UK government ‘encourages’ business contacts to speak out against Scottish self-government during election campaign

Scottish Bank Headquarters, past, present and future:  a potted history of 21st century banking in Scotland.      

By A Retired Bank Manager

While Nicola Sturgeon suspended work on the economics of independence in March last year to concentrate on tackling the Covid pandemic, this hasn’t stopped the UK government encouraging its friendly think tanks and business contacts to speak out against Scottish self-government during the Holyrood election campaign.

The latest to do so is the chief executive of the UK state owned NatWest Group, Alison Rose, who threatened to remove a token brass plate from Gogarburn in Edinburgh to London.

Senior SNP figures have accepted that, when Scotland becomes independent, banks would have to set up separate companies to operate in Scotland and England. This was always the case following Basel 3, the global, voluntary regulatory framework on bank capital adequacy, stress testing, and market liquidity risk, developed in response to the deficiencies in financial regulation, not least in London, revealed by the financial crisis of 2007-08.

In reality, the effective RBS HQ, moved to London some years ago and on 14 February 2020, it was announced that RBS Group was to be renamed NatWest Group. 

1. When Scottish Banks were the best in Britain

2. Gordon Brown and Alistair Darling’s part in the 2008 Banking crash

3. Brexit Banking exodus from London

4. Banking in an independent Scotland

1   When Scottish Banks were the best in Britain

In the mid-1990s the Bank of Scotland, the only commercial institution created by the Parliament of Scotland to remain in existence, and Royal Bank of Scotland, both run from Edinburgh by Scottish qualified bankers, were the best performing and most modern banks in the UK.   Business boomed and the share price soared but this success attracted hostile takeover threats.  Both competed to take over the slumbering giant that was Nat West. The Royal Bank won and found assets that exceeded their expectations.  Fuelled by this success, Fred Goodwin strived for global expansion which is well documented in Ian Fraser’s excellent “Shredded” – Inside RBS, the Bank That Broke Britain.

The Bank of Scotland, which was the first bank in the UK to install a central computer system and developed the first online banking system in the UK, was left trying to grow through a merger.

This was achieved by linking up with Halifax Building Society which had only been a Bank for four years and the joint operation was run by Andy Hornby who joined Halifax from ASDA. This changed the Bank’s culture completely and led to the outsourcing of many of the Bank’s functions.  The Bank’s prudent lending policies were abandoned in the pursuit of growth at all costs which led to its collapse in in 2008.  As Iain MacWhirter wrote at the time, “Scottish Labourites at their conference in Manchester in September 2008 were practically punching the air at the collapse of HBOS”.

Prime Minister Gordon Brown personally brokered the deal with Lloyds TSB but failed to make an Edinburgh Headquarters a condition of the deal.  One of the requirements of the new Lloyds Bank management was to insist on flying the Union Flag on top of The Mound and imposed the Lloyds computer system, which was light years behind the Bank of Scotland’s, much to chagrin of staff and customers alike.

In 2015, an investigation by the Prudential Regulation Authority and the Financial Conduct Authority blamed the HBOS failure requiring the bailout on the bank’s executives, as well as being critical of the UK Financial Services Authority (FSA), the then-regulator.

2. Gordon Brown and Alistair Darling’s part in the Banking Crash

In the 1980s the Tories encouraged Building Societies to demutualise and eventually turning them into banks led to ruin as they didn’t have expertise to compete with established banks.,banks%20if%20their%20members%20agreed.

Among those was Newcastle based Northern Rock which was the first UK bank to fail in 150 years and the Labour government ploughed tens of billions into rescuing it.

Gordon Brown as Labour Chancellor of the Exchequer, the man responsible for Bank regulation was in favour of little or no supervision of reckless lending. Consider his Mansion House speech to Bankers on 20th June 2007, less than three months before the Northern Rock failed.

“Over the ten years that I have had the privilege of addressing you as Chancellor, I have been able year by year to record how the City of London has risen by your efforts, ingenuity and creativity to become a new world leader.

I congratulate you Lord Mayor and the City of London on these remarkable achievements, an era that history will record as the beginning of a new golden age for the City of London.

