Financial chief criticises ‘severe overreaction’ as post-indy business scares escalate


  By Martin Kelly
Claims that there will be an exodus of businesses and jobs from an independent Scotland have been described as ‘severe overreaction’ from one of Scotland’s leading financiers.
Angus Grossart, chairman of merchant bank Noble Grossart and one of the most influential figures in the Scottish financial establishment, said some commentary on the referendum’s market impact had been “severely overstated” and people should “stay cool and not panic”.

“I think it is getting out of hand, a severe overreaction,” he told the Financial Times. “The FTSE seems perfectly stable today, but to hear some of the comments you almost expect people to be predicting a plague of locusts or mice next.”

Mr Grossart’s comments follow an escalation of threats from some businesses that they will move some of their operations from a newly independent Scotland. 

Yesterday Standard Life re-issued an earlier statement on its own plans should Scots vote Yes in the independence referendum.  However the company also revealed it had contingency plans in place in the event of a No vote.

In another intervention, claims that a surge in support for Yes has led to a drop in the value of Scottish based companies have also been challenged by another leading financial figure.  Sir George Mathewson dismissed claims from Unionists that a fall in share prices was due to fears over Scottish independence.

The former Chairman and Chief Executive of Royal Bank of Scotland said: “The share prices of the major Scottish public companies have actually risen by an average of 4.9pc compared to a 3.7pc ftse rise since the peak of No Campaign support in September 2013.

“Over that period, more and more voters have moved to Yes as the polls tighten. This data includes the latest increases in share prices today as it became clear the weekend’s YouGov poll was no flash in the pan.

“The No Campaign’s scaremongering is derisory, damaging and desperate. This is a time for common sense to replace the politicking of Westminster politicians.

“Scotland choosing to determine its own future is a very sound proposition not just for people here but for the wider British economy and the financial markets.”

There was a further boost for the Yes campaign when the boss of Scotland’s largest fund manager said independence would not harm Scottish business.

Martin Gilbert, Chief Executive of Aberdeen Asset Management, said he thought an independent Scotland would be “a big success”.

Mr Gilbert also dismissed claims that any UK Government would block a currency union with a newly independent Scotland.

He said: “A sterling union would be both highly desireable and highly likely, whatever is said in London now.”

The financial chief also highlighted the implications of a currency union block should the three London based parties carry through their threat not to share assets with Scotland and end up with all of the UK’s debt.

He added: “Low or no debt would be in the position if an independent Scotland were denied access to bank of England financial assets, and that would leave the newly independent country in both budget and balance of payments surplus – not a bad start.”

He said Scotland was in the top twenty in terms of wealth, saying: “Most sensible people now accept that Scotland would be properous with either outcome in the current constitutional debate.”

Welcoming the interventions from the prominent figures in the finance sector, Finance Secretary John Swinney said:

“This is a significant intervention from well-respected figures in the financial services sector.

“As Martin Gilbert says an independent Scotland can and will be a big success.  With the powers of independence we can support our economy and ensure continued economic growth.

“And the comments from John Kay and Sir Angus Grossart put the activity of the market and the financial services sector into some very welcome perspective.”

Commenting on Scotland’s financial services sector, Professor John Kay of the London School of Economics told BBC Newsnight that reports of RBS moving its HQ was not as significant as media reports were suggesting.

He said: “I believe they are going to shift their brassplate but that’s very different from the operational activities which are taking place in Gogarburn and other parts of Edinburgh at the moment.”

Professor Kay’s comment was confirmed this morning when an official memo from RBS confirmed that the contingency plan to move the HQ address would not affect jobs or operations in Scotland.

John Swinney added: “Scotland is one of the wealthiest nations in the world, richer per head than France, Japan and the UK, and with the powers of independence we will use that wealth to ensure all of Scotland will thrive.”