By Chris Rumbles
A Dundee based financial investment company which on Friday claimed it was making contingency plans to move business from Scotland in the event of a Yes vote, has refused to be drawn on speculation that Scottish independence would actually provide a more profitable business environment.
The investments and savings group Alliance Trust released its annual results on Friday in which it listed the Scottish independence referendum as a ‘principal risk’ to its future business strategy.
The trust is the biggest company of its kind in Scotland with estimated assets of £3.1billion. Its operations also include an asset management group and private investor broker service.
In a statement released on Friday the company’s CEO Katherine Garrett-Cox warned that the independence referendum was causing uncertainty amongst its customers.
According to Garrett-Cox: “The referendum in September is creating uncertainty for our customers and our business, which we have a responsibility to address. Regardless of the outcome it is critical that we are able to provide continuity of service and protection for their investments and savings.
“To give them full confidence, we have started work to establish additional companies registered in England, in order to provide operational flexibility and to complement our existing business in Scotland.”
The group’s annual report said the independence referendum was primarily a cause for uncertainty because of issues over financial regulation, currency and EU membership.
However, when asked if the prospect of an independent Scotland was something the business had considered as a development which could have a positive impact, Alliance Trust declined to comment.
According to Winterflood Securities, Scottish independence could lead to an improvement in the business environment.
“It is possible that an independent Scotland may prove a more welcoming regime for investment trusts, particularly in terms of tax treatment. This could see a growth in the sector there akin to that seen in the Channel Islands over recent years,” a spokesman said in February.
On the issue of a possible In/Out EU referendum at UK level as has been proposed by the Conservatives and UKIP, Garrett-Cox was more forthcoming and said:
“This is not an issue that our shareholders and customers are concerned about at the moment. The issue of Scottish Independence is creating uncertainty for our customers and we have made this statement today in order to allay their concerns and reassure them that they will receive the same continuity of service and that their investments and savings will be protected whatever the outcome of the referendum.”
Ms Garrett-Cox went on to say the Alliance Trust was ‘proud’ of its 126 year Scottish heritage. She added: “We are not making a political statement. This is about putting our customers first.”
The UK coalition government is currently split on the issue of an EU referendum with the Liberal Democrats broadly opposed to Prime Minister David Cameron’s pledge to hold one after the next general election. Speaking on The Andrew Marr Show, Energy and Climate Secretary Ed Davey said the idea of an ‘Out’ vote was ‘very dangerous’ for ‘investment’, ‘Britain’s place in the world’, ‘jobs’, and ‘climate change’.
However according to the Times newspaper, the Labour party is also considering a plan to hold its own In/Out EU referendum.
As part of Aliiance Trust’s annual report statement Ms Garrett-Cox made it clear the business was not in a position to ‘stand still’ with business, regulatory and political change all factors to be considered. Ms Garrett-Cox did however stress that the trust had the people and strategy to cope with whatever developments occurred.
The estimated cost of relocating the Alliance Trust’s operations from Dundee to England in the event of a ‘Yes’ vote is still unknown. Another investment trust, Finsbury Growth & Income Trust, said in January that they had investigated such a cost to their own business and had estimated it to be around several hundred thousand pounds.
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