WALTER Boettcher, director of research and forecasting with Colliers International, says that irrespective of personal views, the “No” vote in the Scottish independence referendum has lifted the uncertainty for businesses on both sides of the border.
“While the ‘No’ vote suggests that little has changed, in reality we may be seeing the beginnings of a fundamental shift UK-wide between Local Governments and Central Government,” Mr Boettcher commented. “The referendum has highlighted how a new balance of local and central powers and decision making must evolve to accommodate local aspirations and perceptions of economic opportunity. Regions must have the power to determine their own economic strategies and exploit what they see as their own competitive advantages.
“Scotland will remain part of the United Kingdom, but it will be a Scotland that will join in unison with other UK regions who have also been seeking greater self-determination in regional policy making. From a narrow business perspective, economic and financial confidence has perhaps regained its balance and this will drive higher levels of activity as pent up demand and projects shelved temporarily will be dusted off and pushed through. Certainly property sector leasing and investment transactions both north and south of the border will see a decisive boost.
“From a broader strategic business perspective, given international appetite for infrastructural development by sovereign wealth funds in a very low interest rate environment, the opportunity for commercial real estate investment and development is staggering and may sustain activity levels well beyond the normal limits of traditional property cycles.”
Commenting on the impact of the Scottish referendum outcome on the energy market Tony Ward, Head of Power & Utilities at EY UK & Ireland, said, “A ‘No’ vote is important for the whole of the UK in that it allows the established dynamic in the energy markets to continue its current course.
“The UK markets have developed ever closer and more integrated systems and ways of operating that serve to reduce, then smooth, the cost burden across all users. This also enables investment choices to be made on system-wide merit and help achieve a degree of energy security that can often be taken for granted.
“A major uncertainty has been removed by the vote, particularly for those who were evaluating significant capital investments in Scotland. The EMR reforms and further developments of the UK’s competitive retail market can now progress while taking the UK market into account as a whole.
“The un-picking of this fully integrated market would have likely led to the creation of a significant degree of asymmetry in the separated markets, particularly in respect of the allocation of costs and assets. This is now smoothed by the ability to adopt a nationwide approach.”
