The past few weeks in the Scottish independence debate has been dominated by pronouncements from the helms of multinational concerns which have been faithfully misinterpreted and misreported in mainstream media. Par for the course – despite their duty to inform, even the most public service of broadcasters has one primary goal. To entertain.
With ever shrinking attention spans, it’s case of blink and you miss it if your station, paper or site should go in for anything as dreary as informed analysis. So we’re (or I am at any rate) used with digging a bit beyond the BBC and the broadloids in search of something close to the truth.
A bit of condensation is a career necessity for journalists – it’s what they do. And why not. But let’s take Standard Life and try to unpick what’s going on (if I can do it, I guarantee you can follow it). As part of the group’s annual reporting, the Chief Exec stated that directors and managers had “started work to establish additional registered companies to operate outside Scotland, into which we could transfer parts of our operations if necessary”.
Now I work in finance. The firm who pays my wages (and for whom I do not speak here) has operations in 140 countries. Some of them have greater political and stability than Scotland does on the cusp of the independence vote, but not many. Plenty of them suffer from systemic economic issues, political corruption, poor education and failing infrastructure.
And on a day to day basis, executives at and or near the top of these organisations make calculations around how safe and profitable it is to do business in every one of them, and how safe and profitable it is to do business in potential alternatives. That is part of their (very lucrative) job.
I haven’t read Standard Life groups annual report from cover to cover, but the headline their statement was reported under was “Standard Life could quit Scotland”. Making contingencies doesn’t infer an intention to quit. Many years ago when I was more able I would often purchase (significant) quantities of alcohol on a Thursday evening. Were someone to report the next day that I’d decided against going out, they would be very wrong, and very corrected.
Now I’m not surprised these firms have made the pronouncements they have. I’m not surprised that media institutions with a vested interest in the future of the British state misreport them. I’m not even surprised that when I turn up to work in the morning some of the subtleties of the situation have been wasted on certain interested observers.
Nor am I at all convinced that Scotland will become a less attractive playground for business in general, and for finance in particular – for these reasons.
- Geography’s history – plenty nations have seceded from the British Empire. Within these British isles the Republic of Ireland is home to plenty of succesful and profitable businesses in and around the financial services sector. Yes, they were much more stable in the era of the centuries old sterling based currency union than under the volatility of the eurozone, but count the list of so called evacuees from an independent Scotland and I’d be surprised if you find many that can’t navigate a bit of jurisdictional diversity in Dublin. Ditto the Isle of Man, Jersey, Guernsey – all magnets for money management more because than in spite of their difference from London.
- It’s the economy stupid – I’ll leave off the fact that we invented modern political economy in the 18th century. Businesses are interested in markets. They’re interested in commercial markets for their products, and interested in labour markets to provide them to their clients and customers profitably and efficiently. Wealthy people live in Scotland, and they will continue to live in Scotland after September 19th 2014. There is a large pool of highly talented, well educated Scots, a good infrastructure and all for a fraction of the cost McNish and Co will be shelling out if they run off to Canary Wharf.
Yes, there is uncertainty. No, that’s not a comfortable position for the Fred Goodwins of this world. Certainly, the economy of an independent Scotland could well go through a period of rebalancing, and by 2024 it could well be a much more diverse place with other sectors benefiting from space created by the winds of global capital wheeching some of the fluff off the top of a sector bloated on bail outs and pussy footers.
But I’d be offering pretty long odds on no-one coming along to handle the portfolios of the oil rich households of the north-east, on no-one being interested in structuring our AAA rated bond issues and on on no-one taking advantage of the opportunities we can’t even yet imagine offered by an independent Scotland.
And I’ll bet the house on this – a government elected by the people of Scotland for the people of Scotland has far greater interest in the people of Scotland than the boardroom population of the early 21st century. The rich will always be with us, but the chance to bring people, businesses and government into closer co-existence, co-operation and interdependence lies in a box marked Yes on September 18th.