By Martin Kelly
Recently a few UK businesses have decided to enter the independence debate. Their annual reports contained a nod to this September’s referendum – some a little more than a nod.
In truth most were pretty anodyne and the statements were less about entering the debate on independence and more about satisfying a requirement to acknowledge there was a possibility that Scots could indeed vote to end the Union.
By Martin Kelly
Recently a few UK businesses have decided to enter the independence debate. Their annual reports contained a nod to this September’s referendum – some a little more than a nod.
In truth most were pretty anodyne and the statements were less about entering the debate on independence and more about satisfying a requirement to acknowledge there was a possibility that Scots could indeed vote to end the Union.
Others though went a little further and decided to inject what looked like politically motivated ‘explosive’ claims into their dull statements. Two in particular caught the attention of the media, not least due to their close proximity to the issue of currency and all things fiscal.
Standard Life was one of the first out of the block with a carefully worded statement that did just enough to ensure the pro-Union media got the message. An announcement that the Scottish based company was making contingency plans to register businesses outwith Scotland resulted in the now familiar apocalyptic headlines when the company said:
…we have started work to establish additional registered companies to operate outside Scotland, into which we could transfer parts of our operations if it was necessary to do so.
On Friday another company, Alliance Trust, joined its financial cousin when it issued a similar announcement.
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.
A blow for the Yes campaign ran the media narrative, from two well-regarded investment companies who were merely looking after the interests of their investors. They were taking no sides in the referendum campaign we were told. Taken at face value that is how it looked. After all, why would any company risk its business by taking sides in the independence referendum?
But as ever in this game of constitutional to-and fro as each side in the independence debate seeks to gain an advantage over its rival, there is more than meets the eye in the cases of Standard Life and Alliance Trust.
Standard Life has form when it comes to the constitutional debate. Back in 1992 when the campaign for a devolved Scottish Parliament was gaining traction, Standard Life issued the same warning as it did last month.
In 1992, its then Managing Director Scott Bell said: “Any constitutional change which was likely to create uncertainty especially among the 90 per cent of our UK customers who reside outwith Scotland could damage that Trust and could therefore have an adverse effect on our business in future.”
The man in charge of the company as it issues its latest claim of impending doom if Scots vote Yes is one Gerry Grimstone. In the Edinburgh-based insurer’s annual report, Grimstone, chairman of Standard Life, says of the company’s Scottish links:
“We very much hope that this can continue. But if anything were to threaten this, we will take whatever action we consider necessary – including transferring parts of our operations from Scotland – in order to ensure continuity and to protect the interests of our stakeholders.
“We will continue to seek further clarity from politicians on both sides of the debate, so that we can reach an informed view on what constitutional change may mean for our customers, our business and our shareholders.”
But what of Mr Grimstone himself, is there anything we haven’t been told amid the flashing lights, crash-bang-wallop and smoke that has accompanied the media headlines?
The short answer is yes.
The man who is warning of the perils of a Yes vote is a self-confessed admirer of Margeret Thatcher. In the 1980s he was a UK Treasury Assistant Secretary responsible for privatisation policy having been appointed by Thatcher herself to oversee the sell-off of state owned assets.
Last April, of his time working for the Conservative Prime Minister and her Chancellor Nigel Lawson, he wrote:
“It oversaw the privatisation programme, and we prepared a quarterly report that went into minute detail as to what stage the 50 or so privatisations we were overseeing had reached.
“Mrs Thatcher loved it,”
He added:
“Were we selling the family silver? I challenge this. The purpose of the programme in those early Thatcher years was never only to raise money. We were selling commercial businesses that never should have been in the public sector or introducing market forces and the discipline of the capital markets into key sectors that had been stifled by state ownership.”
But his links to former Westminster Governments does not end there, for in 2009 he was also appointed as an advisor to the last Labour Government on … wait for it … the selling off of state owned assets in order to help reduce the then worrying £1 trillion deficit.
Grimstone was appointed in January 2009 by Gordon Brown, then Prime Minister, as “business ambassadors” for Britain. Grimstone has been courted and praised in equal measure by both Brown, who he accompanied on foreign trips, and Alistair Darling.
