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Lloyds Banking Group has confirmed it will relocate from Edinburgh to London if the Yes camp wins next week’s independence referendum, with Royal Bank of Scotland poised to follow suit.
Lloyds confirmed on Wednesday night it had contingency plans in place to move its registered office from Edinburgh with RBS expected to reveal its relocation plans in a statement on Thursday morning.
The potential impact on Scotland’s financial industry of a Yes vote has become a central issue in the independence debate. Until now, Lloyds and RBS have tried to avoid saying much about their contingency plans for Scottish independence.
The two banks are Scotland’s biggest companies by assets and both have the UK government as their biggest shareholder. Their plans to relocate south of the border if the Yes vote wins are likely to be an important factor in the final days of debate.
Lloyds said on Wednesday it had “seen an increased level of enquiries from our customers, colleagues and other stakeholders about our plans post the Scottish referendum”.
It added: “While the scale of potential change is currently unclear, we have contingency plans in place which include the establishment of new legal entities in England. This is a legal procedure and there would be no immediate changes or issues which could affect our business or our customers.”
The announcement was welcomed by the UK government, which owns 25 per cent of Lloyds and 81 per cent of RBS – a legacy of the taxpayer bailouts of the two banks during the financial crisis.
A Treasury spokesman said: “Lloyds’ contingency plan to relocate to London in the event of a Yes vote is understandable. As a general matter, the government believes any company should be free to choose where to locate its base, in the light of what best suits the stability and competitiveness of its business.”
In addition, a Treasury insider said: “As you would expect, RBS have also been in touch with us and have similar plans to base themselves in London.”
Since opinion polls showed in the past week that the Yes camp had closed the gap with the No camp, people have been moving bank deposits, pensions and savings south of the border.
If Scotland leaves the UK, money deposited in Scottish bank accounts will no longer be guaranteed by the financial services compensation scheme or have the Bank of England as the lender of last resort.
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,” the insurer said.
RBS employs more than 12,000 people in Scotland. Lloyds, which employs about 16,000 people north of the border, is also considering relocating its Bank of Scotland, Halifax and Scottish Widows divisions to London.
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