Bank workers are left in limbo

Lloyds TSB today confirmed its £12.2 billion takeover of Halifax Bank of Scotland - and with it the possible loss of 40,000 jobs.

Among those today fearing for their futures were 1,400 workers employed in the West Midlands by Birmingham Midshires.

Midshires is part of HBOS, which has effectively been saved by the Lloyds TSB deal.

More than 135,000 UK staff are employed nationally by both firms. But thousands of jobs could be lost if they close branches under the restructuring.

Chancellor Alistair Darling today said the merger was "absolutely necessary" to maintain the stability of British banking.

He said it was necessary for the Government to act "quickly and decisively" to facilitate the merger by waiving competition requirements, which might have applied "in happier times.

I want to make it absolutely clear we will do everything necessary to maintain the stability of our financial system," he said.

Mr Darling said the result of the deal would bring stability to the whole of the banking system and provide security for depositors and borrowers.

He said the Government had been monitoring the situation at HBOS for a long time, adding: "Bluntly the best possible outcome was for Lloyds and HBOS to come together, creating a large, stable institution."

Today angry staff at Birmingham Midshires' headquarters in Pendeford, Wolverhampton, revealed they heard the news of the takeover through the media and were still waiting for news about their future.

"It was not the best way to discover your job is on the line after 20 years of working for the company," said a call centre worker today.

"There had been rumours about our future on Monday because of the fall in the share price. But the first we knew about a possible merger was when colleagues saw it on-line yesterday.

"The information spread through the building like wildfire. We finally got a global email from the chief executive hours later confirming merger talks were going on."

Birmingham Midshires managing director Nigel Stockton today refused to comment, saying it was too soon to draw conclusions.

Shares in HBOS this afternoon were up 52p at 199p. Meanwhile the FTSE briefly rose above 5000 before falling back to 4940, up 28 on its start.

By Business Editor Jim Walsh