HBOS redundancy concerns erupt into a war of words

Given that Scotland's two largest banks are part-nationalised, it's not surprising that the discussions regarding the future of jobs north of the border are the subject of a political barney.

One of the clauses in the initial takeover document relating to Lloyds TSB's ingestion of HBOS was that the focus would be on retaining Scottish jobs and Scottish decision-making. With redundancies estimated at anything between 14,000 and 40,000, there's reason to be concerned.

Since the initial proposal, back in the comparatively halcyon days of early September, doubts have been raised about how water-tight the offer actually was, and politicians have become increasingly vocal about the need for talent and decision-making to be kept north of the border.

Alistair Darling's interview in Scotland on Sunday won't exactly reassure Scottish bankers that their jobs are safe. Eschewing a hands-off approach, he said it would be wrong of him to use his position as chief shareholder to promise to safeguard jobs north of the border.

The point in itself isn't unreasonable - it's up to the management of the bank, not the government, to make strategic decisions. However, Darling's words (which were also an excuse to criticise the case for an independent Scotland) were inevitably met with derision from the opposition.

First minister Alex Salmond replied: "Alistair Darling is not just turning his back on the need to maximise jobs and decision making in Scotland - he is turning his back on his own constituency."

Salmond is due to make a presentation to Lloyds TSB tomorrow to make the case for Scottish jobs and decision-making post-merger.

However, Tavish Scott, leader of the Liberal Democrats in Scotland, reckons Salmond should redouble his efforts to stop the merger between Lloyds TSB and HBOS from going ahead.

"The UK Government must use the taxpayers' investment in HBOS and reconsider its position in forcing this merger to go ahead, risking Scottish jobs, the headquarters in Edinburgh and branches across the country," he says.

The feeling is that the merger between Lloyds TSB and HBOS will eventually be completed in January, despite concerns over HBOS's slumping share price.

Most of the resistance to the merger is coming from those north of the border, who are questioning the necessity for the move. The concern is that the inevitable widespread blood-letting is simply unacceptable and an ever-expanding array of local bankers and businessmen are coming forward in protest.

Jim Spowart, founder of Intelligent Finance in Scotland, has been one of the most vocal, calling for an Office of Fair Trading inquiry, which he believes should be made public in case any white knights are in the wings.

"The chancellor has been talking about Keynesian economics that will kick-start jobs in the recession, but a merger will cause around 40,000 redundancies, with these people going onto the dole queues in the face of slump," he says.