Fund Your Utopia Without Me.™

12 September 2014

Scotland: Cuba Without The Sunshine

An employee walks inside the Royal Bank of Scotland Group Plc's (RBS) headquarters in Gogarburn, Edinburgh, Scotland, on Tuesday, Feb. 21, 2012. Royal Bank of Scotland Group Plc was sued in New York by Landesbank Baden-Wuerttemberg over $71 million in mortgage-backed securities. Photographer: Mike Wilkinson/Bloomberg

Scots Warned Over Decade of Doubt

One of Britain’s top industrialists gave warning on Thursday that a Scottish Yes vote next week could cast a uncertainty over the UK economy for a decade, as Scotland’s banks led a sustained onslaught against independence. 

Five banks said they would move their headquarters south of the border in the event of a Yes vote, and are lobbying the Treasury to pass new laws to speed up the transfer of their corporate bases to England. 

David Cameron has been urging business leaders to speak out against independence for months. Thursday, in the wake of opinion polls indicating a tight race, finally saw an outpouring of corporate warnings about the implications of a Yes vote in next week’s referendum. 

Sir Mike Rake, chairman of BT Group, deputy chairman of Barclays and president of the CBI employers’ organisation, said independence would destabilise investment in Scotland and the rest of the UK. “The uncertainty will last for easily 10 years,” he told the Financial Times. 

“Inevitably this uncertainty will lead to a slowdown in investment in the UK as a whole as well as Scotland.” 

The onslaught came after two opinion polls indicated that next week’s vote on whether to break up the 307-year-old union was neck-and-neck, although the latest poll on Thursday by YouGov gave a narrow lead to the No campaign at 52 per cent, against 48 per cent in favour of independence. 

Alex Salmond, Scotland’s nationalist first minister, said Mr Cameron was orchestrating a campaign of business “scaremongering”, adding that Scots would ignore the warnings. “Scotland is on the cusp of making history,” he said. “Scotland will vote Yes next Thursday.” 

Royal Bank of Scotland led a host of banks, employing more than 35,000 people in Scotland, warning they would relocate their headquarters south of the border in the event of a Yes vote on September 18. 

But the banks, including Lloyds Banking Group, are worried that the costly and lengthy legal process required to change the domicile of a bank would be further delayed if many institutions rushed to move south at the same time. They have told the Bank of England and the Treasury there would be a case for new legislation. 

The announcements from RBS and Lloyds were swiftly echoed by Clydesdale Bank, TSB Bank and Tesco Bank; government insiders said the move was co-ordinated by the Better Together campaign for a No vote.


Scotland will decide in a referendum to be held on September 18 whether or not to end the 307-year-old union with England

Aegon UK, the subsidiary of the eponymous Dutch insurer, joined its rival Standard Life in saying it would move its registered life company to England if the Scots voted for independence.

The banks believe that they risk being penalised by investors and rating agencies if they keep their domicile in an independent Scotland and lose the support of the Bank of England as their lender of last resort. Inquiries from nervous customers about the consequences of a Yes vote have also increased since the polls narrowed last week.

Mr Salmond said RBS’s contingency plan would not affect jobs or on an independent Scotland’s corporation tax base. “Corporation tax depends not on the registered office but on economic activity,” he said.

Danny Alexander, UK Treasury chief secretary, said: “If all these great institutions locate to England, you would absolutely see a loss of jobs at headquarters, but over time you would see a pulling away in terms of engagement with Scotland.”

Ross McEwan, the RBS chief executive, wrote to his 12,000 staff in Scotland saying they would not be relocated if there was a Yes vote. “This is a technical procedure regarding the location of our registered head office. It is not an intention to move operations or jobs,” he said in the letter.

Mr Salmond, speaking in Edinburgh, said the business campaign was being whipped up by Downing Street, which was “trying to galvanise leading business people to try to say something negative about Scotland”.

He contrasted what he branded scaremongering by the London establishment with what he portrayed as the positive mood among Scots who were “rediscovering self-confidence” and “finding our voice”. 

Related Reading: