Terry Murden: Barclays' move hints at an upturn in the fortunes of the financial sector

Published on Monday 6 September 2010 15:32

The 600 jobs that Barclays is creating in Glasgow offer some relief to Scotland's battered financial services sector which, along with other indications of jobs growth in the sector, gives us hope of a return to better things.

Of course, Barclays, even with these new jobs, remains a smaller player in Scotland and cynics will ask why a bank that made close to 4 billion in half-year profits needs 6.6 million in taxpayer support. The simple answer is that a lot of jobs are easily transferable in an era of global communications and if Scotland didn't offer the money, Barclays would probably take it from somebody else.

The grant will, of course, irritate the hundreds of smaller firms who believe it should be directed to them as the so-called engine of the recovery.

But Barclays insists that the money is only part of the reason why it is bringing jobs to Glasgow. While it could have gone elsewhere, the bank has been building its presence in the country through Barclays Wealth and Barclays Stockbrokers. It makes sense to draw on an existing pool of talent.

The new shared services hub creates jobs in what is effectively a new division serving these other arms of the business and the cash-producing Barcap investment bank business and its unique role should make it less susceptible to the chop in any future cutbacks.

Barclays' announcement takes its tally of jobs in Scotland to some 2,000 and its presence builds on earlier commitments from Tesco and Virgin Money who have based their nascent banking operations in Edinburgh where they also hope to create jobs in the hundreds.

Indeed, the sector could yet produce a new jobs bonanza across the UK as Spanish bank Santander heads a list of banks proposing a hiring spree. The owner of Abbey, Alliance & Leicester, as well as the Royal Bank of Scotland branches in England and Wales, is said to be looking for 6,000 staff, though locations are as yet unclear. Metro Bank, the newcomer from the US, is also creating posts.

We are not yet out of the woods as far as job security is concerned but the newcomers are certainly helping to soak up some of those being lost and, contrary to the cynical voices, they are not in low-level, low-paid roles. Barclays is paying an average salary of 35,000 to its new hires.Its biggest problem may be working through all the applications.

Walsh remains the bullish face of an airline with big ideas

WITH its finances in tatters and its reputation for being a pensions deficit with an airline attached, it seems extraordinary that British Airways could be in a position to buy anything more than a passenger drop-off ticket at Edinburgh airport.

But now comes news that chief executive Willie Walsh has drawn up a shopping list of 12 airlines he would like to acquire.

Those employees in dispute with the firm and customers who worry whether their flight will ever take off will wonder exactly how Walsh has come up with this rather surprising plan. He insists that once the merger with Iberia is bedded down, the newly created holding company International Airlines Group will be at the forefront of further consolidation in the sector.

BA and Iberia intend to create a merged entity that could become the world's biggest airline.

Walsh has refused to name any of the 12 on the list and cautioned that no talks had taken place, but attention has focused on Australia's Qantas, Chile's LAN, South African Airways and Finnair.

Some of those on his potential list - which initially stretched to 40 - have other plans and will not entertain a tie-up. But some will balk at BA's industrial relations problems, that enormous pensions black hole and whether Walsh wants an outright takeover or some form of alliance. They will, in any case, want to see how the-BA Iberia model settles down before making any commitments.

Walsh is clearly feeling bullish about the merger with Iberia. He will become chief executive and his opposite number Antonio Vazquez will be chairman. They have held talks about their ambitious plans. The aim will be to survive an airline cull and provide synergies that benefit the companies and the travelling public through higher profits and lower prices. The budget airlines are said to be among the targets for consideration.

There will be no shortage of scepticism around this proposal, but it should at least provide some entertainment for analysts, plane spotters and Ryanair's Michael O'Leary, chief BA-baiter, who will take some pleasure in trying to knock his rival's rather grand plans.