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Taskforce prepares to help laid-off workers
A rapid response taskforce will be sent into Halifax to help potentially thousands of laid-off workers to retrain and find new jobs in the wake of the reported merger, officials said yesterday.
Regional development agency Yorkshire Forward said it was liaising closely with the stricken bank and was ready to mobilise its special taskforce, activated whenever a business lays off a number of people which will have a "significant" effect on the regional economy.
Calderdale councillor Paul Rogan said it would be devastating for the town if there were job losses on the scale being reported. "There would be a deafening crash across Calderdale and beyond if that happened," he said.
"We all know what happens in these situations – it is the company that is doing the taking over that keeps its staff, that is Lloyds, and the company that is being taken over, that is HBOS, that sheds staff. It's not rocket science.''
The acting leader of Calderdale Council, Stephen Baines, said he was very concerned.
He said: "I am concerned if one job is lost and if it does go ahead there are likely to be job losses.
"We have always tried to work to preserve as many jobs in Calderdale – after all, HBOS and the council are the two biggest employers in the area.
"People who work for HBOS tend to live in the area so it will have an effect on the local economy."
But staff in the Halifax head office were working normally.
Deborah Durkin, 39, from Bradford who works in the fraud department, said: "It's just business as usual to be honest, we have not been told anything and people are just getting on with their jobs.''
Latest figures show that unemployment in Yorkshire has soared over the summer with a further 24,000 jobs lost in three months.
The total number unemployed in the region now stands at 163,000, or 6.2 per cent of its population, in the measurements from May to July this year released by the Office for National Statistics.
It is the second highest rise of any region with only the South East registering a greater number in the quarter – 28,000. Third-placed region is the East Midlands with 13,000. Four regions saw employment rise.
Tony Cherry, regional chairman of the Federation of Small Businesses, said it was mostly companies employing less than 50 people which were shedding jobs in a desperate attempt to stay afloat in worsening economic conditions.
He said: "We're not seeing the announcements of large-scale redundancies in Yorkshire so these numbers seem to be coming from small and medium sized businesses, which is very concerning for us.
"What is certain at the moment is that small businesses are finding it hard to pass on the increasing cost of materials, gas and fuel and are often carrying out contracts at a loss, which is not sustainable."
Sectors in the region doing particularly badly include haulage, legal and financial services, building and property sales.
Nick Pontone, director of policy at the Yorkshire and Humber Chambers of Commerce, said: "It's not surprising that job losses are jumping up but it does surprise me that Yorkshire is losing jobs quicker than other regions.
"There's a feeling now that the last domino is toppling – first it was business confidence then order books then sales, and now jobs is the last domino to go. We will not see any shafts of light until business confidence picks up."
Thea Stein, director of economic inclusion at Yorkshire Forward said it was working closely with Job Centre Plus, local authorities and employers to ensure people who lost their jobs had access to the vacancies being created in the region.What it means to savers
Savers were urged not to panic yesterday as speculation continued over the future of Halifax Bank of Scotland.
Commentators stressed that people's money was safe with the group, as the focus shifted from HBOS's funding position to news of the merger talks with Lloyds TSB.
Kevin Mountford, head of banking at moneysupermarket.com, said: "HBOS is fundamentally a sound institution with sufficient access to capital.
"Its weak share price bears no relation to the undoubted strength of the business. It is not only one of the largest retail deposit takers in the UK, but also has a very diverse business."
He added: "I don't see how industry or Government would allow a major institution to disappear in the current climate."
Although it now appears HBOS will not go under, savers' money would still have been protected under the Financial Services Compensation Scheme which pays out the first 35,000 that people have lost. A consultation is under way over raising this limit to 50,000.
However, it can take weeks and even months for people to get their money.
What it means to small shareholders
Shareholders with HBOS could receive around 2.30 a share as part of the proposed takeover.
Lloyds TSB had been reported as willing to pay no more than 2 for each share in HBOS.
The figure is less than a third of the stock's value just six months ago and will concern many investors who have seen their shares fall more than 80 per cent in the past year.
The news would be particularly damaging to those smaller shareholders who picked up holdings following the then Halifax's demutalisation, many of whom are from Yorkshire.
The bank has around 2m smaller investors who between them own around 27 per cent of the firm's capital.
However the price was still ahead of the current value for shares in HBOS, which has been battered over the past few days and is now worth less than half the value a week ago.
At one point yesterday the group's share price was 88p, less than a third of their value first thing on Monday morning.
Speculation over the merger with Lloyds TSB helped the price to settled on 147.10p, down nearly 20 per cent from the previous day's trading.
QUOTES
"I think we do need to reassure savers, the people who have mortgages with HBOS, that the future of that institution is sound and if that requires a merger then so be it."
Shadow Chancellor
George Osborne.
"It is shocking to see a major British bank brought to its knees by an attack by hedge fund speculators engaged in 'short selling'. They were only able to speculate because they knew HBOS had a government guarantee and would be bailed out by the taxpayer. If Lloyds hadn't stepped in, the Government would have had to take over."
Liberal Democrat Treasury spokesman Vince Cable
"A shotgun marriage of HBOS and Lloyds TSB would not be in the best interests of British consumers."
Kevin Mountford,
head of banking at moneysupermarket.com
"We will not accept any compulsory redundancies as a result of this merger. The country is in the grip of a credit crunch and the cost of living is spiralling. Lloyds TSB and HBOS must take a socially responsible approach to this merger and make the wellbeing of their hard-working staff a priority during these difficult times."
Unite deputy general secretary Graham Goddard
"The Financial Services Authority has worked intensively with all major UK banks to ensure they have credible capital and liquidity plans. We are satisfied that HBOS is a well-capitalised bank that continues to fund its business in a satisfactory way."
FSA statement
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Weather for Yorkshire
Saturday 26 May 2012
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Temperature: 8 C to 21 C
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