Outreach to the new government

Following the general election on 4 July, ICAEW congratulated the new government and committed to working with it to help it deliver its manifesto promise to unlock stronger economic growth. ICAEW called on the government to provide the stability and continuity businesses need so that they can plan, invest and grow. This sentiment was echoed in the latest Business Confidence Monitor results, which found that business confidence is the highest it has been for two years, but that costs continue to grow, meaning planning ahead is essential.

The mission-led Labour government has pledged economic stability, with economic growth central to delivering its agenda, given its commitments not to raise mainstream taxes or increase borrowing.

Letters have been sent to key Ministers relevant to ICAEW’s work, including Rachel Reeves (Chancellor), Jonathan Reynolds (Secretary of State for Business and Trade), Justin Madders (Department for Business and Trade (DBT), Minister responsible for audit reform), Gareth Thomas (DBT Minister for Small Businesses and professional business services), James Murray (Exchequer Secretary to the Treasury responsible for taxation), Tulip Siddiq (Economic Secretary to the Treasury), Peter Kyle (Secretary of State for Science Innovation and Technology) and Dan Jarvis (Home Office Minister responsible for economic crime).

In total, 335 of the 650 MPs elected are first timers so there will be lots of opportunities to inform and influence. ICAEW will be sharing targeted briefings with new parliamentarians to raise awareness of the Institute and the value of the profession to the economy.

Specific areas of influence

Ahead of the King’s speech, ICAEW actively engaged with the incoming government, outlining the need for movement on audit reform, mutual recognition of qualifications and business taxation. ICAEW has also urged the new government to address the local audit crisis and corporate governance reform.

The week after the election, ICAEW’s Managing Director, Reputation and Influence, Iain Wright was one of several business representatives invited by the new Secretary of State for Business and Trade to take part in a wide-ranging discussion. It covered potential areas of focus for a new industrial strategy, how to support small businesses through enhanced access to capital and championing British trade and exports (with an emphasis on mutual recognition of professional qualifications and delivering a new deal for working people). Iain also joined ICAEW’s post-election podcast, which explored ‘How to get Britain growing’.

ICAEW Chief Executive Alan Vallance hosted Ceri Smith, Director General for Strategy and Investment in the Department for Business and Trade, at Chartered Accountants’ Hall. The Department had requested the meeting to reveal ICAEW’s perspective on how to increase foreign direct investment into the UK and to consider the challenges faced by UK-based high-growth businesses.

ICAEW has responded to the Chancellor’s national wealth fund announcement, welcoming the intention to support investment in new and growing green industries and improve competitiveness, but cautioning that the government should focus on infrastructure and energy production and not crowd out private investment.

ICAEW’s Director of Public Sector and Taxation, Alison Ring OBE FCA, attended an invitation-only round table with the Exchequer Secretary to the Treasury to discuss tax priorities, including HMRC service standards, R&D tax reliefs and the planned business tax roadmap.

New Bills welcomed

The inclusion of audit and corporate governance reform legislation in the King’s Speech has been welcomed by ICAEW and follows a long campaign by the sector. Reliable, trusted reporting by companies is fundamental to investor confidence which, in turn, is key to economic growth and stability. This long-awaited reform will not only reduce the risk of disorderly business failure, but will contribute to the transition to net zero.

Establishing the new statutory regulator – the Audit, Reporting and Governance Authority – and providing it with powers to take effective enforcement action against directors of UK public interest entities, is a crucial part of these reforms. The draft Bill will be subject to pre-legislative scrutiny. This process may take up to a year, with the Bill expected in Parliament in late 2025/early 2026. ICAEW will work closely with members and partners to review the proposals.

Also included among the 39 Bills outlined in the speech were measures to improve pensions, strengthen data protection and encourage smarter use of data; regulation to protect UK businesses and supply chains from cyber crime; more resources for skills and apprenticeships; and changes to workers’ rights. It is clear to see the influence of ICAEW’s manifesto when reviewing the King Speech and Labour Party manifesto.

Looking ahead to the Budget

The Chancellor has announced the date of the Budget as 30 October, and ICAEW’s Tax Faculty has previewed the measures that might be included. ICAEW is urging the government to use its first Budget to commit to radical simplification across all areas of the tax system. The planned publication of a roadmap for business taxation is welcome, but robust consultation and engagement will be crucial for the roadmap to be effective.

The Budget may also include an update on the government’s plans for business rates following a manifesto commitment to “scrap” the current system. ICAEW has prepared a briefing for officials calling for improved use of data and technology to streamline business rates and reduce the administrative burden for businesses.

Other Labour manifesto commitments that the government is yet to progress include the establishment of a Regulatory Innovation Office and steps to tackle late payments. More detailed plans on the government’s industrial and trade strategy are expected in the autumn, as well as a more detailed strategy on AI.