Audit and corporate governance reform must be one of the new Labour government’s priorities in its first 100 days, alongside work to clear the audit backlog and business rates reform.

That is the message that ICAEW is sending the new government as it looks towards its first steps. Alongside longer-term goals such as building the sustainable finance market and developing an industrial strategy, these actions will help to boost both the economy and investor confidence.

The new government should commit to audit and corporate governance reform as a priority, including establishing ARGA as a new statutory regulator and giving it powers to take effective enforcement action against directors of UK public interest entities. Taking early action in this area will reduce the risk of unexpected business failure and deliver on existing commitments to reinforce the UK as a trusted destination for investment.

In tandem, the new government must urgently bring forward legislation to set the backstop date for outstanding audited accounts, breaking the local audit backlog. Three-quarters of councils in England are at least a year behind in publishing their financial statements, and backstop legislation will ensure that auditors and councils can stick to the agreed plan, which is essential for accountability, transparency, governance and assurance.

The new government has an opportunity to boost investment by following through on its plans to reform business rates. It could harness data and technology to update and improve the system as a starting point, to ensure it is efficient and no longer disincentivises productive business activity.

In the longer term, the new government has great potential to establish the UK as the green finance capital of the world, as promised in the Labour manifesto. This includes commitments to endorse International Sustainability Standards Board (ISSB) reporting standards and introduce a green taxonomy. The business community must work with the government to restore and protect the natural world and tackle greenwashing.

Labour should also set out a timeline to deliver the industrial strategy it has promised, which will provide a new basis for cooperation between the public and private sectors, unlocking growth potential. In particular, ICAEW says that it should include a clear plan for supporting SMEs, which are the lifeblood of the UK economy. Action to tackle late payments is a good place to start, as identified in Labour’s manifesto.

“It’s the right time for audit and corporate governance reform to be prioritised,” says John Boulton, ICAEW Director of Policy. “Reliable, trusted reporting by companies is not ancillary to economic stability, but fundamental. By legislating for the creation of the new regulator and equipping it with statutory powers to take action against company directors, the government will ensure the UK remains a trusted location for investment and will reduce the risk that a major institution fails unexpectedly.

He stresses ICAEW’s hopes that the government will move rapidly to establish the UK as the green finance capital of the world. “There’s great potential to build on the country’s strengths in this area, and an early commitment to endorsing the ISSB’s standards would be a strong starting point. Additionally, we think a comprehensive review of the business rates system could help unlock economic growth and invigorate our high streets.

“We look forward to working with the new government to help them deliver on their manifesto promise to unlock stronger economic growth.”