Standard Life has confirmed it is drawing up “contingency plans” to pull the majority of its operations out of Scotland if the country votes for independence. It is blaming “material uncertainties about money and regulations” for the post-referendum strategy.
The Edinburgh-based pension provider — which has had its headquarters in Scotland for 189 years — follows the Orion Group in warning that remaining in Scotland may be untenable in the event of a vote for independence. Now, in its annual report, Standard Life says it has already started working on the logistics of moving south.
In today’s report, Standard Life’s chairman Gerry Grimstone says his company’s roots will always be in Scotland, but that “if anything were to threaten this, we will take whatever action we consider necessary — including transferring parts of our operations from Scotland — in order to ensure continuity and to protect the interests of our stakeholders”.
The thinking is underlined by Standard Life’s chief executive, David Nish, who confirmed that his staff have already “started work to establish additional registered companies to operate outside Scotland, into which we could transfer parts of our operations if necessary … this is a precautionary measure to ensure continuity of our businesses’ competitive position and to protect the interests of our stakeholders”.
Nish insisted Standard Life has “a long-standing policy of strict political neutrality and at no time will we advise people on how they should vote”. Its intervention in the debate on Scotland’s future is particularly significant, however, because it is a symbolically important company in Scottish financial history and is regarded as a great success.
For a major pension company which has 90 per cent of its customers outside Scotland, He said his strict duty was to assess the impact of independence on the group’s four million UK customers, its 5,000 Scottish-based employees and its 1.5m shareholders.
“This judgement cannot be made in a definitive way at the moment,” he explained, “because of uncertainties about the currency to be used by an independent Scotland, how interest rates would be set, and how financial companies like Standard Life would be regulated, how savings and pensions would be taxed, and on what timetable Scotland could join the EU”.
Although Standard Life’s location is not vital to Scottish prosperity, the threat of tens of billions of pounds of funds and thousands of highly-skilled jobs flowing across the border are bound to have an electrifying impact on the independence battle.
The recent declaration by Chancellor George Osborne, Labour shadow chancellor Ed Balls and the Liberal Democrat Chief Secretary to the Treasury, Danny Alexander, that they would all oppose formal monetary union with Scotland has forced Standard Life to step out of line and air its fears.
A vote to leave the Union without delegating regulation and monetary policy to London, and the risks, costs and complexities of customers being in a separate country from their money would be just too great, admits Standard Life. It’s certainly not showing any faith in Scottish First Minister Alex Salmond’s declaration that his country would use the pound even without formal monetary union.
In response to Standard Life’s intervention into the independence debate, campaign group Yes Scotland says; “We need to listen carefully to what people are actually saying and that’s very much the case for comments by Standard Life today.
“Standard Life wants to see agreements on currency, regulation and taxation, which is exactly what the Scottish Government has proposed.
“They want a formal currency union and so do the Scottish Government. The only threat to that comes from the refusal of the No campaign and the UK Government to get involved in sensible discussions.”
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