Friday, September 19, 2008

Bish bash HBOS

A worrying time for my home town of Halifax, with a significant number of local jobs sure to disappear in the wake of Lloyds' white knight takeover of HBOS. Exact numbers have yet to be announced, but I'd guess at least a thousand in the town - maybe more.

Lloyds has said that preserving jobs in Scotland will be a priority - job losses there were also small when the Halifax acquired the Bank of Scotland back in 2001, with most of the limited cutting then done at lower levels, and Edinburgh also had the honour of hosting the head office at the BoS's historic HQ on the Mound. So saving jobs there seems fair enough - the Guardian reports that the group has 6,459 employees in Edinburgh, a fairly significant chunk of well-paid employment in a city of 450,000.

But what's worrying is that nothing's been said about jobs in the Halifax' eponymous home. HBOS also employs around 6,500 in and around Halifax - and this is a town of just 90,000, with far fewer other major industries than the Scottish capital.

There are obvious political motives for favouring Scotland, which will put Labour into even more disfavour locally. Fair enough, most will say.

But the potential economic impact on the town and the surrounding area is likely to be terrible. The presence of the bank here - its head office until the BoS takeover and, after, the base of the expanded retail operations - has been the main factor in protecting the town from the worst of the industrial decline and saved it from being quite as bad as, say, Burnley. Any major reduction of HBOS employment would, alongside the general downturn, easily make it as bad as, say, Barnsley when the mines were closed. Not a happy prospect.

It might not be that bad, of course. There's inevitably going to be swingeing cuts at the common operations of the two merged groups, but it's a question of deciding how that's going to be split between Lloyds and HBOS. I'm less familiar with Lloyds' operations, but I'd guess the bulk of their operations are in London. It might then be an attractive option for them to cut jobs in that more expensive employment market, and keep them in the more cost-effective West Riding.

But even if that happens, I'd guess that in Halifax they'll be cutting from the top; and in London, from the bottom. Fewer well-paid, professional jobs here in finance, IT, management and so forth, but we'll likely still get the minimum-wage call centre and data input end. Not a great deal.

More generally, it's been fun to see the scrabbling for scapegoats to blame for the deeply shite state of the banking markets, and the faux outrage over the antics of the short-sellers and speculators who we are shocked (shocked!) to find are inclined towards amoral profit-seeking based on some rather unrealistic financial models. At least, I hope it's faux - surely no one who's been keeping the vaguest of eyes on the financial markets and the economic orthodoxy can honestly be remotely surprised?

As per the title of this blog (borrowed from Galbraith, of course), it looks like reality has caught up with its would-be escapees.

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Anonymous Alan W said...

Nice to see you look at from a Halifax perspective Tim as obviously up here it's all from a Scottish viewpoint. Glad I don't work in financial services anymore.

9:33 pm, October 12, 2008  

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