added: "I believe these steps are better for the taxpayer, better for the banks and better for the economy. My proposals will ensure we have a strong and vibrant financial services sector in the future. They will mean stronger and safer banks better able to support the recovery."

But critics said the amounts of public money being pumped into the ailing institutions was storing up greater problems for the future.

Tory shadow chancellor George Osborne said: "The Chancellor wants us to believe this is a new era for British banking, when in truth the British people are being presented with yet another enormous bill to try clear up the mess from the old era of irresponsible banking supervision over which this Labour Government presided."

In return for the state aid, RBS are selling RBS-branded branches in England and Wales, their NatWest branches in Scotland, the Churchill and Direct Line insurance arm and parts of their investment banking business.

Lloyds Banking Group will offload Lloyds TSB branches in Scotland, Cheltenham & Gloucester branches, and the Intelligent Finance online business.

QUESTION AND ANSWERS ON THE BIG SELL-OFF

Q:What will it mean for customers?

A: Both groups say customers will see no immediate changes. Existing customers of brands and branches being sold will be transferred to the new owner.

Q: I have a mortgage with a brand being sold. How will I be affected?

A: It will have no impact. The new owner will not be allowed to change terms and conditions. You are likely to see a difference when you come to the end of your deal.

Q: I have my current account with one of the branches for sale. How will I be affected?

A: If your branch is sold, your current account will be transferred to the new owner. They can change the terms and conditions of the account as long as they give you sufficient notice. The Government wants the businesses to be sold to small or new players in the banking market, so you are likely to have access to a reduced branch network.

Q: I'm not happy about being transferred to a new bank. What can I do?

A: You can transfer your account to another of the group's branches that is not being sold.

CAPTION(S):

BROKEN UP: Lloyds TSB RESCUE PLAN: Chancellor Darling's pounds 30billion package