Protest ahead of HBOS takeover vote

Unions staged a protest today as Lloyds TSB shareholders prepared to vote on the proposed takeover of ailing rival HBOS.

Lloyds and HBOS employees are worried over thousands of possible job cuts if the merger goes ahead.

Members of the Unite union held the demonstration outside the Scottish Exhibition and Conference Centre in Glasgow, where Lloyds shareholders are meeting to vote on the controversial takeover.

Wearing t-shirts and holding banners with the slogan "secure jobs = secure banks", the union members handed out leaflets to arriving shareholders.

Derek Simpson, Unite General Secretary, said: "Employees from HBOS and Lloyds TSB deserve to have their concerns heard at the shareholders' meeting.

"Along with the loyal customers, employees of Lloyds TSB and HBOS are the life-blood of these banks.

"Without the continuous dedication of these employees throughout the ongoing financial crisis there would be no viable takeover for shareholders to discuss at their meeting.

"The protestors will demand that Lloyds TSB shareholders do not merely consider the financial rewards of a takeover of HBOS, but the wider social and employment implications."

Unite is demanding that its employees' employment security is guaranteed and their pension arrangements are protected and improved.

They also want the union recognised as a "key stakeholder" in the future of the financial services industry.

A merger would create a banking giant with 145,000 staff and 3,000 branches across the UK.

Competition rules have been waived to allow the deal.

Lloyds' management believes the proposed deal "represents a compelling opportunity" to create the UK's leading financial services group.

As well as the HBOS takeover, Lloyds shareholders will also vote on plans to raise a total of £5.5bn through the issue of these shares and special preference shares to strengthen its balance sheet.

HBOS shareholders will vote themselves on whether to accept the deal in December, but were warned by their own chairman Dennis Stevenson last week of the risk of nationalisation if the takeover falls through.

More than 200 shareholders attended today's meeting.

As they arrived, they were handed leaflets by the Lloyds TSB Group union.

It states that the union's support for the takeover is conditional on the Lloyds TSB's board agreeing with the union measures to "remove the threat of large-scale compulsory redundancies".

One shareholder said he was undecided.

"I'm leaning towards supporting the deal, but it is difficult. I think it's a great deal for Lloyds TSB but I don't think it is a good deal for the country.

"If a few grossly overpaid bankers lose their jobs, that is not a bad thing, but if there is a subsequent amalgamation of branches, then that would not be good."

Another shareholder said: "I seriously doubt this merger would be good for the workers.

"I'm concerned that the bank won't be able to do anything without seeking permission from the Government."

The vote, which is being taken electronically, is expected this afternoon.

Lloyds TSB chairman Sir Victor Blank told shareholders the acquisition would transform the bank's position in the highly competitive UK market.

He said: "The proposed acquisition of HBOS is a landmark event in the history of Lloyds TSB and for the financial services industry.

"It gives us a unique strategic opportunity to create the leading financial services company in the UK."

Sir Victor said the deal would result in the creation of a "great British bank".

He added: "We do appreciate that many of our employees may feel apprehensive at this time but, in creating what we believe will be the UK's leading financial services company, we believe the combination will generally provide enhanced opportunities for those who work in our group."

The chairman said it was "inevitable" that there would be some rationalisation, but that employees would be consulted.

There was a round of applause when one shareholder suggested that the deal was "cooked up at a cocktail party", expressed his dismay that the Government had gone above competition rules for the proposed merger to be considered and told the meeting: "Most of us think this deal stinks."

Another said shareholders were being "robbed" and questioned, if the banking system was in such dire straits, whether the merger was necessary.

Sir Victor said: "For very complex reasons originating in the United States we have had a banking system which has essentially nearly collapsed.

"The Government have had to step in order to secure the position of banks."

He added that the current economic situation which everyone found themselves in was one of "extraordinary chaos".

"It is circumstances that are very complex and very serious and we have never seen the like of it before," he added.

Sir Victor added that two independent, non-executive directors would be appointed to represent all shareholders.