Jeremy Warner: C&G pays the price for Lloyds banking merger

Outlook So farewell then Cheltenham & Gloucester, whose high street brand dates back to the mid-19th century but, like so much else, is now falling victim to the relentless march of "progress" – in this case the cost-cutting integration of Lloyds TSB with Halifax Bank of Scotland.

All 164 C&G branches are to be closed because of the overlap with HBOS and Lloyds TSB outlets. The brand will live on as a telephone, intermediary and postal service, but that's obviously not the same thing and is in any case small consolation to the 1,600 C&G employees who will lose their jobs.

C&G has been owned by Lloyds Bank since the mid-1990s, when it was acquired as one of the first building society demutualisations. It might therefore be argued that the brand would have disappeared eventually in any case, regardless of the HBOS merger. C&G customers are to be redirected not so much to Halifax branches, but to those of Lloyds TSB, where services are already shared.

All the same, minds have been concentrated by the merger and apart from anything else, it has served to convince the newly named Lloyds Banking Group that it now has too many mortgage brands sheltering under one umbrella. There are at least six of them and possibly more. Even in a bank that still claims to champion a multi-brand strategy, this is bound to look excessive.

Lloyds Banking Group is already closing down HBOS's Clerical Medical Insurance Group because of its overlap with the existing Lloyds insurance brand, Scottish Widows. More brands and operational centres are certain to go too before the "integration" is considered complete.

Brands that were once household names wither and die all the time, and if what Lloyds is doing were just part of that process, I wouldn't be so concerned. But this is different. To justify a takeover that, in most respects, has turned out to be a disaster, Lloyds TSB has to deliver billions of pounds a year in cost cuts.

A fundamentally anti-competitive purpose lies at the heart of the brand cull now taking place. Lloyds is crunching together once competing businesses in the hope of hanging on to their combined market share and then exploiting the resulting dominance to drive up spreads and customer charges.

I hate to heap yet more blame for the sins of the world on Gordon Brown's doorstep, but the now all-too-apparent adverse consequences of the Lloyds/HBOS merger – the disappearance of otherwise viable brands, job losses and all too likely exploitation of the customer base – carry the Prime Minister's official blessing.

Normal competition rules were suspended to allow this monstrously monopolistic merger to take place. Even at the time, this seemed to serve no obvious public good other than saving Mr Brown the political embarrassment of having to nationalise HBOS.

Even that judgement has turned out to be flawed. So dire was the state of HBOS's books that the deal very nearly destroyed Lloyds TSB too. In the end, the Government was forced to bail out both banks. A damaging and unnecessary consolidation has been forced on the British public, which has failed to serve even the sectarian political purpose of enhancing the PM's chances of survival.

Mr Brown allowed the merger because he thought it offered a solution to the banking crisis. This turned out to be largely wrong. Instead, it's resulted only in a conspiracy against the public. The Tories have promised to use the Government's shareholding in Lloyds Banking Group to explore a possible breakup. Whatever they do, it is regrettably going to come too late for C&G.

Start your day with The Independent, sign up for daily news emails
ebooksA special investigation by Andy McSmith
An easy-peel potato; Dave Hax has come up with an ingenious method in food preparation
voicesDave Hax's domestic tips are reminiscent of George Orwell's tea routine. The world might need revolution, but we like to sweat the small stuff, says DJ Taylor
Arts and Entertainment
Jay Z has placed a bet on streaming being the future for music and videos
Arts and Entertainment
Festival-goers soak up the atmosphere at Glastonbury
Japan's population is projected to fall dramatically in the next 50 years (Wikimedia)
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45,000: SThree: SThree Group have been well e...

Ashdown Group: IT Manager / Development Manager - NW London - £58k + 15% bonus

£50000 - £667000 per annum + excellent benefits : Ashdown Group: IT Manager / ...

Recruitment Genius: Sales Consultant / Telemarketer - OTE £20,000

£13000 - £20000 per annum: Recruitment Genius: Scotland's leading life insuran...

Ashdown Group: Training Programme Manager - City, London

£40000 - £45000 per annum + benefits : Ashdown Group: Training Programme Manag...

Day In a Page

NHS struggling to monitor the safety and efficacy of its services outsourced to private providers

Who's monitoring the outsourced NHS services?

A report finds that private firms are not being properly assessed for their quality of care
Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

The Tory MP said he did not want to stand again unless his party's manifesto ruled out a third runway. But he's doing so. Watch this space
How do Greek voters feel about Syriza's backtracking on its anti-austerity pledge?

How do Greeks feel about Syriza?

Five voters from different backgrounds tell us what they expect from Syriza's charismatic leader Alexis Tsipras
From Iraq to Libya and Syria: The wars that come back to haunt us

The wars that come back to haunt us

David Cameron should not escape blame for his role in conflicts that are still raging, argues Patrick Cockburn
Sam Baker and Lauren Laverne: Too busy to surf? Head to The Pool

Too busy to surf? Head to The Pool

A new website is trying to declutter the internet to help busy women. Holly Williams meets the founders
Heston Blumenthal to cook up a spice odyssey for British astronaut manning the International Space Station

UK's Major Tum to blast off on a spice odyssey

Nothing but the best for British astronaut as chef Heston Blumenthal cooks up his rations
John Harrison's 'longitude' clock sets new record - 300 years on

‘Longitude’ clock sets new record - 300 years on

Greenwich horologists celebrate as it keeps to within a second of real time over a 100-day test
Fears in the US of being outgunned in the vital propaganda wars by Russia, China - and even Isis - have prompted a rethink on overseas broadcasters

Let the propaganda wars begin - again

'Accurate, objective, comprehensive': that was Voice of America's creed, but now its masters want it to promote US policy, reports Rupert Cornwell
Why Japan's incredible long-distance runners will never win the London Marathon

Japan's incredible long-distance runners

Every year, Japanese long-distance runners post some of the world's fastest times – yet, come next weekend, not a single elite competitor from the country will be at the London Marathon
Why does Tom Drury remain the greatest writer you've never heard of?

Tom Drury: The quiet American

His debut was considered one of the finest novels of the past 50 years, and he is every bit the equal of his contemporaries, Jonathan Franzen, Dave Eggers and David Foster Wallace
You should judge a person by how they peel a potato

You should judge a person by how they peel a potato

Dave Hax's domestic tips are reminiscent of George Orwell's tea routine. The world might need revolution, but we like to sweat the small stuff, says DJ Taylor
Beige is back: The drab car colours of the 1970s are proving popular again

Beige to the future

Flares and flounce are back on catwalks but a revival in ’70s car paintjobs was a stack-heeled step too far – until now
Bill Granger recipes: Our chef's dishes highlight the delicate essence of fresh cheeses

Bill Granger cooks with fresh cheeses

More delicate on the palate, milder, fresh cheeses can also be kinder to the waistline
Aston Villa vs Liverpool: 'This FA Cup run has been wonderful,' says veteran Shay Given

Shay Given: 'This FA Cup run has been wonderful'

The Villa keeper has been overlooked for a long time and has unhappy memories of the national stadium – but he is savouring his chance to play at Wembley
Timeless drama of Championship race in league of its own - Michael Calvin

Michael Calvin's Last Word

Timeless drama of Championship race in league of its own