Banking Crisis - Treasury Contents

Memorandum from Ms Sheila Kettles

  I am writing to you as a stakeholder in HBoS. I am a staff member, customer, shareholder and payer of income tax. I am also a Workplace Representative in the HBoS Retail Contact Centre in West Marketgait, Dundee for the Unite union. There are approx 400 staff in this Centre.

  I attended a meeting on 28th October at the House of Commons with other union reps within the Finance Sector where we launched the Unite Social Contract for Financial Services.

  One of the biggest fears I, and the members I represent, have at the moment is the uncertainty of our situation within HBoS. We are receiving daily communications regarding the take-over by Lloyds TSB from the HBoS advising that this take-over is in all our best interests.

  The report contained in Wednesday's "Scotsman" that Lloyds have retained Andy Hornby, current CEO of HBoS, at a reported annual salary of £720,000 on a consultancy basis has both angered and confused me. The Government have injected serious amounts of money into banks and many of us are unaware if our jobs are secure. Andy Hornby has contributed to the situation we find ourselves in and due to his `knowledge of HBoS' is being retained on a salary that most of us will not earn in a lifetime far less a year. Mr Hornby is now advising the best course of action is to let Lloyds TSB take-over HBoS knowing he will be paid a substantial amount of money from the Company he is promoting. Would this not count as a conflict of interest?

  The most recent "message from Andy" on 10th Nov and sent to all staff speaks of the recent letter from Peter Burt and George Matthewson to the board of HBoS. Quotes contained within this message include: "We (The Board and CEO) remain very much of the view that the Lloyds TSB deal continues to be in the interest of all our stakeholders, including colleagues. It provides certainty, real financial benefits", "We would all like the uncertainty to go away. That is why the deal with Lloyds TSB is important. It removes that uncertainty for colleagues and our other stakeholders."

  Given that Mr Hornby has secured a £720,000 per annum consultancy `fee' from Lloyds TSB, it certainly will provide `real financial benefits' to him but what about the workers who will lose their jobs—figures suggest this could be 20,000 colleagues from both HBoS & Lloyds TSB work force. Where is their "real financial benefit"?

  I believe Lloyds TSB off-shore some of their functions including their contact centres (referred to as Call Centres in some Companies.) This is giving cause for concern on several issues. It could mean that our jobs in the local Contact Centres (there are also contact centres at Pitreavie, Dunfermline and Motherwell) are more at risk. I believe that Lloyds TSB and other financial institutions have to be told that off-shoring of jobs should be halted. British tax payers have contributed to the funds to assist these banks so surely jobs should remain in Britain to help the British economy.

  There is also a social & corporate responsibility issue in that if for example the Dundee Contact Centre was closed through off-shoring of jobs, this would impact heavily on Dundee and the surrounding area. Colleagues travel in from Angus, Fife and Perthshire as well as those living in Dundee.

  Colleagues in the Finance Industry have for years been encouraged to "sell" other products from their employer which the Company may deem to be "beneficial to customers". Whilst our customers should be able to benefit from other financial products, whether or not customers decide to take up a product should not impact on workers. Unfortunately, these "sales" make up a large part of our targets and have an effect not only on bonuses but also any annual pay awards. These products include credit cards, personal loans and upgrading of accounts to accounts which have a monthly fee attached to them. Despite the "credit crunch" and the take-over situation we now find ourselves in, the targets for selling these products have remained the same. It is this sell, sell, sell-target driven culture which has encouraged a "profit before people" ethos that has contributed, I believe, to the state HBoS and other Financial Institutions now find themselves in.

  I believe an independent inquiry into the situation between HBoS and Lloyds TSB has to be looked at seriously. The issue of "short-selling" of shares appears to have affected the HBoS price since last August. There must be some method ie inland revenue, of tracing dealings of this nature and who has benefited.

  The takeover of HBoS by Lloyds TSB would normally have gone through the monopolies commission however given the situation this has not happened.

  It appears some people may have already benefited or will benefit from a situation which could see many workers without jobs throughout Britain.

  As the Chair of the Treasury Committee, I sincerely hope these points are raised on, not only my behalf but on behalf of the many people this unprecedented situation will affect.

November 2008

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