RBS, 4 Other Banks Warn of Relocation to England if Scots Vote Yes; Catalans Stage Mass Protest for Independence

Tale of Two Countries

Fearmongering in Scotland hits fever pitch as RBS and four other banks threaten to leave the country if Scotland votes "Yes" for independence.

In Spain, Catalans staged a huge protest in favor of independence. The Spanish government hopes Scotland will vote "No" even though it seeks to halt a Catalan vote altogether.

Let's take a close look at these stories starting with Scotland.

RBS, 4 Other Banks Warn of Relocation to England if Scots Vote Yes

On the fearmongering front, RBS warns it would relocate to England if Scots vote Yes.

Royal Bank of Scotland led a host of banks employing more than 35,000 people in Scotland who warned that they would relocate their headquarters south of the border in the event of a Yes vote in the Scottish independence referendum next week.

“RBS believes that it would be necessary to re-domicile the bank’s holding company and its primary rated operating entity (The Royal Bank of Scotland plc) to England,” it said in a statement on Thursday.

The move, which followed a similar announcement from Lloyds Banking Group on Wednesday, was swiftly echoed by Clydesdale Bank, TSB Bank and Tesco Bank, which all individually confirmed they would set up London-based entities if Scotland voted to leave the UK.

The recently floated TSB Bank, which has more than a quarter of its loans north of the border, said it planned to move its main high street banking subsidiary’s domicile from Edinburgh to London. TSB’s parent company and head office are already all in London, but it has more than 2,000 staff in Scotland, out of a total of 8,000.

“Although the implications of Scottish Independence remain unclear, it is likely that in the event of a Yes vote, TSB will establish additional legal entities in England,” it said, adding that it expected there to be enough time between a Yes vote and the start of independence to implement any changes.

With some polls showing the two sides neck-and-neck a week before the vote, business leaders have become more outspoken about the impact of a Yes vote. Retailer Next said on Thursday it feared that independence would push up prices in its stores north of the border.

Sir Charlie Mayfield, chairman of John Lewis, said independence could force the retailer to adopt a different pricing regime in Scotland due to potential currency and tax changes.

The announcements came after a co-ordinated effort by the Better Together campaign, the Treasury and Number 10 to persuade businesses to speak up in favour of the union. On Thursday morning, more than 100 Scottish business leaders jointly signed a letter organised by Better Together urging Scots to vote No, arguing that the economic risks of separation were not worth taking.

Standard Life, the FTSE 100 insurer that is one of the largest employers north of the border, said on Wednesday that it was planning to shift large parts of its business out of the country if Scotland voted for independence. “This transfer of our business could potentially include pensions, investments and other long-term savings,” it said.

20 Point "No" Lead Vanished

This one is close. Hopefully Scotland does the right thing and votes for independence. In the wake of a fever-pitch fearmongering effort by Cameron, banks, and others, it's hard to say.

The only reason Cameron allowed this vote in the first place is because he thought it was a guaranteed proposition. The "No" voters once had a 20-point lead in the polls.

Mass Protest in Barcelona

Meanwhile, in Spain, Catalans stage mass protest in Barcelona to back referendum

The Catalan independence movement held a mass rally in Barcelona on Thursday as part of an intensifying campaign in support of a planned November referendum on the region’s future political status.

Dressed in red and yellow, the colours of the Catalan flag, hundreds of thousands of protesters assembled on Gran Via and Avenida Diagonal, two of the city’s main arteries. Seen from the air, the rally formed the shape of a giant V, described by organisers as a symbol of Catalonia’s desire to vote.

The Catalan demonstration was staged a week before Scotland’s independence referendum, and less than two months before the planned plebiscite in the Spanish region. The Spanish government has said repeatedly that it will not allow the Catalan vote to go ahead, arguing that the country’s constitution allows no space for regional self-determination.

The constitutional court is set to rule on the issue in the weeks ahead, and is widely expected to side with Madrid. Catalan leaders will then have to decide whether to press ahead with their ballot or comply with the court ruling and develop an alternative strategy.

Speaking hours before the demonstration, Artur Mas, the Catalan president, renewed his calls on Madrid not to stand in the way of the November vote. “The message [today] is, ‘We want to vote. We are a nation. We want to decide our own political future.’”

Let the Voters Decide

Why shouldn't the Catalan voters, like Scottish voters, get to decide their own fate?

The only apparent answer is Spain knows full well they would vote for independence. Had Cameron realized the vote in the UK would have been this close, I rather doubt he would have allowed it.

Yet, as I have stated before, it's far better to settle such issues by vote than by civil war.

For further discussion, please see Will Tears and Promises Save the Day for the "No" Vote for Scotland? Lesson for Ukraine: Voting is Better than Civil War.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com