13/08/2010 - Despite the Profits, Bank staff and Small Businesses still being squeezed

LAST WEEK a number of Britain’s major banks announced their first-half figures with two of the banks bailed-out by the taxpayer, Lloyds Banking Group and Royal Bank of Scotland, reporting profits of £1.6bn and £1.1bn respectively.  The Scotsman (5 August 2010) quotes Lloyds chief executive Eric Daniels as saying of his company’s results: “We believe the next several periods will be even better.  We have very good momentum”.

So are we hearing some good news from banks for a change?  Not for hard-working bank staff it would seem.  Already the merging of Lloyds TSB and HBOS has resulted in the loss of 16,000 posts and while Mr. Daniels would not comment on the possible size of further job cuts, he made the rather ominous statement: “There is undoubtedly going to be further role reductions……………We are only half way through the integration”.

Another victim of the bankers’ crisis was small businesses who found their credit being choked off.  Are they finding life any easier now that the banks are starting to make money again?  The Daily Mail (7 August 2010) did a fine job of blowing the whistle on the banks’ continuing lamentable failure to increase lending to companies with RBS’s lending barely up on last year despite the big jump in profits.  The paper also pointed out that in Scotland alone some 600 firms have shut down in the first seven months of this year and that if things continued at this rate then 2010 would be the worst year on record for company failures in this area of the UK.

Will the Con-Dem government take a tough line with the banks?  Surely the whole point of the bail-out of the banks was to protect jobs and the wider economy as a whole, not simply to save individual banks?  The government must use its influence to ensure that the bankers take seriously the need to save jobs in both their own companies and do their bit to keep other businesses afloat, not just fill their coffers.