Civic pride meets global financial crisis

http://news.bbc.co.uk/go/rss/-/1/hi/business/7655415.stm

Version 0 of 1.

By Kevin Peachey Personal finance reporter, BBC News, Halifax

The future is expected to be gloomy for some HBOS staff

With banking jobs at risk, the future of the West Yorkshire town of Halifax was made clear in the local newspaper's leader column.

"The town of Halifax might find itself less and less important as a financial centre, with loss of jobs and prestige," it said.

"This process of marginalisation is the biggest single worry."

The views were not published during the current financial crisis but on 10 September, 2001, as HBOS - a merger of Halifax and Bank of Scotland - began trading.

Now, with HBOS in the throes of a takeover by Lloyds TSB and the government set to take a stake of about 40% in the new superbank, the fears of job losses have resurfaced.

Conservative leader David Cameron was in Halifax on Monday.

What he would find is that in Halifax, as in Bingley - the home of Bradford and Bingley - and in Newcastle during the collapse of Northern Rock, there has still been pride in these banks during their fall.

'Sense of loss'

"This bank was built on the sweat of local, dedicated people," said one HBOS staff member of 25 years at a public meeting.

The mood in the town on the day of the takeover news was one of numb shock... this turned in a day or two to determination John FurbisherEditor, Halifax Evening Courier

"It is very hard to think that will be lost. It feels like a bereavement."

His was a voice speaking for many - not just staff but locals who are shareholders in the bank.

Stallholders and shopkeepers say that they witnessed increased sales in recent years whenever bonuses were paid or the share price rose.

On Monday, it was announced that the merger with Lloyds TSB had been renegotiated - meaning that HBOS shareholders will receive a smaller percentage of Lloyds shares than they had expected.

In the House of Commons earlier in the month, the Conservative MP for Shipley, Philip Davies, said many employees of Bradford and Bingley were also small shareholders and were left holding shares that had sunk in value.

Chancellor Alistair Darling replied: "A lot of people who are not big-time share dealers, people living locally who thought they were doing the right thing, they bought the shares because they wanted to support their local company and then the company fails.

"We will do what is right but I am afraid at this stage it really is quite impossible to say what is going to be left at the end of the day because this bank frankly does have an awful lot of assets that at the moment are not worth very much at all."

This was the same situation that Northern Rock found itself in a year ago, he added.

Fight-back

During the height of the crisis at Newcastle-based Northern Rock, the North East's regional morning newspaper The Journal fought a campaign to save the bank.

Northern Rock's troubles led to job losses

It invited the paper's readers to open accounts with Northern Rock in the belief that it was a "sound business", and the paper rallied support for the bank in the region and beyond.

The paper pointed a finger of blame at the regulators, it recalled Northern Rock's work in supporting the community and reminded people of the regional effect of a loss of jobs.

The seeds of a similar reaction can be seen in West Yorkshire now.

On the day of the part-nationalisation of Bradford and Bingley, Robert Harrison, president of the Bingley Chamber of Trade and Commerce stood outside the concrete hulk that is B&B's former headquarters to say that the town's residents owed the bank a great deal of gratitude for its money and services.

"I think it was a very sad occasion that such an apparently well-run organisation is brought to its knees, it seems, by no fault of their own," he said.

Meanwhile in Halifax, where HBOS is the town's second biggest employer after the local authority, the town's daily newspaper - the Evening Courier - is fighting a "Bank on Halifax" campaign.

As it did seven years ago, it is fighting for jobs and for retail banking expertise to remain in the town.

"In the hard-nosed world of banking, sympathy butters no parsnips," says the paper's leader column.

Its editor, John Furbisher, says it will fight - along with the local council and regional development agency - to promote the "building, brands and brains" of the town to the bank's potential new owners Lloyds TSB.

"The mood in the town on the day of the takeover news was one of numb shock as people suddenly thought what would we do without it. This turned in a day or two to determination," he says.

Changing High Street

The town is blessed with stunning architecture, including the pillared Lloyds TSB branch in the bustling centre.

Halifax needs to be on the map, it cannot absorb huge job losses Halifax MP Linda Riordan

There is an element of irony in the fact that it towers over the Old Cock Inn. It was here that a group of men met in December 1852 to set up an investment and loan society for workers that would become the largest building society in the world.

Many believe that decades of history has been ruined by the short-term money making of traders in the City.

There are 6,500 employees of HBOS in the district of Calderdale, mainly at the retail banking headquarters and a huge, modern data centre.

"Some workers see it as a family firm and the markets have been gambling with people's futures," says Halifax MP Linda Riordan.

"Halifax needs to be on the map, it cannot absorb huge job losses."

She expects another battle with Scotland over some of these jobs, and this might involve a political dimension.

However, Ged Nichols, general secretary of Accord - the union for HBOS staff, says that the alternative to a takeover would have been even worse.

He is calling for jobs in the merged business to all be based in the UK to minimise the potential number of redundancies.

One employee who is definitely going is HBOS chief executive Andy Hornby, who will leave when the takeover deal is completed.

He knows, as many do, that a lot of pride has been at stake.