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The upcoming Welsh and Scottish Parliament elections are likely to result in fragmented legislatures, with the SNP and Plaid Cymru remaining the most likely governing parties but without securing outright majorities. Even modest shifts in support during the campaign could alter parliamentary arithmetic and shape the range of possible governing arrangements.
As a result, post-election negotiations are likely to play a decisive role. Coalition agreements or confidence-and-supply arrangements may determine who forms the next governments in both countries.
Debates around the constitutional future are expected to focus less on immediate independence and more on expanding devolved powers and cooperation between Scotland and Wales. For businesses and investors, political dynamics, parliamentary management and government formation may influence policy outcomes more than manifesto commitments, particularly as new administrations take time to establish priorities and working relationships across government.
Scotland and Wales will go to the polls in two months to elect new governments.
As voters across the UK increasingly reject traditional parties in favour of insurgent challengers such as Reform and the Greens, what does this mean in Scotland, where the SNP has governed for 19 years, and in Wales, where Plaid Cymru and Reform are challenging a century of Labour dominance?
With no party on track for a majority in either country, post-election negotiations may prove as important as the elections themselves in determining who becomes First Minister. The performance of the Labour party in Scotland and Wales could also carry wider implications for the UK Prime Minister.
The devolved powers of the parliaments limit the economic interventions each party can propose. However, a focus on skills, planning, and reform of economic development bodies is emerging, with most parties – except Reform – holding back their taxation policies until the election campaign.
Both elections are flying under the radar of voters, with global events and UK politics dominating the political debate. This means there is still room for movement in polling during the short campaigns.
In Scotland, the prospects of the SNP returning to government are high, with the party holding a significant lead in the polls, although a small surge in support for either Reform or Labour would quickly put the SNP under pressure. The Scottish Green Party is seeking to challenge for a top three position by presenting itself as the left-wing alternative to both the SNP and Labour. Meanwhile the Conservatives, currently the second-largest party in Holyrood, and the Liberal Democrats hope to reach double figures of MSPs, with the latter openly seeking a post-election agreement with Labour if the parties have sufficient MSPs.
The political outlook in Wales is more volatile. The Labour government is struggling badly, with the party currently expected to finish a distant third, while Plaid Cymru and Reform compete to become the largest party. The introduction of a more proportional voting system will likely see Green representation in the Senedd for the first time and could also see the Liberal Democrats increase their representation, while the Conservatives battle to hold onto their traditional voters. Plaid Cymru is best placed to form the next government, with Labour, the Liberal Democrats and the Greens likely to support a Plaid-led government over Reform.
In both Scotland and Wales, the next government is likely to face tightening fiscal conditions alongside rising pressure on public services, including social security spending in Scotland. Despite this, no party has yet set out substantial proposals to address these pressures, with detailed answers likely to be avoided until after the election.
Party policy offers are largely focused on cost-of-living pressures, public services and economic growth, but no clear “game-changer” policies have emerged.
In Scotland, policy development has been limited, with the SNP in particular holding back major announcements until the short campaign begins. Labour has proposed increasing NHS staffing, boosting apprenticeships and investing in rail and housing, though it has provided little detail on how these measures would be funded. The party has also committed to maintaining free university tuition and Scotland’s more generous devolved social security policies.
Reform has made the clearest pledge on taxation, proposing to reduce income tax by 3p over the course of the parliament. However, it has not outlined credible spending reductions to fund the proposal and has faced criticism that the tax cut would disproportionately benefit higher earners.
There is a greater level of policy development in Wales, with Plaid Cymru publishing a 100-day plan and making a central pledge to expand free childcare. Labour has set out five pledges covering cost of living, jobs, the NHS, the environment and various social policy outcomes (homelessness, fair pay, schools), while Reform and the Conservatives have focused more heavily on issues such as immigration, crime and public service performance, with fewer detailed proposals on fiscal policy or public spending.
