Cable sees VAT hurdle should Scots go it alone

AN INDEPENDENT Scotland would be forced to impose VAT on food and would see major financial institutions such as the Royal Bank of Scotland relocate their headquarters to London, Liberal Democrat Business Secretary Vince Cable has warned.

Mr Cable warned that Scotland’s reapplication to be a European Union member would be more complicated than nationalists suggested and indicated it would take longer than the 18 months envisaged in the Scottish Government’s white paper.

Mr Cable said that the UK is one of the few countries allowed zero per cent VAT on certain goods including food and children’s clothes.

He added that new applicants had to accept the EU minimum of 5 per cent and warned there would be “different VAT rating on areas of household budgets” either side of the Border.

Mr Cable said RBS may choose to move its HQ to London to be in the same country as the lender of last resort – the Bank of England.

However, an SNP spokesman said the VAT question would not be an issue as Scotland “would not be rejoining the EU but renegotiating its terms of membership”.

on RBS the spokesman said: “Vince Cable’s ridiculous comments are at odds with the common sense remarks from RBS’s chief executive, who last week said that if they had to operate in 39 countries around the world rather than 38, that is exactly what they would do.”