A federal UK future?

In the beginning…

There has been much discussion amongst political commentators on the promises made as part of the Scottish Referendum campaign.

While the focus has been on Scotland and the further potential devolution of powers, there has been an increasing lobby of English MP’s who are unhappy about the powers gravitating to Scotland, particularly when Scottish MP’s sitting in the UK Parliament can vote on matters affecting all of the UK.

Local division?

Scotland, England, Wales and Northern Ireland are of course separate countries making up the United Kingdom, and as such perhaps easier to define in constitutional terms. There is however an increasing debate over whether devolution of certain powers, including taxation, health and education could be achieved in certain English counties, such as Cumbria, Northumberland and Yorkshire – natural territory, of course for Armstrong Watson and our clients. Those counties, and others such as Cornwall, are recognised as having strong local identities, and it is of no coincidence that they are at greatest distance from the capital.

So could we end up with a Federal United Kingdom with devolution across counties or regions? This would be much closer to the North American model, where states govern many functions and set different tax rates for individuals and companies, as well as sales taxes.

A step too far?

Well, one outcome from the Scottish Referendum experience is that there is strong momentum for change and further devolution. I believe that there is also now strong momentum for devolution right across the UK, and change, of some description, is inevitable.

What does that mean for those of us running businesses? Perhaps little in the short term, but planning ahead for those operating across different regions will be crucial and we are here to help and guide you as the future shape of local regional and national government evolves.

Douglas Russell, Partner, Dumfries