Brown pledges to save Scots workers 'in bid to limit political fall-out'

Suspicions that Prime Minister Gordon Brown sought to limit the political damage from the HBOS takeover were heightened today after Lloyds TSB vowed to protect jobs in Scotland.
In an unprecedented move for a bank merger, the company today insisted that it would retain its Scottish HQ in Edinburgh, would continue to print Bank of Scotland banknotes and that its "management focus" would be on saving as many staff as possible north of the border.
City analysts were amazed by the merger document's specific pledge to "keep jobs in Scotland" and pointed out that it sat uneasily with the wider drive to find £1 billion in job cuts.
The Standard understands that Chancellor Alistair Darling was intimately involved in moves to get Lloyds to agree that maintaining a strong presence in Edinburgh was crucial to protecting the integrity of the financial system in Scotland.
Mr Darling today admitted that he was worried about protecting jobs in his own Edinburgh constituency.
"It's very sad for employees of HBOS. The new bank has made clear it wants to maintain its Scottish headquarters in Scotland. I've spoken to Lloyds TSB as well as to HBOS and I am extremely concerned about jobs," he said.
"There are many of my constituents in Edinburgh who will be affected by this and it will be very worrying for them. I know the new organisation will be very keen to make its position as clear as it possibly can. I very much want a significant presence to remain there."
But with the totemic Glenrothes byelection expected in just a few weeks, banking experts believed that the pledge was aimed at limiting the politicalfall-out from the demise of the historic Bank of Scotland.
Labour strategists feared that their lingering hopes of holding onto Glenrothes would be ruined by the job losses and the huge blow to national pride triggered by the English takeover of a bank that was founded in 1685.
With 25,000 staff north of the border, the bank is one of the biggest employers in and around the Labour constituency and the Scottish National Party accused Mr Brown of allowing "spiv" City types to wipe it out.
The SNP was set to step up its attacks today after it emerged that the Bank of Scotland name would disappear from the merged mega-bank. The new bank will be called Lloyds TSB, although the Halifax brand is likely to survive.
With more than 100,000 jobs in Scotland depending on banking, the loss of HBOS branches and jobs could have a devastating knock-on effect on the Edinburgh financial community. Just as he believed it was in the "national interest" to help smooth the takeover, the Chancellor was keen to prevent damage to the wider Scottish banking system.
Mr Darling today dismissed fears about a lack of competition resulting from the takeover, declaring that " financial stability trumps competition".
Labour is widely expected to lose Glenrothes in November, which could trigger Cabinet moves to oust Mr Brown.
SNP leader and Scotland's First Minister Alex Salmond said: "I am very angry that we can have a situation of a bank being forced into a merger by basically a short-selling bunch of spivs and speculators in the financial markets."



Thanks to Gareth of the Witanagemont Yahoo Group for bringing our attention to this article.
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