And I believe the lesson we learn from the success of the City has ramifications far beyond the City itself – that we are leading because we are first in putting to work exactly that set of qualities that is needed for global success:

And I believe it will be said of this age, the first decades of the 21st century, that out of the greatest restructuring of the global economy, perhaps even greater than the industrial revolution, a new world order was created.”

Alistair Darling learnt no lessons from the collapse of Northern Rock in September 2007, and his March 2008 Budget speech just six months after the first UK bank collapse makes embarrassing reading today: “…we have maintained confidence and stability in the banking system … We have turned welfare into work and borrowing into wealth creation.”  As Chancellor, Alistair Darling failed to tighten banking regulations.

It was the UK regulatory authorities headed by Chancellor of Exchequer Alistair Darling that had the powers to investigate the RBS / AMRO take over but ignored fact that no proper due diligence was done by RBS on a deal worth £49 billion before they gave its approval for the world’s biggest bank take over deal that brought about the collapse of the Royal Bank of Scotland.

Incredibly, the Financial Services Authority overlooked the rules on capital by allowing Fred Goodwin’s RBS to dip below 4%, below the minimum regulatory requirement on capital, to do the ABN Amro deal.

 At the time Fred Goodwin was an adviser to Alistair Darling as Chancellor, and was still a member of a key Treasury body advising Labour months after the banking crisis and quitting RBS.

Read more on the banking bail out at

3. Brexit Banking Exodus from London

The Ulster Bank, also owned by NatWest, was subdivided into two separate legal entities, Ulster Bank Limited (UBL – registered in Northern Ireland Headquartered in Belfast and Ulster Bank Ireland DAC (UBIDAC – registered in the Republic of Ireland and Headquartered in Dublin in order to trade in each country.

Bizarrely, In February 2021, following extensive review, the NatWest Group announced plans to withdraw Ulster Bank from the Republic of Ireland with a “phased withdrawal” over the “coming years”.

Bizarrely, as an updated report from think tank New Financial suggests 440 financial services firms have moved some or all of their jobs out of London because of Brexit, along with around £900bn in bank assets (roughly 10% of the entire UK banking system).

Dublin is the winner with 135 firms have chosen the Irish capital as their post-divorce location, including Barclays Bank and Bank of America, followed by Paris with 102 firms, Luxembourg with 93, Frankfurt on 62, and Amsterdam on 48.  This represent thousands of highly paid financial sector jobs many of which could have come to Scotland if we were independent in the EU.

4. Banking in an Independent Scotland

An independent Scotland will need a Central Bank and, contrary to Unionist claims, Scotland would be entitled to an equitable share of the Bank of England’s gold and currency reserves totalling $212 billion.

When Scotland becomes independent, all banks and other financial sector activities will require to establish headquarters here in order to trade which will create new jobs and accelerate the use of local legal and accountancy expertise which both HBOS and Royal Bank have increasingly centred in London. 

As Michelle Thomson wrote in 2020,    

“There have been no significant debates in the Scottish Parliament about our financial systems – such as regulation, banking issues, quantitative easing and in particular the attitude of banks to small business. There are no Cross-Party Parliamentary Groups about banking and finance. Many of Scotland’s small businesses have been ruined or damaged by the actions of banks, perhaps the most notorious being the (UK State owned) RBS and its rapacious Global Restructuring Group.”

The financial, legal and accountancy sectors have lots to gain, from an independent Scotland adopting its traditional reputation for sound banking practices and putting the customer first.

4 thoughts on “UK government ‘encourages’ business contacts to speak out against Scottish self-government during election campaign

  1. We all know that the RBS statement in 2014 that it would move it’s HQ was an important factor in the NO decision so it’s important that the facts set out by John are widely circulated to counter the argument. Perhaps with the name change to NatWest Group, and with their past duplicitous record, Scots will be more skeptical.

    Liked by 3 people

  2. The banks were totally corrupt. Fred Goodwin was a crook. It was the Westminster Gov that was supposed to govern banking. A total failure. Thatcher sold off the building societies owned by the members. Mutual. So the banks could take them over. Thatcher deregulated banks worldwide. Along with Reagan. UK/US world bankers. Leverage was reduced worldwide from 25% collateral to 13%. That led to the banking crash. Clinton and Brown carried the Ponzi scheme on. False fake accounting.

