Calls to come clean over Scots job losses in Standard Life-Aberdeen merger

Questions have also been raised over how Keith Skeoch, chief executive of Standard Life, and Martin Gilbert, chief executive of Aberdeen, will work together as co-chief executives governing the enlarged Scottish-based company.

The new firm will site its headquarters in Scotland and Mr Gilbert said the move will enable the business to “compete effectively on the global stage”.

Edinburgh-based Standard Life employs more than 8,000 staff and Aberdeen Asset Management, almost 3,000.

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Following the merger, a spokesman insisted the aim was to grow the businesses, and create a “powerhouse in asset management” capable of competing with its huge US rivals.

Three years ago Aberdeen Asset Management bought Ignis Asset Management - the Scottish Widows fund management arm of Lloyds Banking Group - resulting in the bulk of its 250 Glasgow-based staff being made redundant.

Following concerns over job losses in the north-east, Gordon MP Alex Salmond said he had been “reassured” by Mr Gilbert, from Aberdeen Asset Management.

Scottish Labour leader Kezia Dugdale, who met with Standard Life in Edinburgh on Monday morning sought assurances that jobs will be protected.

She said: “Financial services are one of the powerhouses of the Scottish economy. If this merger sees Scotland punch even further above our weight then that would be a great thing.

“However reports of a ten per cent cut in the workforce is concerning. These are two huge employers in two of Scotland’s most important cities, and job cuts would be bad news for the economy.

“The management has so far made encouraging noises about expansion for a new merged company, but that expansion should not be funded by cutting jobs in Edinburgh and Aberdeen.

“Labour will continue to monitor this situation closely. Financial services have been a Scottish success story, with our expertise taking advantage of being part of a bigger UK market. We want it to stay that way.”

Patrick Harvie MSP, the Scottish Greens’ finance and economy spokesman the "overarching priority" should be to protect the existing staff" as the main reason suggested the merger was to grow the newly created business.

"What’s good for shareholders is often not what’s best for employees, but I hope that every step is taken to either retain or support departing staff to find new jobs. The new company must urgently clarify what the merger will mean for all of the workforce," he said.

Scottish Conservative shadow economy secretary Dean Lockhart said the merger has the potential to ensure there is a genuine global player in fund management with headquarters in Scotland.

He added: “We have concerns over the impact on jobs but we hope that the two companies will ensure that any losses are kept to a bare minimum and that staff get the clarity they need as quickly as possible.”

A Scottish government spokesman said the proposed merger is a "potential vote of confidence in Scotland's financial services sector".

"We will be engaging with both companies as the merger progresses to discuss employment and investment in Scotland," the spokesman said.

"We welcome the intention to grow the business in Scotland and to build on the expertise and skills of both companies and strengthen Scotland's reputation for fund and asset management.

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"The Scottish government has been in contact with both companies and as plans for the merger are confirmed the Scottish government stand ready to support the new business and their employees."

Standard Life’s marriage to Scottish rival Aberdeen Asset Management has been eight years in the making.

Sir Gerry Grimstone, the Standard Life chairman first made the suggestion in 2009 and approached Aberdeen chief executive Martin Gilbert about merging their businesses.

At the time, Mr Gilbert put off the flirtation, wanting to remain independent with a strategy for growth of Aberdeen, the investment business he co-founded and has led since 1983.

But it is understood that the idea sprouted wings last summer when Gilbert and Grimstone sat down over a drink not long after Britain’s Brexit vote.

Grimstone will now chair the new enlarged company. Standard Life, which is based in Edinburgh, was founded in 1825 as a life insurance company and moved into dedicated asset management with the creation of Standard Life Investments in 1998. It is now a global company with 1.2 million shareholders across 50 countries.

The company’s expansion came at the start of the 20th century when it moved from selling annuities and basic types of insurance to providing group pension schemes, savings and investments.

By the 1950s they became the largest life assurance company in Scotland and have since grown to serve millions of customers around the world.

Aberdeen Asset Management was founded in 1983 by a group of investors, including Gilbert, its chief executive, when they bought a £50 million investment trust.

In 1991, it was listed on the London Stock Exchange, under the name Aberdeen Trust Plc and now has more than 2,500 staff across 37 offices in 25 countries.

It manages assets of £302.7 billion and is considered one of Europe’s largest public, pure-play investment managers.

Gilbert, 61, divides his time between Aberdeen and London, as well as overseeing the international operations of the group.

One of the best known Scots in London’s square mile, he was born in Malaysia and educated at Robert Gordon’s College, Aberdeen and the University of Aberdeen. He has a long CV of current and former board appointments, including being deputy chairman of satellite TV giant, Sky, as well as formerly chairing FirstGroup.

He has expanded the group relentlessly through a 34-year deal spree, although it nearly went bust in the early 2000s after the split capital investment trust scandal.