Lloyds TSB has put aside £35 a head for their employees

The decision by Lloyds TSB, which accepted a £5.5billion handout just a few weeks ago, has sparked outrage. The bank is refusing to scale down its festive celebrations even though it was one of the beneficiaries of Gordon Brown’s £37billion rescue package designed to save the British banking system from collapse. Lloyds TSB defended its decision by claiming its 67,000 staff deserved a festive reward after working hard through the year, and it described the outlay as “modest”. It also emerged that Royal Bank of Scotland is to spend £1million on Christmas parties for its staff, despite receiving a £20billion bailout. The Edinburgh-based bank has allocated £10 of taxpayers’ money to every one of its 100,000 UK employees for this year’s celebrations.

We are very proud of our staff who work extremely hard and we want to reward them. Lloyds TSB spokeswoman

Liberal Democrat spokesman Vince Cable said: “The banks simply don’t get it. Large numbers of people in the financial sector are now losing their jobs. “The banks are dependent on taxpayers’ money but they appear to want to continue to live the lifestyle of the glory days when any sense of financial responsibility was disregarded.” Mark Wallace, campaign director for the TaxPayers’ Alliance, said: “We wouldn’t want to eliminate Christmas but for an awful lot of taxpayers who have bailed out the banks this Christmas is going to be a very difficult time indeed.

"I think some restraint is in order and they shouldn’t behave as they did before they took the money. The banks have got to remember that part of their money has come from taxpayers and not from profits earned by their abilities.” A spokeswoman for Lloyds TSB said the bank had decided to fully fund staff parties up to a limit of £35 a head. All 67,000 staff would be entitled to take part, adding up to a total of £2,345,000. Departmental heads would have the responsibility of organising events for branches across the country. She said: “We are very proud of our staff who work extremely hard and we want to reward them. We have agreed on a modest budget of £35 a head which will apply across the board whatever position staff hold in the bank.

“Accepting the Government offer does not reflect on our performance or mean that the bank is necessarily in bad shape.” When the Prime Minister made the decision to invest billions of taxpayers’ money to prop up some of Britain’s major banks, he promised to end the culture of “rewards for failure”. He also pledged that directors at the banks taking part in the bailout would not receive cash bonuses this year. More than three-quarters of private sector companies will fund a staff Christmas party this year, according to the Chartered Institute of Personnel and Development. The figure is just seven per cent down on last year, des­pite the impact of the credit crunch.

Charles Cotton, CIPD’s expert on staff rewards, said: “As ever, employers need to think about why they are providing a Christmas party in the first place. If it is to recognise the collective contribution of their employees then what are the alternatives and are they more effective? “If holding a Christmas party is the most effective way of achieving this then employers should be wary about scrapping them in response to the ­economic downturn because the long-term impact could be damaging on employee engagement and organisational performance. “The Christmas party is one way of reminding staff that they are part of a common endeavour.”