Downing Street has let Scotland down

Published on Thursday 11 December 2008 20:09

THE shareholders of Halifax Bank of Scotland will vote today to accept or reject the proffered takeover by Lloyds TSB. The likely outcome – given the relentless pressure from the failed HBOS management and a worried government – is that they will vote to approve the takeover, closing a story that began in Edinburgh on 17 July, 1695.

The Prime Minister and the Chancellor (who, let us not forget, is an Edinburgh MP) have told us repeatedly that the takeover is the only sure way to save the 300-year-old bank from collapse, and that it is necessary to safeguard the stability of the entire financial system.

This newspaper has contested both arguments: the Treasury's recapitalisation programme has removed the threat to HBOS as a going concern, while the Bank of England's monetary operations have restored sanity to the markets.

Yet even if we accept the need for the takeover in the interests of stability, the loss of HBOS will have profound negative consequences for Edinburgh and Scotland. The charge against the Prime Minister and the Chancellor is that – even if they are right about HBOS – they have singularly failed to make any provision for dealing with the disastrous results that could follow.

First, the Office of Fair Trading has produced an independent study that shows the enlarged Lloyds organisation will be able to exert monopolistic powers. Specifically, the OFT found that small and medium-sized businesses in Scotland, and people with current accounts and mortgages, will suffer from the reduction in competition. In normal circumstances, even if a government or the regulatory authorities are minded to accept a merger on public interest grounds, they will always demand a commitment to eliminate the worst anti-competitive aspects of the deal.

Yet in the case of the HBOS takeover, no minister has demanded that Lloyds TSB agrees to deal with the specific problems that the OFT identified. This is a glaring political failure and it is one that the government should rectify immediately, using its controlling ownership of both banks.

If the takeover proceeds, Edinburgh will lose a major corporate HQ – a body-blow to the economy. Jobs will be lost not only in HBOS itself. Many local businesses will suffer from the disappearance of such a large corporate customer. Above all, the loss of decision-making from Scotland will weaken the nation's business structure.

Again, neither the Prime Minister, the Chancellor nor the new Secretary of State for Scotland (who has adopted a proactive role in matters economic) has offered any comfort in responding to these problems. They may pretend that dealing with the local consequences of the takeover is a job for Holyrood, but Edinburgh voters may well take a different view.

The likely loss of HBOS is an unnecessary tragedy for Edinburgh, Scotland and the wider economy. Not to deal with its negative consequences is just as bad.

Hot pursuits need careful thought

FOUR people were killed yesterday when a stolen car crashed into a shop in west Yorkshire. It is thought the car was being pursued by the police. This is no isolated incident: the pursuit of stolen vehicles frequently leads to such tragedies. In November, for instance, three people were killed in a police car chase in Oldham. On the same day another person was killed when a car being followed by police crashed on the M1 near Chesterfield.

The real danger in such incidents is that harm will come to innocent members of the public, not to mention police officers themselves. This has led to calls – in the United States as well as Britain – for legal limits to be placed on the right of police officers to engage in hot pursuit. There are even those who worry that the popularity of reality television programmes showing film of such car chases is leading some officers to take unprofessional risks.

Common sense should tell us that it would be a bureaucratic nonsense to try and impose some blanket ban on hot pursuit. The circumstances in which such car chases arise are too varied to be prescriptive – chasing a drunken teenager in a stolen car is a very different matter from pursuing a would-be suicide bomber.

The officers involved face very difficult decisions as to where the best interests of the public lie in each case. They should be supported by intensive training.

Post-haste accessories

POSTAL workers are complaining that the Royal Mail is pressurising them into walking faster to complete their rounds. The Communication Workers Union claims that delivery staff have been ordered to walk at a speed of 4mph, an increase over a previous target of 2.4mph. But surely if Britain's posties are going to be made to walk faster, it is only right that the Royal Mail offers them some of the increasingly hi-tech footwear that is available.

For instance, Nike and Apple have joined forces to produce a pair of trainers which link a sensor in the sole to your iPod. This interrupts the music to tell you how many miles you've run and how fast. The data can even be webcast to share with fellow joggers (or posties). It wouldn't take much of a tweak to these shoes to let us all know where Postman Pat was on his rounds – so we know when to expect delivery.

Another new hi-tech shoe is called Aphrodite, and comes with a GPS, an alarm to scare off dogs and a silent alarm that transmits the location of the shoes to the emergency services. This shoe was designed with the safety of women in mind, but we can see the advantages for posties of both sexes. Finally, what can we do for the postie with sore feet after walking at 4mph? The answer: the Good Vibrations shoe. By hitting a switch, this turns from a running shoe into a foot massager. We can hear Jess the Cat purring now.