A week of independence…

A week of independence…

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That was the week that was… For the independence debate

This past week started off with the UK and Scottish cabinets emulating a Mexican stand-off thus, at least in part, avoiding what we Scots term a ‘stooshie’ or in other words ‘uproar, commotion or brawl’.

Both cabinets met but a few miles apart around the grey granite city of Aberdeen as a man of incredible repute, Sir Ian Wood launched his review into the future of the UK oil and gas industry. You can read the full report at www.woodreview.co.uk but his net submission was that the UK could gain some £200 billion MORE in revenue over the next twenty years through a diligent approach to managing those assets.

Cue a partial stooshie – no brawl but plenty of commotion and uproar – as the Prime Minister and First Minister battled it out as to why that oil and gas was best kept in the UK or left to an independent Scotland.

In essence the UK has broad shoulders on the one hand but dragging feet on the other…To see what both had to say you may wish to check out http://www.channel4.com/news/scotland-oil-gas-independence-cameron-salmond-aberdeen

Not content with an ongoing ‘rammy’ big business entered the fray with Standard Life, one of Scotland’s biggest and highly respected businesses, commenting on their future position on independence.

Needless to say both sides – in this continual tug of war – claimed this as a victory for their own positions on independence; well they would wouldn’t they… Here’s what Standard Life actually said;

Gerry Grimstone, Chairman, Standard Life

In September this year, the Scottish people will be voting in a referendum on Scottish independence. Your Company is strictly apolitical and it would be inappropriate for us to give any views on how people should vote. Equally, as one of the largest companies headquartered and based in Scotland, it is appropriate that we have carefully thought through the potential consequences if Scotland were to become an independent nation. We have reviewed all the information that we have available to us at the current time, and we consider that a number of material issues remain uncertain. David Nish covers these issues in section 1.1 of this report.

We have been based in Scotland for 189 years and we are very proud of our heritage. Scotland has been a good place from which to run our business and to compete around the world. We very much hope that this can continue. But 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. We will continue to seek further clarity from politicians on both sides of the debate, so that we can reach an informed view on what constitutional change may mean for our customers, our business and our shareholders.

David Nish, CEO, Standard Life

Constitutional change

As a large company and employer based in Scotland, we have been following the constitutional debate ahead of the independence referendum on 18 September 2014.
We have a long-standing policy of strict political neutrality and at no time will we advise people on how they should vote. However, we have a duty and a responsibility to understand the implications of independence for our four million UK customers, our shareholders, our people and other stakeholders in our business and take whatever action is necessary to protect their interests.
For this reason, we have engaged with key politicians and analysed the relevant papers published by both sides of the independence debate. These include the Scottish Government publication Scotland’s Future (the ‘White Paper’) and the UK Government’s Scotland Analysis series.

At the time of publishing this report (February 2014), we believe a number of material issues remain uncertain. These include:

  • The currency that 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 (currently 24 March 2016)
  • The shape and role of the monetary system
  • The arrangements for financial services regulation and consumer protection in an independent Scotland
  • The approach to individual taxation, especially around savings and pensions, as a consequence of any constitutional change

We will continue to seek clarity on these matters, but uncertainty is likely to remain. In view of this, there are steps we will take based on our analysis of the risks. For example, we have started work 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. This is a precautionary measure to ensure continuity of our businesses’ competitive position and to protect the interests of our stakeholders. As Chief Executive, my commitment is whatever happens, we will continue to serve the needs of our customers and maintain our competitive position.

To read the full Standard Life Annual Report go to http://www.standardlife.com/static/docs/2014/ara.pdf

So as we continue to attempt to slice through the politics and bring you the balanced evidence on independence that was the week that was… As ever we warmly welcome your comments and indeed questions.

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