Notwithstanding that SNP and Plaid Cymru governments are the most likely outcomes, questions about devolution rather than independence arguments are most likely to dominate the constitutional debate in the next parliamentary term. The SNP maintains that a majority of seats at Holyrood would be a mandate for a referendum on independence. While an SNP majority is not inconceivable, it would exceed current expectations. More likely, debate will focus on perceived problems with the devolution settlement, UK Government conduct in Scotland and securing the legal route to a future referendum.
In Wales, Plaid Cymru has been equally clear that independence would not be a central priority during its first term in government. Instead, the emphasis would be on delivery and building trust with voters. Short of advancing the independence debate directly, calls for fairer and stronger devolution are likely to be a consistent theme of a Plaid-led government and a wedge issue with Labour and Reform. Rail, the Crown Estate, HS2 funding and the financial settlement generally will be target areas for devolution.
If both the SNP and Plaid form governments, they have indicated they would work closely together to challenge the UK government’s approach to Scotland and Wales; for example, the powers of the Internal Market Act, inter-governmental structures, and the actions of the UK Government in devolved areas. The two may also cooperate with Northern Ireland’s First Minister Michelle O’Neill where interests align. For the UK Labour government – already facing pressure from Reform and the Greens in England – a coordinated challenge from left-of-centre pro-independence governments would add another layer to an increasingly complex UK political landscape.
Although an outright majority cannot be ruled out in either Scotland or Wales, majority governments are rare in devolved UK politics. Coalition administrations or minority governments supported by confidence-and-supply arrangements are the most likely outcome. These arrangements require governments to secure parliamentary support on a case-by-case basis and negotiate extensively at budget time, giving smaller parties and external stakeholders opportunities to influence both tax and spending policies.
In Wales, there is already evidence of a broad anti-Reform alignment. Labour, Liberal Democrat and Green politicians are likely to vote in a way that ensures Plaid Cymru leader Rhun ap Iorwerth becomes First Minister ahead of a Reform or Reform-Conservative candidate. Polling suggests that the centre-left as a whole is likely to win significantly more seats than the two right-wing parties combined.
Negotiations in Scotland may prove more complex. The most likely arrangement remains an agreement between the SNP and the Greens to support a pro-independence, left-of-centre government. The SNP may also look to Labour and the Liberal Democrats on a case-by-case basis, as it has over the past year, to limit Green influence over economic policy.
A new SNP administration would also look different from the current government, with several senior figures – including the Deputy First Minister and the Finance Secretary – standing down.
If Labour or Reform were to close the polling gap with the SNP during the campaign, and secure a pro-union majority in the parliament, a pro-union governing arrangement could emerge. In that scenario, the relationship between Labour and Reform – and which party emerged as the larger – would be critical. Labour would undoubtedly expect Reform to support Anas Sarwar as First Minister to block the SNP. It is far less clear that Labour would reciprocate if Reform were the largest pro-union party – a situation that could push the SNP and Labour to cross constitutional lines in order to deliver a stable government.
In both Scotland and Wales, regardless of who forms each government, there will be significant turnover in ministerial personnel and parliamentarians. Changes to the voting system in Wales and the retirement of several senior figures in Scotland will bring a new generation of politicians into office.
With the exception of a continued SNP government, most parties have limited recent experience of governing. It may take time for a new administration to become fully effective, adapt to working with the civil service and begin taking major decisions. In both countries, parties will also be conscious of the UK Labour government’s difficult first hundred days and will be keen to demonstrate control and competence.
For businesses and investors operating across the UK, the elections are therefore less likely to produce immediate constitutional change than to shape the policy priorities and governing dynamics in Scotland and Wales over the coming parliamentary term. Fragmented parliaments and new Governments are likely to place a premium on negotiation, coalition-building and external engagement. Businesses with interests in devolved policy – particularly in economic development, planning, infrastructure and public services – will need to understand the priorities of new ministers and the evolving political dynamics within the devolved institutions.
Flint can support organisations in navigating the political and policy changes resulting from the Scottish and Welsh elections in May. To discuss your particular position with our sector and policy specialists, contact us here.
Authors: Liz Lloyd, Siôn Simon, Philip Wilson