Brian Monteith: Yes heads in sand as firms comment
The reaction to the diplomatic and carefully-worded statement from Standard Life last week was as disappointing as it was predictable. Suddenly there were ostriches appearing everywhere as many nationalists sought to dismiss the possibility that one of our six remaining FTSE 100 companies would relocate some of its business activities outside Scotland if the country chooses to leave the United Kingdom.
The same arrogant and contemptuous approach had been taken when supermarket “insiders” were quoted earlier in the year saying that it was highly likely that Scottish grocery prices would go up and English prices down as the ending of a single market would expose the real costs of transport and distribution that would then be passed on to the customer. It was rejected as a unionist scare story because the supermarkets would not go on the record, so it must be a lie.
Unfortunately for Yes campaigners, the chief executive of Sainsbury’s, Justin King, then spoke out and has been supported by others, explaining how the simple laws of economics could see Scottish families face more expensive shopping baskets.
The response of the First Minister was little better than his tweeting tribunes, taking the absurd line that Standard Life’s position was in fact the United Kingdom’s problem, not Scotland’s, as it highlighted the benefits of a single currency.
Well, I don’t expect Standard Life’s competitors in London, Leeds and Manchester to see it that way, as they look to exploit any competitive advantage that Scottish independence might give them. Nor will the 5,000 Standard Life employees based in Scotland, who will be wondering if they will be asked to move to a new location with all the stress and costs that would entail.
In the last few weeks we have not only had Standard Life raise its concerns about Britain’s single market being split in two – with all the attendant costs and regulatory obstacles to overcome – but also RBS, BP, Pensions Insurance Corporation, Sainsbury’s (et al) and Scottish Life have spoken out to varying degrees.
Adding to the uncertainty, Scottish Financial Enterprise, representing our important financial sector businesses, and ICAS, our national professional body for accountants, have issued statements that have warned against the lack of robust plans for Scottish currency or pensions arrangements.
Likewise a survey of the top 33 retail companies operating in Britain, including Marks & Spencer and Boots, by the British Retail Consortium has revealed their worries about the supply-chain management and other financial costs. Time and again they are just dismissed with no proper response – it is just not good enough to put that head in the sand.
None of these announcements have been party political or partisan statements – they are about facts, what we might call the due diligence required before any constitutional change is made. This is about the fiduciary duty of companies to their shareholders, employees and customers. This means that between now and September there will be more statements of a similar nature as many businesses have their year end in the coming months and still have time to produce annual reports before the referendum.
Some businesses will not be impacted by a division of the UK market they operate in – but others will and they will have to say so. Unlike politicians they cannot bluff about the future or offer bluster about its likely financial impacts. How often have politicians made promises only to break that promise once in power?
We should welcome business interventions because they add more detail to help us make an informed opinion. We should encourage business leaders to speak out – for we need more companies to say how independence will impact on their operations and why. Unfortunately when they do, our politicians are more likely to unleash their attack dogs and attempt to demean those they don’t agree with or whose views are inconvenient.
In 1997 the Bank of Scotland governor Sir Bruce Pattullo was shabbily treated by politicians and political campaigners after he warned about higher income taxes in a devolved Scotland before that year’s referendum. Alex Salmond said at the time: “Call me old fashioned, but I think bankers should stick to banking and not get involved in politics,” which was tantamount to saying only politicians had a right to an opinion.
The result was that critical business leaders said very little in that year’s referendum for fear of offending a popular new government – while everybody else and their auntie was free to proclaim their supportive views without fear of ridicule.
Already it has been said that Standard Life’s comments in the past have proven erroneous, it having previously warned against devolution in 1992. But that is to misrepresent its position, for it was not against devolution per se, but warned how devolution risked helping independence to come about – which is indeed where we are. Standard Life has been nothing but consistent – and more prescient than many politicians who criticised it.
There will be some businesses that see an opportunity from independence – such as BA or Ryanair, who both support a significant cut of Air Passenger Duty being offered by an independent Scottish government – a tax that Holyrood does not have any control over. But wait, APD has already been devolved to Northern Ireland and Stormont has since abolished it for long haul flights, pushing traffic up by 14 per cent. The unionist parties could do the same for Scotland in their proposals for further powers, thus neutralising any advantage that nationalists might claim.
The moral of the story is that while politicians go in for the retail politics of offering the electorate bribes that will be funded on the never-never – and thus have a very poor record of delivery – our biggest companies are far more likely to tell it as it is. Not because business leaders are more moral than politicians, but because stakeholders can sue companies over misleading information or statements – just imagine if we could take such action against our political leaders or our governments.