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Next government must act to renew UK economy, says ICAEW

Author: ICAEW Insights

Published: 07 Feb 2024

ICAEW has outlined the actions needed to boost productivity and ensure the UK economy is resilient in future. ICAEW’s Manifesto calls for the revitalisation of support for start-ups, improved access to labour and a simplified, digital tax system.

Ahead of the general election expected this autumn, ICAEW has published a series of recommendations to improve the UK’s economic resilience which draw on the expertise and experience of its members.

The ICAEW Manifesto argues that the next government needs a plan of action to ensure the UK is the best place to start, run and grow a business. It also calls for strategies to ensure the UK can lead on sustainable technologies, embrace the opportunities offered by AI and ensure that the public sector is effectively administered.

“Entrepreneurs are the lifeblood of our economy, but members – who advise businesses from inception through to fruition – tell me it isn’t as easy as it once was,” says Iain Wright, ICAEW Managing Director, Reputation and Influence.

“This set of recommendations, grounded in the insight and experience of our members across the country, will help the next government and parliament take the actions necessary to boost the resilience and strength of the UK economy.”

Areas of focus

The ICAEW Manifesto outlines seven key areas in which it believes the next government must act, offering clear recommendations on what can be done, these are:

  • Productivity
  • Skills
  • Sustainability
  • Innovation
  • Resilience
  • Trust
  • Trade

ICAEW has created a 16-point plan to improve productivity in the UK, covering research and development (R&D) investment, tax, supporting new businesses and smarter regulation.

As, Sophie Parkhouse, FCA, Partner at Albert Goodman LLP says: “Regulation should have purpose and be proportionate. Enabling business and keeping it safe. It should not be a challenge or barrier to success.”

Alongside urging the government to provide greater clarity of changes to regulation through a roadmap, ICAEW is recommending government speeds up efforts to improve the administration involved in importing and exporting goods, and take action to address HMRC service standards.

To support new and growing businesses, ICAEW has reiterated its call for the reintroduction of growth vouchers and is also recommending the creation of business start-up passports to streamline HMRC registrations. It’s also calling for the government to commit to increase R&D spending beyond 3% of GDP.

“SMEs are the main power and innovation engines of the UK economy. A competitive tax system and investment in R&D and skills will support the entrepreneurs of the future,” says Qun Yang, FCA, COO and Co-founder of Biorbyt.

Upskilling and embracing technology

Action on productivity, must be coupled with ensuring UK organisations can access the skilled labour they need, says ICAEW.

The next government should publish an overarching skills strategy, offer more flexibility to businesses offering apprenticeships and extend childcare measures. A specific plan for skills in artificial intelligence and technology is also needed, it says.

ICAEW members like Aaron Thompson, ACA, Assistant Manager at BDO, believe that a resilient UK economy is one that can maximise the opportunities offered by embracing sustainability and technology.

“The next generation cannot be left facing the risk of climate change alone,” says Thompson. “For the UK to remain competitive it must be a leader in environmental action, and we must go further faster to ensure a brighter, greener future.”

ICAEW’s Manifesto urges the next government to position London as the world’s first net-zero, just and nature-positive financial centre and deliver a net-zero investment strategy within a transition plan for the whole economy.

At the same time, organisations need government support on digital technologies. ICAEW is recommending the creation of an AI governance framework and clear guidance on digital assets, including their valuation and audit.

Ensuring resilience and trust

To encourage investment the UK must ensure stakeholders’ trust. ICAEW believes that to do so the government must champion world-leading corporate governance, reporting and regulation and tackle economic crime.

It is calling for the next government to commit to exceeding OECD corporate governance minimum standards, provide funding for a statutory regulator within the next parliament and broaden reporting requirements for public interest entities.

To strengthen public finances, ICAEW is recommending the government is transparent about its long-term fiscal strategy and that all government departments are required to have a CFO. It’s also calling for action taken to strengthen audit, both of central and local authority spending.

Built on member insight

The ICAEW Manifesto has been created by listening to members working across all industries and sectors, and is already forming the basis of ICAEW’s communication with policymakers and thinktanks.

Mark Rhys, ICAEW President, says: “Our members are at the heart of running and advising millions of businesses, from the largest multinational companies in the world to the entrepreneurial ventures at the core of our community.

“I want to take this opportunity to thank these members for their valuable input and help in shaping these comprehensive recommendations, which we hope all political parties will consider as they shape their policies ahead of the general election.”

Share your insights

ICAEW wants to hear more from members on these recommendations and what actions you think the next government needs to take to ensure the resilience of the UK economy.

Read the full manifesto

See ICAEW's recommendations for the UK's next government in full, including actions to be taken and commitments to be made, that will ensure the resilience of the economy.

Manifesto 2024: ICAEW's vision for a renewed and resilient UK

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