Big names join fight for HBOS

Figures from industries including construction, retail, property and tourism are all concerned the controversial deal could be against the long-term interests of the taxpayer. They are deeply worried it could prove contrary to Scotland's future economic success and damage its corporate environment and retail banking and mortgage sectors.

Sir Tom and his contemporaries are the first to sign an open letter being sent to political leaders throughout Scotland and the UK – including Alistair Darling, the Chancellor, and Alex Salmond, the First Minister. In it, they call for a "rapid reappraisal by a suitably qualified body, such as the Competition Commission, to fully judge if public interest is being best served" by the Lloyds TSB takeover.

They back The Scotsman's call for answers to the questions it believes to be integral to the deal. The newspaper has launched a drive to determine whether the takeover is still in the best interests of the country, its taxpayers and its businesses.

The letter was penned by Dan Macdonald, chief executive of Macdonald Estates and chairman of the Scottish Property Federation, and co-organised by Mark Shaw, chief executive of Hazledene Group.

It comes as the role of the HBOS's non-executive directors was brought into question, with calls for them to put both options – staying independent or accepting the takeover – to the bank's 2.1 million shareholders.

Mr Shaw told The Scotsman: "Signatories were still coming forward last night, and we confidently expect to add considerably more over the weekend. We hope the initial group of supporters will indicate the breadth and range of concern among Scottish business and that even more will come forward."

However, the House of Lords agreed yesterday the government could waive competition law to let the deal through. An order amending the Enterprise Act 2002 allows Westminster to take steps in the interest of "maintaining the stability of the UK financial system".

It is set to be agreed by a Commons select committee on Monday, giving Lord Mandelson, the Business Secretary, the power to give the green light to the deal.

Alistair Carmichael, MP, the Liberal Democrats' Scottish spokesman, has challenged Mr Salmond to demonstrate his support for HBOS remaining an independent bank by signing a Commons motion on the issue.

He has tabled an Early Day Motion calling for government support to enable the bank to stay independent, now that the UK Bank Reconstruction Fund has made this a realistic alternative.

At the SNP conference, the Nationalists said "major questions" remain to be asked about the planned merger, including whether the bail-out announced as part of the 50 billion banking sector rescue package depended on the deal going ahead.

Meanwhile, share prices took another battering yesterday, with the FTSE 100 tumbling to a fresh five-year low as recession fears continued to shake volatile global markets.

It shed more than 5 per cent – wiping a further 52 billion from blue-chip stocks – to finish down 218.2 at 3861.4, its lowest close since April 2003.

The banking sector was experiencing mixed fortunes in the wake of the government's rescue plan. HBOS – seen as the weakest of the trio to be bailed out – was down 2 per cent, while Lloyds TSB and Royal Bank of Scotland were virtually unchanged.

The banks' shares outperformed the wider market, amid hopes the bail-out scheme could be reworked slightly to allow dividend payments to investors.

The new voices signing up to the letter join those of Jim Spowart, the creator of Intelligent Finance; Sir Donald MacKay, the chairman of the Scottish Mortgage Trust; and David Alexander, the owner of property firm DJ Alexander.

Several commentators believe that, had a proposal from the government been on the table before the deal, HBOS would have been able to survive alone.

The letter states: "We are today calling for due consideration to be given as to whether or not the overwhelming imperative still exists to waive competition law to allow this takeover to proceed without due process. There are potentially difficult economic times approaching, and this proposal will inevitably create job losses, not just in Scotland but across the UK. It will also potentially put in place non-competitive arrangements which may prejudice the longer-term interests of the taxpaying public – the very people who are providing support for the banking system."

It goes on: "In these fast-moving economic times, decisions have to be made in light of the best information available at the time. In that respect, we do not question the decisions made previously.

"However, we must also be able to adapt, and to take new decisions if this information changes, as it has undoubtedly done over the last few days.

"Given the rapid agreement of the takeover proposal, we consider it reasonable to constitute an equally rapid appraisal by a suitably qualified body, such as the Competition Commission, to fully judge if public interest is being best served, given the current circumstances – in particular the fact that both Lloyds TSB and Halifax Bank of Scotland are now participants in the government support scheme in their own right."

Mr Macdonald said: "I strongly believe that shareholders should be presented with two options and allowed to choose between them."

Mr Spowart called on the HBOS's non-executive directors to make a stand.

He told The Scotsman: "The HBOS non-executives have a fiduciary duty to their shareholders in this matter. Were they consulted over the revised terms of the takeover? And have they given their approval?"

He said he would like to see the non-executives help to ensure that balanced arguments for staying independent and for agreeing to the bid were put before shareholders.

Those who signed the letter...

Brian Stewart

Former chief executive, RMJM, the Scottish architecture firm which was part of the group which designed the Scottish Parliament building.

Fiona Morton

Managing Partner, Ryden, one of the largest independent firms of commercial property consultants operating in Scotland.

Alan Macdonald

Managing director, Dawn Construction, the largest independent property and construction group operating in Scotland.

Colin Cumberland

Managing director, Applecross, property developer with major interests in Edinburgh and Glasgow.

Sir Tom Farmer

Founder Kwikfit, entrepreneur and philanthropist.

Michael Laing

Managing director, Laing the Jewellers, one of Edinburgh's oldest jewellery firms, founded in 1840.

Malcolm Fraser

Malcolm Fraser Architects is winner of numerous awards including those for Dance Base and the Scottish Poetry Library.

Harvey Aberdein

Managing partner, Aberdein, Considine & Company, one of Scotland's leading solicitors and estate agents.

Others opposed to plan…

Other signatories to the letter:

Donald Macdonald, executive chairman, Macdonald Hotels

Bob Fisher, managing director, Colliers

Dan MacDonald, chief executive, MacDonald Estates

Mark Shaw, chief executive, Hazledene Group

David MacLeod, managing director, Rybka

Those who have previously questioned the takeover:

Hector Sants, chief executive, FSA

Alex von Ungern-Sternberg, financier

Sir Donald Mackay, chairman of the Scottish Mortgage Trust

JP Morgan, Socit Gnrale

David Alexander, owner DJ Alexander

Jim Spowart, creator Intelligent Finance