More interestingly, Grimstone is also Chairman of a London based lobbying group called TheCityUK which boasts of having excellent working relationships with senior officials in:
- HM Treasury
- The Department for Business, Innovation and Skills
- The Financial Services Authority
- The Foreign and Commonwealth Office
Somehow, it’s not surprising then to find a company controlled by Mr Grimstone issuing statements that aid the campaign being pursued by the current Conservative Prime Minister and his Labour allies in the Better Together campaign.
In the case of the Dundee based investment company Alliance Trust it’s also worth noting a couple of interesting and but unreported facts about its COE.
Alliance Trust is headed by the impressively named Katherine Garrett-Cox who was once referred to as ‘Katherine the Great’. Her CV is equally impressive with key positions within a string of blue chip companies to her name.
What few people also know is that Garrett-Cox is also a member of David Cameron’s special Business Advisory Group (BAG).
According to the UK Treasury, BAG is:
A small group of business leaders from sectors of strategic importance to the UK provide regular, high level advice to the Prime Minister on critical business and economic issues facing the country.
This group was set up in 2012. One year after joining the group it was announced in the New Year’s Honours list that Garett-Cox was to be awarded a CBE in part, “for her services to the asset management industry”.
On Friday, Garret-Cox issued several additional statements following the official company press release.
“What is very clear from conversations and communications we’ve had with our customers is that this is at the top of their list of risks, and that’s why we felt that we needed to be completely transparent about what’s happening here,” said one.
But when asked to demonstrate this desire to be “completely transparent”, Garret-Cox seemed to alter her stance. Asked whether the company envisaged moving all its operations, or just its legal domicile, to England in the event of a yes vote, Alliance Trust refused to say.
There was also a marked reluctance to confirm whether the company backed the Scottish Government’s stance on a currency-union in the event of a Yes vote, or whether it supported calls for the UK Government to seek clarity on EU membership of a newly independent Scotland, something the European Commission has pledged to do.
However perhaps the most surprising answer came when a freelance journalist from Newsnet Scotland asked whether David Cameron’s In/Out EU referendum was causing concern?
An official spokesperson replied: “This is not an issue that our shareholders and customers are concerned about at the moment.”
However, according to the Herald newspaper, “The company statement highlighted areas of uncertainty for the business, including the jurisdiction and taxation of individual savings and pension plans, financial services regulation and consumer protection.
“It also raised concerns surrounding currency and membership of the European Union.”
So, the CEO of a company who advises David Cameron, and has been awarded with an honour by Cameron’s Government in part “for her services to the asset management industry”, has issued a statement which helps the Prime Minister and his allies in the fight against Scottish independence.
When asked about David Cameron’s In/Out referendum, the company claims it is of no concern to investors but when asked in terms of the independence referendum, then EU membership is a concern. Hmm.
I’ve looked at Standard Life and Alliance Trust and their backend connections to the Westminster power elite. The same can be said for other companies who allowed themselves to become pawns in the drive to suffocate the independence debate with nebulous claims of ‘risk’ and ‘uncertainty’.
Aggreko warned that Scottish independence will lead to “years of uncertainty and hiatus” for the business. The company’s chief Rupert Soames has well documented links to the Conservative Party and the London elite. His brother is a Tory MP, his parents were both members of the House of Lords and he is the Grandson of the ‘daddy’ of British Unionism, Sir Winston Churchill.
BP Chairman Bob Dudley who started off the media circus and its use of big business to attack independence, accompanies David Cameron on trips around the globe. Shell, whose Chairman also gave his backing to the No campaign by saying he wanted Scotland to remain in the UK, hosted Cameron and other cabinet ministers on their recent trip to Scotland.
Of course none of the above is definitive proof that the statements issued by, or on behalf of the businesses these people head, have been issued for political reasons. However it is interesting nonetheless to provide a transparent picture of the backgrounds of those whose opinions the media choose to amplify.
After all, BBC Scotland’s business and economy editor Douglas Fraser was quick to claim comments supportive of Scottish independence from the heads of British Airways and Ryanair were made in part because both Michael O’Leary and Willie Walsh were Irish.
The same (although non-ethnic) highlighting of the backgrounds of other business figures would be refreshing.
