Scots dither as Wales embraces devolution

Scots dither as Wales embraces devolution

New regional assemblies are the chance for local business to boost its influence, says Ben Griffiths, but apathy north of the border contrasts with the enthusiasm in the west.

Barely a month remains until the most profound constitutional change for 300 years hits both Wales and Scotland.

On 6 May, elections to the Welsh Assembly and Scottish Parliament take place. At this late stage, accountants in business should be ready and waiting. But exciting as the prospect sounds for the public and private sectors, business seems reluctant to participate, particularly north of the border.

A straw poll of a recent business seminar in Edinburgh revealed that 80% of those present did not understand – or want to understand – what relevance the Scottish parliament holds for their organisations, even though the parliament has been billed as the most significant development in Scottish public life for years.

So why is there such widespread apathy?

It puzzles Jim Scott, president of ACCA Scotland, as well: ‘The wealth creators and the job creators cannot afford to be left behind or on the sidelines,’ he says. ‘If we are to make sure the new political agenda of Holyrood understands the needs of Scottish business and safeguards its interests, business and industry must network and build bridges of common purpose and common understanding to an extent we have not achieved before.’

ACCA believes Scottish business should be preparing and agreeing corporate policy objectives for dealing with the parliament. Yet speak to most accountants working in Scottish business and the message is clear: ‘Wait and see what happens before getting involved.’

The attitude of Tom King, finance director of Standard Life Group, is typical: ‘The life of the pensions industry will continue to be regulated by the UK government,’ he says. ‘Our ability to do business in the UK will not be altered.’

In Wales, the attitude could hardly be more different. Both accountants and other business people have embraced the concept of the Welsh Assembly.

Welsh businesses – and those based outside Wales but with interests there – seem either to understand, or want to understand, how the subtleties of devolution will affect them far more than their Celtic cousins.

For Wales, which has often been perceived as suffering from a severe shortage of inward investment compared to Scotland, the assembly offers the opportunity to promote Welsh interests, boost profitability and attract further business to the area.

Manufacturing still accounts for much of the industry in the principality.

Trade and development bodies are keen to see companies bringing their headquarters to Wales and offering more white-collar jobs as well as boosting unskilled or more labour-intensive employment.

The Welsh utility company Hyder is a good example of the attitude the Welsh have taken. Embracing devolution, the company even offers career breaks to staff who want to stand as candidates. ‘We would really like the Welsh Assembly to be a vehicle for giving confidence in Welsh business,’ says group finance director Paul Twamley. ‘The assembly can do a lot to sing the praises of Wales to the wider community. Business has been persuaded the assembly will listen to its views.’

The difference in attitude between Wales and Scotland may boil down to involvement. The Government of Wales Act imposes a statutory duty on the Welsh assembly to consult the business community on policy initiatives.

There is no similar provision for statutory consultation with business in Scotland, although the parliament north of the border has tax-raising powers.

Nevertheless, in Wales, concerns about the composition of the bodies have been raised already. According to Cardiff University, not one of the candidates for the Welsh assembly boats a business background.

For two nations traditionally anxious to win freedom from the legislative constraints of Westminster, neither Wales nor Scotland has grasped these issues in both hands.

Business in Wales clearly does see the assembly as a positive step, but risks being under-represented on crucial committees.

Scottish business complacency may yet lead to the sector being ignored by the new body. The lack of engagement during such profound change is worrying indeed.

‘FOREIGN’ FIRMS TARGET SCOTTISH INDUSTRY

Scottish finance directors may seem apathetic about devolution, but a string of recent bids has raised the prospect of Scotland’s leading firms falling into ‘foreign’ hands, writes John Stokdyk.

Last week, Ladbroke confirmed a #1.16bn bid for Glasgow-based Stakis group. Ladbroke refused to confirm any job losses at Stakis’ Clydeside headquarters, but when shareholders approve the bid in May, the renamed Hilton Group will be controlled from London.

Edinburgh-based packaging specialist Sidlaw Group has received a #106m bid from Danisco, a Danish food specialist. Weir Group – a Glasgow-based engineering combine – rejected a bid from US company Flowserve in February, and last week unveiled a #250m war chest to make acquisitions of its own.

Then, Scottish Media Group, which owns broadcaster STV and the Glasgow-based Herald newspapers, was put into play by English media combine Granada when it bought Mirror Group’s 18.6% holding for #110m.

Many Scottish businesses operate in industries which have underperformed in the financial markets, or are too small to attract institutional investors.

Now analysts fear that, whatever happens in May, the country’s corporate base will remain vulnerable.

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