Standard Life boss says 'I'm so sorry' over racist remark

A GASP echoed around the room before staff at Standard Life's Edinburgh headquarters were left in stunned silence, as the chief executive of one of Britain's most respected financial institutions attempted to joke that controversial changes to their pension plan were akin to the "nigger in the woodpile".

Moments later, Trevor Matthews must have realised he had made a dreadful gaffe. Yet, according to staff, despite horrified looks in his direction, he chose to plough on with his presentation without apology.

As a damage-limitation exercise swung into action to protect Mr Matthews, the head of Standard Life's life and pensions business, employees told last night how they struggled to take in what had just been said at the meeting.

One member of staff said: "There was a sharp intake of breath after he said it and then the room went quiet. No-one could believe what they'd heard."

The phase Mr Matthews used is generally recognised as an offensive way of suggesting a hidden, evil influence.

Mr Matthews, 54, made his incendiary remark after being asked why details of Standard Life's proposal to close its final- salary pension scheme had been buried on page 126 of last year's prospectus on demutualisation. Provoked by an official complaint, Mr Matthews yesterday issued a grovelling apology to every one of Standard Life's 7,500 employees in Edinburgh.

An e-mail was sent directing staff to a page on Standard Life's internal website on which Mr Matthews wrote: "Good morning, I would like to apologise to you for using an inappropriate phrase during my presentation at the first pensions briefing for SLAL [Standard Life Assurance Ltd] staff after lunch on Monday this week.

"I deeply regret saying what I did - it is not in any way a reflection of what I think.

"As soon as the words came from my lips, I realised that I had made a serious mistake by using a colloquialism that is not in any way acceptable today.

"Everyone acquainted with me will, I am sure, know I am against all forms of discrimination. I assure you I will never use an expression of this nature again. I am very sorry. Trevor."

Mr Matthews, an Australian who is tipped to take over from Sandy Crombie as the Standard Life group chief executive, was forced to apologise after a formal complaint was made by a white member of staff who has a black spouse.

Outside Standard Life's HQ yesterday, staff reaction varied from amusement to cynicism. One worker said of media coverage: "It's all racism now, so what the boss is doing to pensions is off the front pages."

But the general view from staff was that it was not a resignation issue for Mr Matthews.

Another employee said: "It's just a blip. Obviously, the reason people are so angry about it is the pension scheme."

The company has opened a 90-day consultation with staff on the proposals, which are opposed by the union Amicus.

Willie Gibson, the regional finance director for Amicus, said: "This is absolutely scandalous. Remarks of this nature are

not welcome in any walk of life, let alone at presentations of a flagship Scottish insurance company.

"Amicus intends to submit a formal request to Standard Life to discuss a future relationship with the company. The union is ready and willing to work with the company on its workplace diversity policies."