Two banks have said they would move their head offices to London if Scotland votes to break away from the United Kingdom next week while retailers have warned a Yes vote could lead to higher prices.
The warning from Edinburgh-based Lloyds and RBS was another hit against the independence campaign after the latest poll showed a slender lead for those wishing to keep the 307-year long union with England.
The latest developments heightened the drama and the passions surrounding the historic referendum. The Scotsman newspaper, in a front-page editorial today, announced its verdict of the choice: "We are better together."
In the past week, polls had shown a surge in support for the independence campaign led by Alex Salmond’s Scottish National Party, and it appeared they were on a march to victory in next Thursday’s vote.
That prompted Conservative Prime Minister David Cameron and David Miliband of the opposition Labour Party to head to Scotland yesterday to make emotional appeals for Scots to stay within “Britain’s family of nations”.
The pro-independence camp says it is time for Scots to rule their own country and build a fairer society without being told what to do by a political elite in London. The campaign for staying together says Scotland is more prosperous and secure within the United Kingdom, and says an independent nation would struggle to be economically viable.
The unanswered questions of what currency Scotland would use and what central bank it would have led to alarm in the corporate world as well as weighing on voters’ minds.
The announcements by Edinburgh-based Lloyds and Royal Bank of Scotland - both part-owned by the British government - was greeted by the “No” campaign as bolstering their position.
Lloyds bank, which is 25 percent-owned by the British government and controls Bank of Scotland, said its contingency plans included setting up “legal entities in England”, a move that would not affect its business.
RBS said it would be necessary to re-domicile its holding company. TSB Banking Group, which is part-owned by Lloyds, said it was likely to relocate some operations to England.
Lloyds’ headquarters are in London but its registered office is in Edinburgh. RBS senior management is based in London but its registered offices are in Edinburgh. The location of a company’s registered office, its legal home, is what dictates its regulatory and tax regime.
RBS Chief Executive Ross McEwan told staff that moving the registered offices did not mean it would cut jobs in Scotland or move operations away, and it would not affect its day-to-day services.
Mr Salmond seized on Mr McEwan’s comments to dismiss the significance of the moves. He accused the British government of orchestrating a campaign among corporate leaders to talk negatively about independence.
“I think the people of Scotland have moved beyond these warnings and these scaremongerings,” he told a news conference.
Mr Salmond also repeated his stance that, despite what political leaders in London are now saying, rump United Kingdom would agree to a currency union in the event of a “Yes” victory as it was common sense and would be in their mutual interest.
His confidence does not extend to financial markets, with the pound taking a hit as the possibility of a “Yes” victory strengthened. Investors also fear the effect on Britain of Scotland claiming much of the North Sea oil and gas reserves.
Mr Salmond also said he was sure the European Union would welcome independent Scotland as a member, pointing to the substantial proportion of EU fishing and energy resources that lie in Scottsh waters.
A poll released last night showed 53 percent of Scots would vote against a split, against 47 percent intending to opt for independence. The figures from the poll, carried out by Survation for the Daily Record newspaper, excluded 10 percent of voters who said they were still undecided.
Meanwhile, retailers Asda, John Lewis and Next said Scottish consumers face higher prices if the country quits the UK.
“If we were no longer to operate in one state with one market and – broadly – one set of rules, our business model would inevitably become more complex,” said Asda chief executive Andy Clarke.
Clothing retailer Next said it would continue to trade in Scotland whatever the outcome of the vote. “If they get a new currency and that devalues, that pushes up the prices of imported goods,” said chief executive Simon Wolfson, a member of the Conservative party, which opposes a split.
Asda’s and Next’s comments echo those of John Lewis chairman Charlie Mayfield, who told the BBC today that “it does cost more money to trade in parts of Scotland, and therefore those higher costs in the event of a Yes vote are more likely to be passed on.”
Reuters
