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‘HBOS chiefs must be held to account’

Labour peer and former deputy chairman of the Competition Commission Baroness Kingsmill has expressed “extreme concern” over Lloyds TSB’s takeover of HBOS.

Speaking at a fringe meeting at the Labour conference last week, Kingsmill sounded a warning over potential redundancies and said it was crucial that management were held to account over the reasons for HBOS’s demise.

She said HBOS’s business model was very similar to Northern Rock and management should accept responsibility. Kingsmill called for the end of light-touch regulation and said there was an argument for retail banks to be treated like utility companies and have their profits capped.

She said: “I am extremely concerned about the outcome of the Lloyds TSB and HBOS merger.

“I am prepared to be convinced that it was essential but I feel there is a bolt in there that is forgotten, that it was the management that let this happen and I hope there are consequences. The management excesses were just like Northern Rock. The business models of the two were very similar in relat- ion to the mortgage market.”

Kingsmill said she was concerned by the abandonment of competition rules although she accepted the public interest argument.

She said: “I hope there will be safeguards not just for Scottish employees but for all employees.”

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