Economics of Independence

Standard Life deserve common sense discussions

14505_755160271161552_534495915_nI worked for Standard Life over 16 years between 1991 and 2006 in a variety of senior roles. During my time at the company I worked on a series of projects including the demutualisation project, which readied the group for flotation. It came as a surprise to me to hear claims that the company had made negative statements regarding independence.

These reports contradict what I have been told by senior contacts at Standard Life. They stress that the company – which operates in 14 countries across the world –  is neutral in the independence debate. From selective quoting of the Standard Life report today you would assume otherwise.

Beyond the headlines

It’s important to look beyond the headline and consider the detail of statements that are made.

Today Standard Life has called for agreements on currency, regulation and taxation. This is exactly what the Yes Campaign and the Scottish Government have been calling for over the past few months. In response, George Osborne appeared in Scotland and rejected the possibility of in-depth talks. This is despite the fact that the UK Treasury has already guaranteed the security of all UK debt in the event of independence.

To settle the concerns of Standard Life, Westminster needs to ‘set aside its differences and get around the negotiating table’ on issues such as currency and the EU. There is no use in Westminster complaining about ‘uncertainty’ when leading politicians replace mature discussions with posturing.

In fact Business for Scotland predicted just two weeks ago following Osborne’s speech that companies would call for certainty on the currency union:

“It seems highly likely that the Westminster establishment’s tactic will backfire and cause considerable consternation among businesses.”

The actual statement from Standard Life, concerning where to base operations, was the following:

This is a purely precautionary measure, and customers do not need to take any action. We are simply putting in place a mechanism which, in the event of constitutional change, allows us to provide continuity to customers and to continue serving them, wherever they live in the UK. ” 

This is known as contingency planning – nothing more, nothing less. Companies do it all the time as a sensible measure to lower risks. Whether Standard Life, with 5,000 employees in Scotland and a 189 year history of having its headquarters here, with the possibility of gaining business from the investment of an independent Scotland’s oil fund, and of other lucrative opportunities, will actually move its headquarters elsewhere is a decision for the future.  What Standard Life and other businesses deserve is for the UK Government to engage in common sense discussions on currency, regulation and taxation in the event of independence.

There are precedents on this and negative reporting.

Previous fears were unfounded

Concerns about constitutional change are nothing new in Scotland.

Standard Life were reported as raising the possibility of moving its operations prior to the referendum on devolution. It didn’t come to pass. William Hague warned of a “high-tax ghetto”. It didn’t come to pass.

I remember how colleagues at Standard Life were disappointed with the negative stories concerning the company.

Now, as we approach another referendum, the same stories are appearing all over again – despite the fact that the rumoured exodus of big business after the birth of the Scottish parliament never took place.


Tony Banks speech to businesspeople in Aberdeen

Change with influence or change without influence

The reality is, as Tony Banks recently set out in a speech to Business for Scotland Aberdeen, that Scotland exists in a rapidly changing world. Scotland can either have the fiscal powers to set its own economic priorities and develop its strengths or those decisions can be taken elsewhere. Business is a constant process of change and the balancing of opportunity and risk. Independence is the process by which business in Scotland will have a greater influence over its own interests within the global market.

Only yesterday business figures at the Scottish Parliament called for the No Campaign to set out its plans for what happens to Scotland if people vote for no change. So far there has been no detail. Business figures also set out the opportunities of independence, for which there is growing evidence.


From discussion with former colleagues at the firm, it’s clear that the media is not representing this balance accurately or Standard Life’s insistence on its neutrality. Yet that is what matters most for Scotland’s post-independence economy.

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About the author

Gordon MacIntyre-Kemp

Gordon MacIntyre-Kemp is the Founder and Chief Executive of Business for Scotland. Before becoming CEO of Business for Scotland he ran a small social media and sales & marketing consultancy.

With a degree in business, marketing and economics, Gordon has worked as an economic development planning professional, and in marketing roles specialising in pricing modelling and promotional evaluation for global companies (including P&G).

Gordon benefits (not suffers) from dyslexia, and is a proponent of the emerging New Economics School. Gordon contributes articles to Business for Scotland, The National and The Huffington Post.


  • I think Standard Life need to set up an English Company to receive English tax credits for their English Pension policyholders.

  • do you think that the majority of company formation activity is for current-UK regulated participation fund products that require a legal entity?

    i.e. it would be a royal pain in the backside to change the terms of a product to meet an entire new regulatory framework.

  • Enjoyed reading a more accurate report about the Standard Life’s more accurate statements and intentions

  • Seems to me that Standard Life might work harder to put this story into perspective if a competitor – say Scottish Widows -indicated their intention to take a more positive line with regard to the potential business opportunities which independence will bring.

  • Despite the assurances of neutrality, I find it surprising that Standard Life management have chosen to make a statement of their “contingency” plans at this particular time, surely knowing full well how the information would be spun by anti-independence commentators. Claims of special access from BBC’s Robert Peston to be given the statement do nothing to dispel that notion. If the reaction from the media was wrong, you would imagine that Standard Life would be anxious to correct the impression. So far, they seem quite happy to leave things as they are.

    I also can’t imagine that they are disappointed that such a statement takes a lot of the heat away from what was a pretty poor set of results.

