Billions of taxpayers’ pounds have been used to save British banks from collapse, and yet the cost of credit is still high, mortgages are expensive and hard to get, and businesses cannot get the loans they need.

Chancellor Alistair Darling understands the anger, but states that only 12 months ago we were facing financial meltdown.

“The way I look at it is this. Twelve months ago, RBS (Royal Bank of Scotland) and HBOS (Halifax Bank of Scotland) were bust, they couldn’t carry on,” he said.

“Had we not done anything they would have collapsed, jobs would have gone and it would have brought the rest of the banking system down with it.

“So the priority 12 months ago was to stop a calamity turning into a catastrophe.

“The job we have now is to put them in a recovery position.”

Mr Darling says that the amount of lending going to business is about the same as it was two years ago, but accepts there is hardship for businesses and individuals.

“The picture is mixed but, yes, there are still problems in relation to first-time buyers, in relation to some smaller businesses—and this is something we are working through with all the banks,” he said.

“The big lesson is to make sure we never again get into a position where two banks almost brought down the whole system.”

The Chancellor says he understands only too well the anger among those who are set to lose their jobs from banks which have been saved by taxpayers’ money.

“I do understand that,” he said.

“But, as I say, 12 months ago we were facing a situation where everyone’s jobs would have gone.

“You have to bear in mind that both RBS and Lloyds are losing money.

“I hope job losses as far as possible can be achieved on a voluntary basis spread over two to three years in many cases.”

On the vexed question of bankers’ bonuses, Mr Darling said that only those earning under £40,000—people who were not in any way responsible for the near collapse of banks—will be entitled to bonuses.

“If you look at the restriction on the banks we own, the board themselves will not get bonuses for three years.

“The people at the top need to understand that, if it wasn’t for the taxpayer, they’d be out of work.”