Standard Life should seek answers from Westminster

Friday, 07 March 2014 06:59

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By James Scott

There is a hauntingly familiar ring to the No campaign’s attempts to recruit business leaders to forecast woe and destruction after a Yes vote for Scottish independence.

I, for one, have been through it all before.

As Executive Director of Scottish Financial Enterprise in the run up to the devolution referendum, I was required to warn of the hazards of so radical a move. I see that the current incumbent of the post is similarly constrained.

In the event, of course, the Scottish financial sector flourished post-devolution and under successive Scottish governments, at least until the point where the failure of London regulation and financial policies resulted in lasting damage to our banks.

We are now faced with a specific statement by an important and respected Scottish firm that uncertainty over currency, regulation, taxation and membership of the European Union have caused it, as a purely precautionary measure, to undertake contingency planning to set up additional registered companies. No mention that I have found of moving headquarters, incidentally, despite some of the headlines.

This is being held against the Yes campaign, despite the fact that the Scottish Government’s proposals for a currency union and for uniform regulation across Britain after independence, and the SNP’s approach to company and personal taxation, provide the complete answer to Standard Life’s concerns. The concerns would be better directed at the Westminster parties which claim to stand in the way of such sensible outcomes, at least for now.

While they are at it, Standard Life might also consider where the greatest uncertainty of relations with the European Union lies: in Scotland’s desire to continue as a member, or Westminster’s looming referendum on membership to follow hard on the independence referendum?

I noted German Chancellor Angela Merkel’s remarks in London last week, none of which offered the kind of support Prime Minister David Cameron was looking for as he seeks a deal on Europe to take to the British people.

The impression has been left that to set up additional registered companies is a novelty for a company such as Standard Life. It already has several such companies here and overseas of which perhaps the most significant, from the point of view of the present discussion, is Standard Life International Ltd. in Ireland offering investment products to UK residents. UK taxation, of the company and those who buy its products, will have played a part in the choice of an Irish location.

No one can take issue with Standard Life’s decision to undertake contingency planning, but in expressing its concerns, the Company should target the UK Government. For the reassurances it needs, it would do well to put pressure on Westminster to set aside the dog-in-the-manger attitude adopted towards the sharing of Sterling and consider also what planning it needs to undertake against Westminster’s relations with the European Union breaking down entirely.

James Scott is formerly Head of the Scottish Industry Department, Chief Executive of the Scottish Development Agency and Executive Director of Scottish Financial Enterprise.

This article was originally published in the Herald newspaper.