Labour trying to undermine rival HBOS bids–Salmond

ALEX Salmond increased the pressure on the UK government over the HBOS takeover yesterday, accusing Labour politicians of "leaking and briefing" in an attempt to undermine rivals to the Lloyds TSB bid.

He also accused Gordon Brown, the Prime Minister, and Alistair Darling, the Chancellor, of showing "political hostility" towards any new bidders for the Scottish-based bank.

Mr Salmond's attacks represented a major escalation in the simmering dispute between the two administrations over the proposed takeover of HBOS by Lloyds TSB.

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Mr Brown and Mr Darling were instrumental in smoothing the path of the Lloyds TSB bid, agreeing to waive normal competition rules and giving the deal their approval when HBOS was in a precarious position.

Mr Salmond has questioned the wisdom of the bid, principally because of the potential threat to Scottish jobs and headquarter functions, but also because of a report from the Office of Fair Trading, which warned that the merger could harm competitiveness.

Relations in public remained cordial until earlier this week when it emerged that Bank of China, a potential bidder for HBOS, had decided not to pursue the matter any further, amid reports of a "cold shoulder" from Downing Street.

This issue was seized on by Alex Neil, an SNP MSP, who said news of Bank of China's interest had appeared on a BBC blog "within minutes" of a meeting between Bank of China and UK Treasury officials.

A spokesman for Alex Salmond then said: "There has been a degree of briefing and leaking on the apparent approach by the Bank of China to undermine the development of any alternative bids."

He said the Scottish Government would be raising the issue with Westminster, and added:

"The UK government should make it very clear that we are talking about a level playing field in relation to any offer that comes forward."

At First Minister's Questions yesterday, Mr Salmond told MSPs: "I do find it difficult to reconcile what I interpret as a clear political hostility to any alternative over this merger with the public pronouncements of a level playing field."

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But a UK government spokesman said: "The Lloyds TSB bid is the only one on the table.

"Our priority is to save the jobs in HBOS and our actions have been welcomed by the unions who represent the HBOS workers," he said. "The only people who are playing politics with this are the SNP."