Fresh evidence emerged yesterday that Scotland’s major financial institutions might flee the country if the Scottish vote for independence in September. Standard Life, the insurance company that employs 5,000 people in Scotland, again hinted it would consider leaving, the Financial Times reported.
“We are not disclosing any specific details around our contingency plans,” a spokesperson for Standard Life told Business Insider this morning. (That statement appears to imply that the company does indeed have “contingency plans” for the vote — it just doesn’t want to talk about them.)
According to a transcript, David Nish, the company’s CEO, told analysts on yesterday’s call:
What we will continue to do is look at different ways of how we could maybe react post significant constitutional change. I know there has been some speculation in the press that we have been searching for office buildings in London etc., but we have confirmed that was just normal investment work that Keith’s business (Standard Life Investments) has ended up doing. I am comfortable with the progress we are making but I am not going to go into any details about the steps that we are taking. We are getting so close now to the Referendum that we will be able to understand better in 45 days time potentially what the consequences could be.
That “speculation” came in February when it was reported the company was drawing up contingency plans to relocate to England if the Scots vote “yes” on independence in their upcoming referendum.
The fear is that an independent Scotland would create a financial exodus from North of the border. A new Scotland could be temporarily forced out of the European Union — leading to a mountain of regulatory red tape — and the country might not be able to control its own currency or back the assets held in Scottish banks.
Standard Life held its half-year results call yesterday:
… David Nish, chief executive of the Edinburgh-based financial services group, said: “We do not believe that further clarity has been provided on any of these issues.”
… The company, based in Scotland since 1825, has since been registering corporate entities in England and holding talks with prudential regulators as part of contingency plans.
He also said the company had not spent a “material sum” drawing up contingency plans.
The problem for Scottish nationalists here is that with the vote only weeks away, few big financial institutions are giving any concrete commitments to staying in the country if the poll goes the wrong way. In February, Standard Life said it could transfer operations to England and was already registering its companies in the South.
Even RBS — the Royal Bank of Scotland — has failed to give a full-on commitment to the would-be nation after which it has been named. Earlier in August it said independence could have “a material adverse effect” on the company:
“Uncertainties resulting from an affirmative vote … would be likely to significantly impact the group’s credit ratings and could also impact the fiscal, monetary, legal and regulatory landscape to which the group is subject.
“Were Scotland to become independent, it may also affect Scotland’s status in the EU. The occurrence of any of the impacts above could significant impact the group’s costs and would have a material adverse effect on the group’s business, financial conditions, results of operations and prospects.”
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