ON THIS most poignant of weekends it is worth noting the words attributed to US Senator Hiram Warren Johnson in 1918 that truth is the first casualty of war. His aphorism applies not only to the battlefield, but also to the boardroom and debating chamber.
As the referendum on Scottish independence draws nearer, the stakes are raised and the language is likely to become stronger. With so little time for the undecideds to make up their minds it is crucial that they do not make this most momentous of decisions based on misinformation.
When I was asked at a Scotsman conference earlier this year how I thought the debate would unfold, I said it would become nastier and that there was a likelihood of dirty tricks by either side. And so it has proved. Having been urged to join the debate, businesses quickly reverted to radio silence after seeing the mess that the CBI got itself into when it registered with the No campaign. Since cancelling its registration, the CBI has said nothing on the issue.
The only businesses to have made any contribution are those either in the Yes camp, largely through Business For Scotland, or those listed firms which are legally obliged to alert shareholders to any potential risk. By and large, these statements have raised only the “uncertainty” surrounding the outcome of a Yes vote. Some have gone further by warning of potential damage to their operations. Others have threatened to move away from Scotland.
Standard Life has probably given the clearest statement of intent, though there has been some muddying of the waters, with a pinch of mischief thrown in. Last week it was reported to be in the process of buying a 90,000sq ft office block in London’s Cheapside with the option of it becoming a new headquarters. Despite the firm’s guidance to the contrary, the newspaper ran with the story and set a hare running that ought not to have got out of the blocks. Standard Life should have issued a straight denial, which it did the following day. But by then the damage had been done.
The big question for all concerned is what “relocation” really means. Even if Standard Life did carry out its threat, no-one seriously expects 5,000 staff to be forced to move south. But it would go further than a mere brass plate at a new registered office, as some try to kid themselves. It may mean relocating the board and key management. Its taxes would be paid to London, rather than Edinburgh. It would be more likely to use London-based advisers. If currency issues become a problem, then the whole basis of the company’s operations would require a fundamental rethink.
And what of that other big Scottish beast, the Royal Bank of Scotland? It is 80 per cent owned by the taxpayer so can hardly argue with the Treasury. Chief executive Ross McEwan told the media a week ago that RBS was staying out of the debate. Yet on Friday it repeated what it said in its annual report, that a Yes vote could impact on its credit rating and that it had concerns about Scotland’s EU membership. It also mentioned the fiscal, monetary, legal and regulatory issues. Hardly a neutral statement.
Relocation is also an issue for RBS, though some would say it is already “based” in London and that its pays lip service to being Scottish. The board would deny this, of course. The truth is out there – somewhere.
Investment likely if Ferrovial lands airports deal
THE process of selling Glasgow and Aberdeen airports, together with a smaller one in Southampton, is under way ten months after I broke the story that owner Heathrow Airport Holdings (HAH) wanted to focus on its key London hub.
This is a sale with a bit of a twist. Ferrovial, the Spanish infrastructure firm and most likely buyer, previously owned all these airports along with Edinburgh, Gatwick and Stansted when together they were known as BAA. In 2006 Ferrovial paid £10.6 billion for BAA but was subsequently forced by the competition authorities to offload some of the assets. Ferrovial, which retains a 25 per cent shareholding in HAH, is now expected to regain full ownership of Glasgow, Aberdeen and Southampton.
One aviation expert said it will be good for passengers to be released from the stifling grip of HAH. But wasn’t that what was said about Ferrovial and prompted the break-up of the group in the first place?
A difference, arguably, is that without the distraction of Heathrow and its negotiations over a third runway – which would also require debt to be raised – Ferrovial will be able to pay closer attention to its new and smaller family of airports. Investment will be top of the agenda, although £17 million has just been spent on upgrading the terminal facilities at Glasgow.
But is this a good deal for Ferrovial, or any other buyer? An £800m price tag looks like the top of the range given that Global Infrastructure Partners paid £807m for Edinburgh. BAA opted to sell Edinburgh rather than Glasgow as it was growing more quickly, had more potential for expansion and would therefore raise a bigger sum. Ferrovial may have other ideas. A deal is expected to complete by the end of the year.