OUTLOOK: RBS may want to move, but England may not want it
James Moore is the Independent's Associate Business Editor and writes the Outlook City comment column from Tuesday to Friday. He also has a keen interest in disability issues and when not attempting to further injure himself playing wheelchair basketball.
Thursday 06 February 2014
Outlook Business leaders would probably be best off steering clear of the Scottish independence referendum (I'm looking at you, Bob Dudley from BP).
A choice such as that being offered by this plebiscite will be decided primarily by emotion, and negative ones tend to be stirred up when wealthy businessmen start moaning or even threatening. But politicians need to choose their words with care too, particularly in this space.
Which is why Vince Cable's warning that an RBS left "more exposed than Iceland's institutions" would have to quit Edinburgh in favour of (most likely) England in the event of a "yes" vote isn't helpful to those massed behind the "better off together" banner. Even though he raises a valid point.
The rump UK would baulk at a currency union with Scotland without guarantees on spending, debt and the like. Having kept the UK out of the euro, it would be folly to allow a mini version of its crisis to develop were one of the members of a newly created sterling zone to live beyond its means and threaten to bring the house of cards crashing down as a result.
However, were the UK to respond to Scotland walking out by kicking it out of sterling, it does raise a question for the customers of Scotland's big banks (because Lloyds too is headquartered there). Would you want to park your money with an institution based in a country that wouldn't be able to bail out your deposits were it to go wrong (and which would be overseen by a new, untested, regulatory set-up)?
This is less of an issue for Lloyds, which is more or less stable now, but RBS has just warned of losses that could reach £8bn for 2013 thanks to past misdeeds, losses which won't nearly be covered by operating profits. And we're still awaiting a report into the activities of its Global Restructuring Group, commissioned by watchdogs in the wake of accusations of malpractice.
The Business Secretary said, based on this, that it would be "logical" for RBS to move its headquarters out of the country whose name it bears. But given the state that RBS is in, wouldn't it be just as logical for the remainder of the UK to resist any plans to locate the bank south of the border?
- 1 Caitlyn Jenner car crash: Driver who died in collision sued by surviving passengers for $18.5m
- 2 Pictures show young Palestinian girl biting Israeli soldier trying to detain boy during West Bank protests
- 3 Watch the Supermoon live: How to see the brightest Moon of the year tonight
- 4 Blood Moon and Supermoon: September to bring brightest – and dimmest – full Moon of the year on same night
- 5 The 20 toughest job interview questions in the world
Caitlyn Jenner car crash: Driver who died in collision sued by surviving passengers for $18.5m
Pictures show young Palestinian girl biting Israeli soldier trying to detain boy during West Bank protests
Celebrity Big Brother 2015: Tila Tequila kicked off show after 'describing Hitler as a good man'
Watch the Supermoon live: How to see the brightest Moon of the year tonight
Hulk Hogan wants to be Donald Trump's running mate in the US Presidential election
Climate change: 2015 will be the hottest year on record 'by a mile', experts say
'Women only' train carriages: Jeremy Corbyn unveils radical move to tackle public harassment
Black holes are a passage to another universe, says Stephen Hawking
Iain Duncan Smith 'should resign over disability benefit death figures', says Jeremy Corbyn
Stock up on canned food for stock market crash, warns former Gordon Brown adviser
Labour leadership: Jeremy Corbyn voters most likely to believe 'world is controlled by a secretive elite'
iJobs Money & Business
£25000 - £30000 per annum: Recruitment Genius: From modest beginnings the comp...
£35000 - £40000 per annum: Recruitment Genius: From modest beginnings the comp...
£15000 - £65000 per annum: Recruitment Genius: This is an exciting opportunity...
£18000 - £20000 per annum: Recruitment Genius: This is a fantastic opportunity...