Leader: CFOs must prepare for a more devolved UK

THOSE businesses that voiced concerns over the potential break-up of the United Kingdom will have breathed a collective sigh of relief after Scotland voted to remain within the union. The likes of Standard Life, which had threatened to move south of the border in the event of a ‘yes’ vote, can safely put its contingency plans back on the shelf.

But, businesses may have to dust off similar contingency plans sooner than they like. While Scotland voted ‘no’ over independence, Scotland did not, in essence, vote to retain the status quo. Indeed, as far as devolution goes the genie is well and truly out of the bottle.

Attention must now turn to constitutional reforms outlined by the prime minister within hours of the vote being finalised. The promise of ‘English votes for English laws’ might not jump out as a key concern for business leaders, but the clamour for more devolved powers for England, Wales and Northern Ireland could represent a shift towards greater federalism in the UK.

More tax raising powers for the Scots is just the tip of the fiscal iceberg. Devolution cannot be applied to Scotland alone. The potential for all four of the UK nations to set different tax rules and implement separate business environments – R&D tax credits, business rates, corporation tax – is something companies and their advisers would be foolish to ignore.

Talk of an English Parliament may never become a reality, nor could we end up in a situation where English regions become devolved. But London already has a swathe of devolved powers. Nevertheless, the argument must surely follow that cities such as Manchester, Birmingham and regions such as north east could begin agitating for their own control over tax and spend.

However the arguments over devolution play out in the Westminster village, the UK will never be the same again.