Standard Life warns against Britain leaving EU

European Union

Standard Life has added to the business community’s concerns over Britain’s relationship with Europe, saying that quitting the EU is unthinkable.

Keith Skeoch, the head of the insurance group’s fund management arm, said: “We have no problem with a referendum. It’s a democracy. Where financial markets would be worried would be if there was some kind of exit from the EU. It is not something to be contemplated, really.”

Skeoch, whose business manages investments worth £195bn, said the EU was the foundation for much of the legislation and capital structure in which financial markets operate.

He said European directives provided standards for savings products, which could be undermined if the UK left the EU.Britain should push for reform instead, he said.

“It’s all done at a European level and it would leave quite big uncertainties. There is a whole infrastructure we would have to rebuild and it would really be quite difficult.

“The days of the UK being a standalone capital market in isolation are long gone. It’s a deeply interconnected global world and the UK needs to play to its strength from being the main centre of European finance, and that’s good for the economy and for jobs. It’s just as important for the saver and for the man in the street as it is for the City of London.”

David Nish, the chief executive of the wider Standard Life group, also supported the UK staying in the EU.

“We do believe strongly in single markets because that gives the opportunity for confidence around longer term savings to take place.”

Skeoch said he was increasingly concerned about the future of the eurozone as finance ministers meet in Brussels for crucial talks about Greece’s future in the single currency.

“There is clearly a very significant concern re-emerging at the moment that we are seeing real issues surrounding the eurozone,” he said. “If they have to impose capital controls to keep Greece in, that is really about a two-tier euro and is that the beginning of the end?”

Ed Miliband, the Labour leader, has written to the prime minister asking for more details of his proposed reforms of the UK’s relationship with the EU. David Cameron has promised to hold a referendum on EU membership by the end of 2017, but has hinted the vote could take place next year if the Tories form the next government.

Business lobby groups have said most companies in Britain want to stay in the EU to benefit from trade in the single market. Sir Martin Sorrell, the chief executive of WPP and a supporter of David Cameron, has said the prospect of Britain leaving the EU is a concern for business leaders otherwise sympathetic to the Conservatives.

Skeoch and Nish were speaking as the FTSE 100 group announced annual profits up 19%, beating City expectations.

Operating profit before tax for the year ending 31 December from continuing operations rose to £604m ahead of a forecast £559m.

Nish’s total pay jumped to £5.5m for last year from £4.2m in 2013. Skeoch was paid £5.3m, up from £4.4m.

Standard Life said it would seek shareholder approval for a change to its pay policy only a year after it was first endorsed by shareholders. To unify different payment plans, the maximum award under the executive long-term incentive plan will increase to 500% of salary from 300%.

The company said that though in theory Nish and Skeoch could earn more as a result, there would be no change to their maximum pay without the approval of big shareholders.

Powered by Guardian.co.ukThis article was written by Sean Farrell, for theguardian.com on Friday 20th February 2015 10.10 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010