As I See It: Terry Murden
Ross McEwan, chief executive of Royal Bank of Scotland, has been pontificating on the future of the bank after he departs for a new job in Australia, warning that it would be forced to relocate its head office in the event of Scottish independence. It was enough to prompt at least one shock headline. “Scotland bombshell: RBS to move to London”, boomed the Daily Express. Crikey, get that writer a glass of water.
Before the bank’s staff start panicking and property agents look for new tenants at Gogarburn, it should be pointed out that this is nothing new. RBS’s former chairman Philip Hampton said back in 2014 that breaking up the union would have serious implications for the bank as its balance sheet would be too large for a small independent state to support in the event of another banking meltdown.
However, as McEwan repeated last night, this would not mean relocating the business, only re-registering to England. There would be little impact on operations or employment in Scotland.
Even so, the prospect of losing a Scotland-headquartered business – even a brass plate – is a serious matter. It would determine which government gets the tax receipts and, despite RBS’s recent catastrophic history, would rob Scotland of the prestige of having an internationally-renowned (if no longer globally operational) company among its resident businesses.
That said, we should stop pretending RBS is actually a “Scottish” bank these days. It has been managed from London at least since the financial crash when its long sequence of Scottish CEOs and chairmen was brought to an end. Fox-hunting Stephen Hester, resident in London’s swanky Holland Park, was an occasional visitor to Edinburgh, and while New Zealander McEwan has toured the (diminishing) Scottish branch network and held court a few times in Edinburgh and Glasgow, he too has run the business from its Bishopsgate offices in Spitalfields.
The drift of management focus to London by both RBS and Bank of Scotland (under Lloyds) has been blamed for a decline in work offered to Scotland’s professional services network of lawyers, accountants and other money managers. It is easy to mock the golf course business brotherhood, but when the senior bankers no longer rub shoulders socially with their clients then it weakens the wider business eco-system on which such relationships depend.
Ironically, the SNP’s attempts to build an economy around business titans such as RBS is having the opposite effect as businesses fear that an independent state would merely mean a new raft of regulations and trading agreements, potentially adding to costs of doing business. Therein lies the real and wider warning behind Ross McEwan’s comments.