The moves have been led by the banks: Royal Bank of Scotland and Bank of Scotland-owning Lloyds, Clydesdale Bank, Tesco Bank and TSB. Stalwarts of the Edinburgh insurance sector, Standard Life and Aegon UK, have also joined them in saying they would move their registered life companies to England if the Scots chose independence.
They have cited the uncertainty about currency in any fully independent Scotland, as well as a changed fiscal and regulatory playing field, while uncertainties about EU membership after any split remain.
The timing of the announcements looks concerted, or sets a new gold standard for fortuitous timing. Even so, it is welcome that business has finally gone proactive in the debate rather than relocation being the contingency that dare not speak its name.
In addition to those who have said they would move legal domiciles to England in the event of a Yes vote, leading retailers such as John Lewis and Asda warned last week of rising prices in Scotland because of a lack of UK-subsidised distribution costs.
It means business has now gone through three distinct phases regarding the referendum. The sector’s initial response was a strong instinct to keep heads beneath the parapet.
Coming out explicitly on one side or t’other risked alienating customers. That feeling of being on a hiding to nothing led to an early business default position of a “clamour for clarity”: never likely to be completely met by Scotland’s First Minister in order for him to retain some post-referendum political flexibility. In effect, that early business stance just kicked the can down the road. It gave way to companies queuing up to say they had contingency plans in the event of a Yes vote, but – vaguely Blackadder-like – with no details being disclosed. All was pregnant with implication and inference, however.
Now push has come to shove. The business world and Westminster was shocked by one recent poll that showed the Yes vote ahead for the first time. It is said David Cameron explicitly urged Britain’s industrialists to get off the sidelines and warn of the possible consequences for corporate costs and consumer prices of Scotland going it alone.
As a result the viewpoint of much of big business has become a participant in trying to influence the electorate rather than a bystander with concerns. The thing this doesn’t change is the referendum remains manifestly for the Scottish people to decide. The business voice, which leans towards Better Together but is not uniform, is an important contribution. However, the issues transcend the corporate sector and are more viscerally resonant than the price of milk or beans in the shops.
But it is also glib and unfair to deride business warnings as just scaremongering. Or to consider that departing HQs make those businesses somehow beige Scots, lacking in patriotism.
Leading businesses would be failing in their fiduciary duty if they did not spell out their concerns and plans. Knowing where they stand is a valid contribution, and grist to the mill in Scots deciding a momentous issue.
Philips follows in ex-Tesco boss’s ill-fated footsteps
EMBATTLED Morrisons chief executive Dalton Philips, below, is putting a brave face on it, but the 51 per cent slump in profits and 7 per cent slide in same-floorspace sales at the UK’s fourth-biggest grocer has turned the screw on one of the FTSE 100’s more likeable bosses.
He will look at the recent ousting of his former rival chief executive at Tesco, Phil Clarke, to appreciate the uncertain ground he is treading.
There are similarities. Clarke took over Tesco in early 2011, but was not left a particularly good hand to play by predecessor Sir Terry Leahy, with the former’s star-crossed foray Stateside, a tired UK business and growing pressure from the discounters Aldi and Lidl.
Three years later Clarke was dumped, as a major turnaround programme did not seem to be turning Tesco around.
Philips took over a reasonably stable Morrisons from Marc Bolland in 2010, but the supermarket group was way behind the curve in some areas, with no convenience stores or internet offering – the two growth areas of the market.
Although Philips has addressed this, he can be deemed dilatory in doing it. Morrisons is also under pressure from the discounters, and a £1 billion price promotion launched earlier this year has yet to bear fruit.
A key problem is that to its critics Morrisons can sometimes look like neither fish nor fowl in a systemically changing sector. It hasn’t the resilient cachet of Waitrose and M&S, or the price appeal of the discounters. Philips is also in a twilight zone. «