Preparing for the general election

While the pre-election period has restricted ICAEW’s usual interactions with government officials, focus has turned to the general election and priorities for the next government. As the political parties published their own manifestos, ICAEW teams shared our recommendations with candidates and the media.

Many of the accounting profession’s priorities have been reflected in the Conservative, Labour and Liberal Democrat manifestos, including a commitment to tackle late payments, boost R&D investment and improve SME access to finance. However, the lack of a commitment to audit and corporate governance reform in each manifesto is of particular concern. You can read a full analysis of how the manifestos align with ICAEW’s manifesto, as well as the Tax Faculty’s summary of the key tax policies from the main parties’ general election 2024 manifestos. Meanwhile, Insights Chart of the Week has also provided a breakdown of the costings of each of the major parties’ manifesto policies.

ICAEW co-hosted a debate on 17 June digging into exactly how the three main political parties plan to make life more prosperous for UK SMEs. Held at Chartered Accountants’ Hall, with support from Enterprise Nation and the Federation of Small Businesses, attendees were able to put their questions to candidates from the three main parties. Minister of State in the Department for Business and Trade Kevin Hollinrake said two exciting points in the Tories’ 10-point plan for business are open finance and regional mutual banks, which he said would “revolutionise the journey for SMEs”, in terms of their ability to access funds.

Shadow Secretary of State for Business and Trade Jonathan Reynolds argued that the key to better business support is a greater focus on devolution at the mayoral level, focusing on tailoring business support to local economic conditions.

Meanwhile, Liberal Democrat Business Spokesperson Sarah Olney said that the party would revert to the Local Enterprise Partnership model as part of its broader industrial strategy, with relevant funding to come from its proposed £8.4bn Green Investment Programme.

Across the hour-long event, the candidates debated access to finance, late payments, taxation and the wider macroeconomic situation affecting small businesses.

• Read more on the debate.
• Watch a recording.

Improving productivity and securing key skills

Aligned with ICAEW’s recommendation to make it easier to start, run and grow a business, ICAEW’s Policy Team joined a panel hosted by Enterprise Nation on 19 June, discussing the impact of small business support in driving productivity gains. Alongside representatives from Be the Business and the Federation of Small Businesses, we highlighted issues relating to business banking and late payments and flagged the importance of upskilling and artificial intelligence (AI). 

On AI skills, following pressure by ICAEW and others, the Department for Business, Innovation and Skills has extended the application deadline for its AI upskilling fund scheme to 18 August. The scheme offers grants of up to £10,000 to cover 50% of staff training costs. Find out more about how to apply and the ICAEW courses that could help your team.

Promoting innovation

Collaboration is essential as we look to harness the power of AI and digital technology for the profession. ICAEW’s Head of Technology Policy Esther Mallowah presented on the use of AI in corporate reporting and audit, as well as highlights of the EU AI Act, at a World Bank Conference this month. 

The event allowed ICAEW to share knowledge and experience from the UK with attendees from eight countries, including representatives from ministries in charge of accounting and audit legislation. Separately, ICAEW also met the Lord Mayor Michael Mainelli at Mansion House for a far-ranging chat covering AI, digital assets and ESG, and areas of collaboration with ICAEW. 

Building trust and strengthening governance

ICAEW’s manifesto notes that enhancing trust and accountability for corporate governance, reporting and audit is critical to the UK’s resilience. This month ICAEW held a roundtable on regulation, with the aim of identifying where research can help identify and provide solutions to potential challenges associated with therecent reforms to growth duty requirements.

Meanwhile, ICAEW has also responded to HMRC’s consultation on raising standards in the tax advice market. ICAEW said the chosen approach must:

• raise technical and ethical standards among tax practitioners;
• protect consumers from incompetent or unscrupulous practitioners; and
• not increase costs to the extent that taxpayers cannot afford professional advice. 

While ICAEW had concerns with all of the approaches suggested in the consultation, our preference is for mandatory membership of a professional body, but only if such an approach was appropriately designed and scoped. 

This month, ICAEW has also hit back at claims of declining audit quality following a report on the need for regulatory reform to curb corporate failures. ICAEW highlighted FRC’s inspection reports that had found an increase in good audits since 2018, but agreed that more was needed to reform audit and corporate governance, including a statutory regulator and greater director accountability. ICAEW will continue to call on the next government to bring forward the necessary primary legislation as a priority. ICAEW will also be calling for legislation introducing a backstop date in September to clear the backlog in local audit.

Trade and the UK’s relationship with Europe

On 13 June, ICAEW President Malcolm Bacchus, supported by the Policy Team, participated at Accountancy Europe’s AGM in Brussels. The main themes of the General Assembly were the impact of the EU elections, the status of CSRD transposition, ESG governance and SMEs sustainability. 

Bacchus had the opportunity to discuss future global collaborative efforts on sustainability with the President of Accountancy Europe and CEO of IFAC. He also met the Deputy Ambassador of the UK’s Mission to the EU, raising the importance of revamping discussions on mutual recognition of professional qualifications with the EU as a key priority for the accounting profession.