The Unite union yesterday warned that up to 25,000 banking jobs are at risk with the government’s plan to sell off the profitable parts of the state-aided high street banks, Royal Bank of Scotland (RBS) and Lloyds Banking Group (LBG).
RBS and Lloyds announced that they are selling nearly one thousand branches.
The banks claimed the sales were demanded by the European Commission to safeguard competition concerns after they were bailed out by the UK government.
RBS said it will sell 318 branches, while Lloyds will dispose of more than 600 branches over the next four years.
This comes as the government handed over another £30bn bail-out of taxpayers’ money and agreed to absorb £250bn of ‘toxic’ debt.
Unite said that ministers, the employers and UK Financial Investments Ltd (UKFI) – set up in 2008 to manage the government’s investments in banks – have a duty to prioritise saving jobs over securing the best price for the banks’ assets.
Unite National Officer, Rob MacGregor, said: ‘We cannot allow a situation to arise where some 25,000 loyal workers in bank branches in high streets and towns across the country are made to pay the price for the banking executives’ recklessness.
‘While this is a decision largely out of both banks’ hands, in divesting these assets, simply securing the best price would be letting down loyal and long-serving staff.
‘Any potential buyers should be assessed on their commitment to job security and protection of terms and conditions, not short-term profit maximisation.
‘The employers, UKFI and the government all have a duty to these long-suffering staff to ensure that opportunistic buyers are not permitted to asset-strip these institutions, leaving thousands of staff facing a bleak future.
‘For Lloyds-owned Cheltenham & Gloucester staff, this is a further blow and a return to massive uncertainty as the on/off decision on their future continues.
‘The government has saved the banks, now it is time to save bank workers.’
As a sop to public anger, both banks have agreed not to pay any cash bonuses to staff earning more than £39,000 for their performance in 2009, while board members will defer all their bonus payments for this year until 2012.
Chancellor Alistair Darling claimed that ‘what we have here is a better deal for the taxpayer’.
He added: ‘It is better in the long run to get private money because at the end of the day, the government does not want to be in the business of running banks.’
But the shake-up hit share prices with the FTSE 100 index falling nearly two per cent.
It was down 94.2 points at 5,010.3. RBS share prices were the worst hit, down 9.2 per cent.
The Lloyds share price rose at first but by midday was down two per cent. The bank said it would raise £21bn, including a £13.5bn rights issue.