One of the most significant statements so far in the referendum debate has been from Standard Life. With over 4 million customers across the UK and thousands of employees in Scotland, their intervention matters to all of us.
Standard Life has been headquartered in Scotland for 189 years, so, it is clearly very important when they announce that they are putting in place contingency plans to relocate funds, people and operations to England if we vote for independence with many issues unresolved.
For people like me who want to see the UK continue, it seemed to be a pragmatic statement which recognised the huge uncertainties involved in independence and Standard Life’s obligation to minimise them for their customers, shareholders and employees.
But nationalists saw it rather differently – even amongst themselves. The First Minister claimed the company’s statement supported his position. The Finance Secretary said that it posed lots of questions for the UK rather than the Scottish Government.
To clarify, it is worth looking at what the company actually said in the financial statements it is obliged to produce annually for shareholders. The company’s chief executive, David Nish, posed a whole host of questions about the consequences of any constitutional change.
His five big issues are – the currency an independent Scotland would use; whether agreement and ratification of an independent Scotland’s membership to the European Union would be achieved by the target date; the shape and role of the monetary system; the arrangements for financial regulation and consumer protection; and the approach to individual taxation, especially around savings and pensions as a consequence of any constitutional change.
That’s a chunky list of issues as seen by one of Scotland’s largest companies. You will judge for yourself whose case this challenges most significantly.
But that was not the end of it – the sting in the tail was the statement that “we have started to establish additional registered companies to operate outside Scotland, into which we could transfer parts of our operations if it was necessary to do so.” There, in sober terms, was a clear statement of what is at stake this September.
The financial services sector remains one of the most important industries in Scotland and the rest of the UK. Financial services contributed £8.8 billion to the Scottish economy in 2010. The sector directly employs 85,000 people in Scotland directly. It provides the banking and investment services that individuals, households and businesses rely on every day; insurance for protection when things go wrong; and pensions and long-term savings products to support people as they grow older.
The UK is widely recognised as a global leader in financial services. Scotland’s vibrant financial sector is an important contributor to this strong UK position, and also benefits from its global reputation. We have to protect it.
* Michael Moore was the Liberal Democrat MP for Berwickshire, Roxburgh and Selkirk from 1997-2015 and Secretary of State for Scotland from 2010-2013.
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8 Comments
I had been banging on about the dreaded effect that political fragmentation can have on professional services businesses, so it was nice to see a big company hit this message home. Others warned about parochialism.
Professionals study English and Welsh law and a bit of Scottish too, but it gets to the point where many people won’t bother getting qualified in Scottish law.
As I said, I think independence always has to be on the table, but I just don’t think it is the best thing for Scotland right now. I’m also not an expert on the issues.
“Scotland’s vibrant financial sector is an important contributor to this strong UK position”
Cough. Indeed, Scotland’s vibrant financial sector almost brought the UK economy to its knees. Fred the Shred, Royal Bank of Scotland, Bank of Scotland, Halifax, London Scottish Bank, Dunfermline Building Society ……… there’s a few vibrant Scottish names that made a truly important contribution to the wider UK economy. Some people have short memories.
Didn’t Standard Life threaten to leave Scotland in the run-up to the 1997 Referendum?
In which case, why are they still here?
We dont want Standard Life (in England). I support the Union but I’m getting sick of big companies playing politics. Given how the banks fared in the credit crunch I find it hard to believe that Scottish based financial institutions have a contingency plan for night following day. Scottish politicians should tell companies to back off. People have votes, companies dont, and they shouldn’t be able to own their own politicians via directorships either.
I’ll declare an interest as a small shareholder and bondholder with a modest pension from Standard Life (legacy of a time when I couldn’t join my employer’s scheme.)
What is being quoted is a company keeping its stakeholders informed about how redrawing of national boundaries would affect its future business and dealings with its stakeholders. It has to have those plans and they have to make practical sense. Having the plans is just competent business, not a political action in itself. People like me have to be told, better sooner than later, because Scottish independance would affect the investments and the arrangements for paying UK tax.
IHMO Standard Life cannot be tarred with the same brush as certain other Scottish based companies mentioned above. They were a mutual and defender of mutual status for much longer than many of their competitors, but eventually took the decision that this unduly restricted their access to the money markets. They have, I beleive, companies in Canada, so have experience of working across jurisdictions.
So what they said is evidence of the sort of thing that Scottish independence would bring, and Michael Moore is merely bringing to a wider audience.
Ian Sanderson is quite right. Standard Life are just being prudent and sensible.
We cannot expect them not to plan for all eventualities, that would be careless with the policyholders funds and shareholder entitlements.
Its time the Liberal Democrats put forward true home rule and got behind the SNP in support of YES. The only policy difference between hoe rule and Independence is Foreign Policy and Defence. After Iraq, Westminster should not have those either. Scotland needs its best now. Come on Michael Moore the coalition have dumped you for Mr Mad and Angry but gets quite scared in front of big bad Nicola, MP for Orkney. But we the people of Scotland need you, we have have our George Washington, but we need our Madison. Please come out and support the cause. Today the Lib deems poll 5% in Scotland, unless they support YES they are finished and wee need your talent. Get behind Yes give our country its wings to soar.
Oh and if corporation tax is 3% less in Scotland they will not be going anywhere. Look are Ireland they have VMware EMC Microsoft Apple etc Why 12% Corporation Tax and great deductibles.
Its just Unionist Lies and the Liberal Democrats as the party of home rule should have nothing to do with it.
Let Scotland be free!