Tods Murray: The legacy of the referendum will cast a long shadow

Lawyers south of Hadrian’s Wall may well be forgiven for waking up this morning and wondering what all of the fuss was about as Scotland rejected Alex Salmond’s vision for independence, voting yesterday to stick with the union of Great Britain and Northern Ireland.

After all, over two years of campaign promises, claims and counter-claims, vast forests of campaign literature and news print, and oceans of blood, sweat and tears expended in the pursuit of independence has disappeared in a puff of smoke following the confirmation of this morning’s result.

If only it was that simple.

Whether we like it or not, the legacy of the independence referendum will cast a long shadow on the constitutional and economic future of the UK for some time to come, as promises made in the final weeks of the campaign on enhanced devolved powers for Scotland covering finance, welfare and taxation, now have to be delivered.

The work on transferring power starts as of today with the main Westminster political parties at least committed to pushing through a swift legislative timetable in an already congested legislative programme – a consultation paper by the end of October, with a White Paper by the end of November and draft legislation for a new Scotland Act by sometime early in the New Year – all the while assuming that they can agree what those enhanced devolved powers will actually look like in the coming months.

And if there are more devolved powers for Scotland, it’s only natural to expect that the calls for similar powers to be devolved to other areas of the UK like Wales, Northern Ireland or the north of England will become more vocal over time.

No matter which way you hoped the vote would go, today’s result should at least go some way to restoring a degree of certainty for the business community in Scotland and the rest of the UK on issues such as currency, pensions and EU membership, at least in the short term, and one would hope that this will help clear the backlog of instructions and delayed investment decisions in Scotland that have been on hold over the last six to eighteen months.

Longer term, uncertainty still remains an issue, particularly given the narrow margin of the vote. The Scottish government has signaled that independence will not be back on the agenda for at least another generation but some within the pro-independence movement have said that that could be as short a period as five to ten years. Other factors could accelerate renewed calls for independence, for instance if the UK decides to go ahead with an in-out referendum on Europe in 2017 or a majority Conservative government is returned after the May 2015 Westminster elections.

In this light, it will be interesting to see whether there is any long-term fall-out from the independence campaign.  Having made their positions on independence clear and taken sides in the debate (however reluctantly), some banks and businesses may take the view that independence is still a risk (albeit a long-term one) and may take the opportunity to restructure their business organisations south of the border, much in the same way that the banking sector upped-sticks and moved from Montreal to Toronto following the last referendum in Quebec in the mid-nineties.

As with much of the independence debate over the last two years, a lot of this depends on how well your crystal ball is working at any given time but what we can say with certainty is that the die has been cast and things will never be the same again.

Rod MacLeod, banking and finance partner, Tods Murray