    The bankers fund the Tory Party. The 80’s ‘loads of money bankers’. Giving out loans without collateral. That people could not pay back. A Ponzi scheme. Interest rates at 17%. Lots of people lost their houses. High unemployment. They had to get rid of Thatcher for closer ties with the EU. To aid the economy.

    Goodwin took out the Middle management the experience personnel. The culture of sell, sell, sell. Unregulated products people did not need. Fraudulently. The bank personnel had come through the ranks with exams and expertise. Now graduates were given minimal training to manipulate customers and rip them off. The computer says No. Brown in total ignorance took is a tripartite system of governance. The Ponzi inflated value lending. Illegally over valued commercial property and flats. That led to the banking crash.

    Any banking down in Scotland could be regulated by the Scottish Gov. Scotland is the home to many £Billion Funds. Scotland had a worldwide reputation for banking fund management before Westminster ruined it. The Aberdeen Standard has just changed it’s name to Abrdub (Abrdn) or something stupid. Change it back for goodness sake.

    If Scotland was Independent it could gain so much more £Billions. Even than banking, especially in the EU. London the global centre for tax evasion has just lost £Trn of Banking business because of Brexit. They claim Scotland would lose business because of Independence. Scotland would gain £Billions not being subject to Westminster poor, bad governance. Scotland has to pay so much it dies not need. It does not have the funds for what it needs because of Westminster corrupt governance.

    Illegal wars, tax evasion, financial fraud. Hinkley Point, HS2, bureaucracy and jobs on the Mall, London HQ. Trident, the Military not based in Scotland. Repayment on loans not borrowed or spent in Scotland. Scotland cannot borrow to invest in the economy. Scotland raises £66Billion+ in revenues. More pro rata than the rest of the UK. UK raises £630Billion+.

    London is the tax evasion capital of the world. Banking corruption. Banks have been fined many times for aiding corruption and money laundering. The banking system has lost £Trns because of Brexit. Another fable about moving banking HQs
    does not register. Banks are moving HQs to the EU. Brussels and Hamburg etc.

    Scotland would have a central bank with funds remaining in Scotland. Scotland could sell bonds for funding. That is what the UK Treasury do. Quantative easing lowering the standard of living. Making people poorer with less disposable income. Tax rebates for the wealthy. Cuts to universal credit. The UK the most unequal place in the world. Westminster starving and killing people. Life expectancy in the south going down.

    The Greensill scandal reported to cost the taxpayers £5Billion. Cameron and the associates ripping off the public purse. The pandemic scandals £34Billion. The two jobs civil service. Even more corruption. The increase in the military spending £Billions. Essential services cuts. The Brexit £Billions of loses.

    Liked by 1 person

    1. Gordon wrote: “Quantative (sic) easing lowering the standard of living. Making people poorer with less disposable income”
      How does Quantitative Easing (QE) reduce the standard of living or make people poorer with less disposable income? The recent QE by the UK Gov was to finance the Gov’s Furlough Scheme. That money was released to employers to provide liquidity to employees. It therefore passed from the Public Sector (i.e. Government sector) into the Private Sector and fed families and kept them in their homes. The same powers would be available to an independent Scotland, but only if it has its own sovereign fiat currency.
      On another topic, RBS intends to move its HQ out of Scotland if we go independent on the grounds that “it (RBS) is too big for the Scottish economy”. By this they really mean that Scotland couldn’t afford to bail it out if there were another Great Financial Crash like 2007-8. In other words, they expect to be rescued when their own recklessness causes their business to fail – privatise the profits, but socialise the losses.


  3. Independence will present golden opportunities to completely reset the Banking regulations and set up well away from what they currently are I.E.completely a risk averse system debt fueling property
    And asset purchases depriving vital sectors of much needed capitol in order
    To develop a sustainable fair and equitable society
    Tis us who can set the rules NOT greedy
    Quick buck bail us out when we blow it
    I give you a saying I imparted to a Snr.director of RBS 8 days before their collaspe
    “More often than not when a greedy pig has its snout in the trough of plenty
    Everyone forgets that only one helluva mess can come out the other end ”
    He did not quite appreciate it,but we met 1 month later where upon he shook my hand stating
    ” wise words that i shall never forget and I assure you that I have imparted your wise words to my fellow Directors and High Office of Government “


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