The United Kingdom may never be the same again after the recent brush with breakup when 80% of the Scottish voting public answered the question “Should Scotland be an independent country?”.
The Welsh government encouraged the Scots to vote “no”. But although Wales’s first minister, Labour’s Carwyn Jones, welcomed Scotland’s 55% majority decision to remain part of the UK, he contends that “the old union is dead” as a result of the Scottish vote and that David Cameron needs “to get us all round the table”.
He adds: “The UK has suffered a serious injury. A sticking plaster will not do.”
Devolution is suddenly more, rather than less, complicated and neither Wales nor Northern Ireland wants to be left out.
The Welsh business community feared a Scottish “yes” vote. “The concern for Wales has been the potential for the Scotland debate to disrupt business confidence in devolved nations, where business may prefer not to take the risk of investing in a devolved nation,” says CBI Wales chair Chris Sutton, who is also lead director in JLL’s Cardiff office.
Property stalwart and Cooke & Arkwright chairman Roger Thomas is more forthright: “I’m delighted the Scottish vote went the way it did. If it had got independence, Wales would be clamouring for it too and that would have been a disaster.”
Although the concerns of the property sector were never likely to carry much sway with Scotland’s voting public and the sector kept its collective head down in the run-up to 18 September, much was made of the potential disruption if the “yes” camp won. That change would have gone well beyond a few headquarters occupiers moving to London. In the letting market many relocation decisions were put on hold before the poll, potentially to be abandoned if the vote was “yes”.
Meanwhile the property investment market had feared that, if Scotland left the UK, investors with a UK-only mandate would be forced to divest their holdings north of the border.
But it appears that there is much less appetite for all-out independence in Wales and stoking up even 45% of the populace to vote “yes” might be a struggle.
“I don’t think we’re competent to deal with major powers – there’s too much government as it is,” Thomas says.
However, 49% of Wales does want more devolved powers, according to an ICM Research poll conducted for the BBC days after the votes were counted in Scotland, but only 3% want independence.
And, after welcoming Scotland’s decision, Jones soon got to the nub of it.
“Wales’s underfunding must be addressed. We are underfunded to the tune of £300m a year,” he said.
The prime minister confirmed the devolution to the Welsh Assembly of business rates, stamp duty, landfill tax and aggregates tax – all property-related taxes – in November 2013 after the recommendations of the Commission on Devolution in Wales chaired by Paul Silk. Expenditure is being beefed up too and Wales has been granted the power to borrow up to £500m for the construction of the £1bn M4 relief road, an eight-mile stretch to run south of Newport.
“My view is that this new road is essential for Wales as the M4 serves two-thirds of the Welsh economy and the lack of reliable communications has a corrosive impact on investment into Wales,” Sutton says.
However, no construction will start on the road before the next assembly election in May 2016.
The assembly’s end-September budget announcement also promised capital investment of £95m for infrastructure, including: £30m to start the £57m Cardiff Eastern Bay Link road next year; and £6m toward the £22m A487 Dyfi Bridge, Machynlleth.
Sutton says: “The opportunity now exists for Wales to exploit its devolved powers to create a more attractive business environment than the main market of the UK, England. This would revolve around using the small decision making centre of Wales to act more nimbly – and also includes lowering taxes to incentivise business investment.”
Demand for equal rights
Even the principality’s party of independence, Plaid Cymru, remains muted on a break from the UK. Its leader, Leanne Wood, is more focused on ensuring that what Scotland gets Wales gets too. “That’s the minimum we should expect,” she says.
She will no doubt scrutinise the recommendations to be made by Lord Smith of Kelvin – who led Glasgow’s Commonwealth Games – whom David Cameron has placed in charge of progress on Scotland’s devolution commitments. Powers over tax, spending and welfare are all to be agreed by November with draft legislation published by January.
The extent to which this adheres to Gordon Brown’s plans to change the UK constitution will remain to be seen. Brown’s plan includes:
• a new UK constitutional law, in effect providing a bill of rights to set out UK-wide responsibilities for matters such as defence and security and including a commitment to alleviate unemployment and poverty;
• a constitutional guarantee of the permanence of the Scottish parliament;
• more powers for Holyrood in employment, health, transport and economic regeneration; a new tax-sharing agreement;
• a power-sharing partnership to address problems such as poverty, unemployment and housing need; and
• the transfer of powers downwards from Westminster and Edinburgh to local communities.
