'Best result' aim for HBOS plan

The merger proposal has been criticised by some Scottish politicians

The Scottish Government and Lloyds TSB have pledged to work together to ensure the "best result" amid the bank's proposed takeover of HBOS.

The comments came after First Minister Alex Salmond met Lloyds TSB bosses to help ensure Scottish jobs were safeguarded if the move went ahead.

About 17,000 HBOS jobs are based in Scotland. The banking group has its headquarters at the Mound in Edinburgh.

Fears have been raised many jobs could go if the takeover proceeded.

Mr Salmond told Lloyds TSB bosses in London that, if it went ahead, Scotland would be the best place to do business.

Scotland has very substantial cost advantages to do high quality financial sector business Alex Salmond First Minister of Scotland

A joint statement from the Scottish Government and the bank described the meeting as "positive and constructive".

"The Scottish Government represented the interests of its 'shareholders' - the Scottish people - by presenting its case on Scotland's three core strengths: a proven track record in financial services, the quality and talent of workforce, and the competitive advantage of Scottish location," it said.

"Protection of jobs, maintenance of key decision-making functions in Scotland and the emphasis on Scotland's leading position in financial services were all discussed."

The statement added that all those who attended agreed to "continue to work together in an open and productive manner to ensure the best results for all parties".

Earlier, Mr Salmond told BBC Scotland his priority was to protect jobs and decision-making in the financial sector.

"Scotland has very substantial cost advantages to do high quality financial sector business," he said.

'Fait accompli'

The first minister said his preference would be for HBOS to remain independent, but conceded the Holyrood government had to be ready to meet any alternative.

The £12.2bn HBOS takeover has been opposed by some, including SNP backbencher Alex Neil, who said it would cost thousands of Scottish jobs.

Scottish Liberal Democrat leader Tavish Scott accused Mr Salmond of throwing in the towel and accepting the takeover as a fait accompli.

He argued the circumstances under which the merger was agreed had now been fundamentally altered by the bailout plan to recapitalise banks.

Scottish Labour finance spokesman Andy Kerr urged Mr Salmond to scrap plans to replace council tax with local income tax, adding: "CBI Scotland and other business organisations have said local income tax would undermine the chances of attracting corporate headquarters to Scotland."