    So, a win for Standard Life and a win for the NO brigade.

  • Many thanks Michelle for giving some balance and clarity to this issue. I first heard of the Standard Life stance on Radio Scotland this morning whilst driving and my first reaction was one of dismay that a Scottish company could threaten to leave an independent Scotland, subsequent radio news reports turned my dismay to anger.
    Knowing the Mainstream Scottish Media’s agenda for anti-Yes spin I checked with the SL press release on-line and realised the extent of the misinformation being deployed by the No cheerleaders. I have a great deal of sympathy with SL as they and their employees will have their reputations damaged by unionist lies.Many Yes supporters and undecideds who are only informed by the MSM will react in anger (I heard some respondents on BBC Scotland Morning Call today threaten to cancel their SL policies). Perhaps it would be in their best interests if SL would issue another press release clarifying their position and condemning those who have done the company such disservice and so badly misrepresented their intentions.

  • Osborne can’t force a plan B.

    The truth is that Sterling hasn’t crashed because it still, presently very substantially, benefits from Scottish exports contributing to the UK’s overall balance of payments.

    Upon Scottish indy the UK can agree to a Sterling Zone currency union or it can reject it. If it rejects a Sterling Zone currency union then Scotland’s exports will no longer contribute to the rUK’s balance of payments, resulting in the rUK BoP deficit doubling from around 5% to around 10% of GDP. An overnight doubling 18 months after the YES vote on the 25th of March 2016 of the rUK’s BoP deficit would be catastrophic for sterling and, in all likelihood there would be a run on the pound as the money markets attempt to dump Sterling.

    To mitigate this the rUK Treasury will hike interest rates in an attempt to stabilise the currency but it will fail just as it failed during the infamous Black Wednesday. In short, the pound needs Scottish exports (Oil/Gas, fisheries, whisky etc) to help keep down the BoP deficit.

    Also, after indy Scotland will negotiate its fair share of the UK debt (minus assets). This debt will be repaid to the UK Treasury, not to the money markets. It is inconceivable that the rUK would wish that debt to be paid back in anything other than the pound Sterling thereby, ipso facto, bringing about a currency union.

    Finally, why would the rUK Government wish to inflict transactional costs for businesses in rUK to do business with its second biggest trading partner when there is a viable way to avoid such additional overheads?

    The rUK can, of course, reject a Sterling Zone. If it does that then it will be blowing two big holes in its feet. I suspect, however, upon a YES result in the indy referendum common sense will prevail and a pragmatic solution will be sought.

    Responding to Standard Life’s comments on the referendum from Standard Life, Finance Secretary John Swinney said:

    “Standard Life’s comments show exactly why our proposals for a formal currency area are the right proposals, why they are in the best interests of business on both sides of the border and why that is what will be implemented by both governments.

    This also shows why the UK Government have a duty to engage properly with the issues instead of issuing irresponsible threats. The Governor of the Bank of England has already agreed to further technical discussions with the Scottish Government on a currency union, and there is no reason the Treasury cannot do likewise.

    As Osborne and Carney won’t want Scotland to take a plan B as this also means transaction costs – some £700m applied to English-based businesses exporting to Scotland.

    Scottish consumers would then look to dump English- source products, harming the English economy.

    The pragmatic solution is a Sterling Zone. It’s every bit as much of a benefit to the rUK as it will be to indy Scotland.

  • […] I worked for Standard Life over 16 years between 1991 and 2006 in a variety of senior roles. During my time at the company I worked on a series of projects including the demutualisation project, which readied the group for flotation. It came as a surprise to me to hear claims that the company had  […]

  • When I heard the negative stories on Radio 4 this morning I was absolutely furious. As a shareholder and customer of Standard Life I was on the point of transferring all my funds, not that there is much, elsewhere. Anywhere.
    Now reading Michelle’s statement it is obvious this has been spun by the media as another scare story.
    What does make me angry is that the BBC has been trailing this all week. Which to my mind means that there is someone in Standard Life deliberately leaking information to the media in the full knowledge that this will be used as another item in the “Project Fear” catalogue.
    I think I shall have few questions at the AGM

    • I sent SL a stinker of an email last night on how furious I was with their shabby treatment of customers and staff and how I woule be withdrawing my meagre funds and selling my shares.

      It will hardly make a blip on their assets but maybe if enough folk threaten it, then SL may just realise how much the have been set up by the BBC (etc) and the damage has been done to their reputation.

    • I have a small pension with Standard Life but as with other comments, it is obvious that there are many other Scottish shareholders.. if Standard Life do not make a statement of clarification I think there will be a lot of folks asking to transfer their shares/pots to other companies, which to be honest, I cannot see Standard Life liking one little bit… please come out of the hedge and tell us this is misinformation from the NO campaign…

      • Standard Life is Scottish owned. It has an estimated 4 million customers, 90% live in rUK.
        UK pensions contributions contain tax relief given by HMRC. I believe such tax relief is only given on UK based schemes.
        A statement from Standard & Poor said ” The composition of Scotland’s financial is unusally
        large with total assets estimated at 12.5 times GDP.” Standard Life is only guarding is interests

        • Hi Donald please supply a link / source for the statement that standard Life is Scottish owned?


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