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Is there actually any point in planning for independence now?

STANDARD Life and Scottish Mortgage Investment Trust are both pillars of Edinburgh's financial establishment but their opinions on the value of contingency planning ahead of the independence referendum could hardly be more different.

This week, Standard Life once again hit the headlines when chairman Gerry Grimstone went on the offensive to defend the Edinburgh life and pensions giant's high-profile warning in February that it might move parts of its operation south of the Border in the event of a vote for Scottish independence. The group's intervention in the independence debate was, not at all surprisingly, a big talking point at its annual meeting in the Scottish capital on Tuesday.

Responding to a shareholder who complained chief executive David Nish "should stay out of politics, it is not his job" and that the board had "acted disgracefully by making public what it thinks it might or might not do", Mr Grimstone said Mr Nish and the group were strictly politically neutral.

Mr Grimstone declared: "We would have been strongly criticised if we hadn't made our position clear - we would be failing in our duty if we hadn't looked at contingency plans."

Laying out the scale of the Standard Life group, he added: "We have over 180 Scottish funds and companies ... Who knows, every one of those if there was constitutional change might be affected. This is a very detailed matter."

His comments are in stark contrast to those of John Scott, chairman of the Baillie Gifford-run Scottish Mortgage Investment Trust. Writing in the £3 billion Scottish Mortgage's annual results, published last Friday, Mr Scott made plain his view that it would not be a good use of either shareholders' funds or management time to undertake detailed contingency planning at this stage. He also argued there would be plenty of time, after the September 18 referendum, to consider any action that might have to be taken.

Mr Scott wrote: "Scottish Mortgage, as its name suggests, is registered as a Scottish company and the managers, Baillie Gifford & Co, form a Scottish partnership. The board is well aware of the issues arising out of the vote and there are many actions that might be taken to prepare for various contingencies, and all of these come at a cost. Consequently, our current view is that to start any processes now, before the result of the vote is known and before the relevant putative issues have emerged, would not be a good use of shareholders' funds and management resource."

Spelling out just how much time there was likely to be to take any action necessary, Mr Scott told investors: "In the event of a Yes vote, we understand that there will be a period of negotiations, which will probably be followed by a transitional period following independence. Consequently, the board believes it will have ample time to assess the economic (including taxation and currency), political, and regulatory landscape which might emerge and to formulate Scottish Mortgage's response accordingly."

This point about there being no need to rush into making plans chimes with recent comments from Martin Gilbert, chief executive of Aberdeen Asset Management. Mr Gilbert said last month: "I think there will be plenty of time after the referendum to make whatever plans are necessary or changes are necessary."

The whole tone of Mr Scott's comments last week about the independence referendum appeared relaxed. Specifically, he emphasised the independence question was only one of a number of political risks and declared any actions in relation to constitutional change would be "measured".

Mr Scott wrote: "This referendum is only one of a variety of political risks facing the company which are considered by the board on a regular basis. The directors are aware that a large number of shareholders are resident outside Scotland and they will act in a pragmatic and measured way to ensure that shareholders' interests as a whole are protected."

While we must recognise Standard Life is big and complex, in the context of the question of when and how to plan for a scenario of independence, Scottish Mortgage is also a major player. Scottish Mortgage is the UK's largest conventional investment trust, with tens of thousands of private investors.

And, from an external perspective, the stance taken by Scottish Mortgage seems eminently more sensible.

Why not wait and see the result of the referendum first and, if there is a Yes vote, gain a better idea of what will follow in the economic, regulatory and political arenas during a subsequent, fairly lengthy period of negotiation and transition? It is all very well making contingency plans, but is there much point to such an exercise when there are so many unanswered questions?

Mr Grimstone declared this week that "nobody can tell you what the arrangements would be" for regulation in the event of independence.

And, pressed on whether moving operations would mean moving the company's 5000 jobs in Edinburgh from the Scottish capital, Mr Grimstone replied: "No, it won't mean that...but until we know the technicalities, we don't know what the impact will be."

These comments from the Standard Life chairman appear to highlight the sense of Scottish Mortgage's approach, and the futility of planning in any great detail right now.

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