British banks warn they’ll head south if Scotland quits UK

A 'Yes' vote in the referendum will push Clydesdale, Lloyds and RBS to relocate to London, the banks warned.

The leader of Britain's opposition Labour Party, David Miliband, speaks to a gathering of 'No' voters, in Glasgow on September 11, 2014. Scotland will vote on September 18 whether or not to end the 3Show more

EDINBURGH // Three British banks said they would relocate to London if Scotland were to break away from the United Kingdom, a setback for supporters of independence with the vote just a week away.

The announcements by Edinburgh-based Lloyds and Royal Bank of Scotland, both part-owned by the UK government, and by the Australian owners of Clydesdale bank followed a new opinion poll that showed defenders of the centuries-old union were slightly ahead.

A weekend survey had given the “Yes” campaign its first lead this year, prompting the leaders of Britain’s three main political parties to clear their diaries and travel north in a bid to persuade voters that Scotland would gain more autonomy if it rejected independence.

The sudden prospect of a Scottish breakaway so close to the September 18 referendum has prompted a rush to action this week by Britain’s political and business elite: oil firms Shell and BP have also expressed concern.

In another blow to the independence campaign influential newspaper The Scotsman decided to back staying in Britain.

Lloyds bank, which is 25 per cent-owned by the UK 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 the bank’s holding company”.

TSB Banking Group, which is part-owned by Lloyds, said it was likely to relocate some operations to England.

The thought of their departure caused little heartache in some quarters.

“I would rather be poor and standing on my own two feet, making my decisions about my country, than being ripped off by robber barons in Westminster,” said Daniel Hargreaves, from Edinburgh, rushing to work in the city centre - who said he was an RBS customer until two years ago.

John Swinney, finance minister in the nationalist-led Scottish government, said the announcement by the banks was a result of the refusal by Britain’s government to agree to a formal currency union with an independent Scotland.

Bank of England governor Mark Carney has raised questions about currency arrangements in an independent Scotland, saying the country would need stockpiles of sterling if it adopted the pound without an agreement with the rest of the United Kingdom.

That could threaten the spending promises of Scottish National Party leader Alex Salmond, who wants a deal to share the pound and the Bank of England with the rest of the UK.

Britain’s main political parties have ruled that out.

Mr Salmond accused the UK 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.”

There was some relief for unionists when a poll released on Wednesday showed 53 per cent of Scots would vote against a split, against 47 per cent intending to opt for independence.

* Reuters