The best they can hope for is that the demutualisation windfall goes some way to compensating them for the disappointment of their

The best they can hope for is that the demutualisation windfall goes some way to compensating them for the disappointment of their policies.Yet that’s not really the right way of looking at it. Standard Life is being forced into these climbdowns not because it is demutualising, but because it over-promised in the past. As a mutual, Standard could afford the luxury of indulging its customers in a way proprietary companies could not. Now that Standard must make a profit and pay a dividend, there will be less money to service policyholders’ needs. If, as a part of the “smoothing” process life funds adopt, the company guarantees too much in the way of annual bonuses, then ultimately the money will have to come from someone else’s pocket.Some policyholders will regard yesterday’s dose of medication as the inevitable result of the decision to convert. It is only fair that those who believe they have grounds for a mis-selling complaint should act on it within a reasonable length of time, otherwise there is a danger of policyholders hedging their bets until just before maturity to the disadvantage of other life fund members.Likewise, the conditions attached to the endowment “promise”, in particular the achievement of a 6 per cent annual return on capital, have not been met for some years now.

It’s never easy to reconcile yourself to a harsh, new reality, but Standard Life seems to be making particularly hard work of it. The company had to be dragged kicking and screaming by the Financial Services Authority into adopting new, “realistic” solvency requirements and it took the life assurer four years to accept the inevitability of conversion from mutually owned status to plc. To make up the shortfalls, Standard Life would thus have been forced into an ever more aggressive reserving policy, already running at £100m a year, again to the disadvantage of other life fund members The same goes for the overpayment of bonuses. For some policyholders, they are plainly bad news, another kick in the teeth, yet for the life fund as a whole, they are the right thing to be doing. In layman’s language, that means lower bonuses.All these decisions should have been taken ages ago. More significantly, it has decided to renege on its promise to meet endowment shortfalls and it intends to accelerate the move towards payouts which better reflect the policy’s asset share, or the value of the underlying investment. Now three other relics from its mutual past, where customers were meant to come before profits, are being thrown out the window.
Standard Life is following Aviva and others into introducing a time bar for mis-selling complaints on mortgage endowment policies.

According to EU guidelines, anything up to 800 cigarettes, 400 cigarillos, 90 litres of wine (including a maximum of 60 litres of sparkling wine) and 110 litres of beer should be considered to be for personal use, and therefore not subject to domestic excise duties. Above these “indicative” levels, shoppers can expect to be asked to pay excise duty, and possibly fined with the loss of the goods, if stopped by Customs staff. But British duty is also supposed to be paid on all amounts of alcohol and cigarettes goods being brought in for someone else – friends or family – even if it is on a not-for-profit basis.. Many cross-channel trippers do not realise that the free-market rules on drink and tobacco relate only to items for personal use – and bringing in supplies for friends either as gifts or simply on recovery of the cost price is not allowed without paying UK excise duties. Standard Life’s fall from grace is proving a long and painful one, so painful, in fact, that Sandy Crombie, the Edinburgh life assurer’s chief executive, left it to one of his juniors yesterday to field questions on the latest raft of nasties. A Commission spokesman added: “We await with interest the UK’s response.” Government sources said the Customs delegation told Eurocrats its aim is to crackdown on the smuggling of goods which cheats the treasury out of around £3 billion pounds every year.

The Commission says innocent shoppers are being caught up in over-zealous checks and face hefty fines, the seizure of goods and even the confiscation of their cars. That is not disputed – but the Commission says Customs staff are too heavy-handed when dealing with shoppers who bring in goods for family and friends on a not-for-profit basis. Both sides issued an agreed statement saying the meeting had been “good and constructive”. In reality no more action is likely until early next week – but there was little sign after the latest talks of any breakthrough that would resolve the dispute. Yesterday’s meeting came as a Saturday deadline loomed to either ease “disproportionate” penalties or be taken to court for alleged breaches of EU rules on the free movement of goods and people. Usually their only offence is to exceed ill-defined and informal limits on how much drink and alcohol they can bring back from the continent for personal use without being subject to UK excise duties.