Autumn Budget preparations

ICAEW CEO, Alan Vallance, sent a letter to the Chancellor, Rachel Reeves, summarising the Institute’s submission ahead of the Budget on 30 October. The letter expressed our support for the government’s primary objective of growth, set out ICAEW’s conviction that fiscal policy should be based on a long-term strategy, and welcomed the government’s commitment to publish a business tax roadmap that will support long-term growth. 

Vallance also reaffirmed the need to redesign the UK’s fiscal rules and change the current “flawed” measure of underlying debt that excludes quantitative easing liabilities, writing that such a move in the Budget would be the first step to support longer-term investment. He advised proceeding with caution so as not to undermine market confidence.

ICAEW and the Chartered Institute of Taxation (CIOT) have also called on the Chancellor to put extra resources into HM Revenue and Customs’ customer service in the Budget. This follows emerging findings of a study of tax agents’ contact with HMRC, during September and October 2024. Eighty-five percent of attempts to contact HMRC across a range of helplines and webchats got through to an adviser, which the Institutes said demonstrated that recent investment may have bolstered connection rates. 

However, the findings reveal that a quarter of issues raised through helplines and webchats go unresolved, while in 41% of cases, agents needed to contact HMRC again. The Institutes noted that the additional funds announced in May were a one-off and are therefore calling on the Chancellor to use next week’s Budget and spending review to further invest in this crucial area. The data is part of a larger exercise conducted by the two bodies, with the results due to be published later this year.

Industrial Strategy 

ICAEW has responded to the launch of the government’s green paper and Invest 2035: the UK’s modern industrial strategy: “The Institute welcomed the recognition of the professional and business services sector as one of the areas with the highest growth opportunity for the economy and business, as it is key to the building of a highly-skilled economy. ICAEW members advise three million businesses across the country and know how to boost productivity, take opportunities and create growth to build the tax base, increase employment and share prosperity. ICAEW believes that the government needs to take a long-term holistic view and ensure that its industrial strategy is integrated with plans for trade, tax, investment and skills, with aligned objectives and outcomes and a focus on regional hubs.” 

Iain Wright, ICAEW’s Managing Director for Reputation and Influence, hosted the Professional and Business Services Council (PBSC) at Chartered Accountants’ Hall in his newly appointed role as Industry Co-Chair of the PBSC. Gareth Thomas MP, Minister for Services, Small Businesses and Exports, was also present in his role as Ministerial Co-Chair. This was the first PBSC meeting with the new government, where mission-based economic policy, the investment summit and an industrial strategy were all on the agenda. ICAEW will also work closely with the Department for Business and Trade (DBT) on a sector deal. 

ICAEW in Parliament

Peers welcomed a briefing by ICAEW ahead of a short debate in the House of Lords on deficiencies of external auditing of companies. In the 14 October briefing, ICAEW recommended that the government establish in law a strong new statutory regulator – the Auditing, Reporting and Governance Authority (ARGA) – with funding, a clear function and a growth remit. DBT officials have indicated that the formal pre-legislative scrutiny period will start early in 2025, although ICAEW will be continuing discussions with ministers in advance of that. A draft bill is anticipated by Easter next year, with final legislation due to be tabled in Parliament by late 2025/early 2026.

The results of ICAEW’s latest Business Confidence Monitor (BCM), relating to Q3 2024, were also mentioned in a Westminster Hall debate on business confidence by ICAEW member and Shadow Minister for Science, Innovation and Technology Saqib Bhatti MP and Shadow Minister for Women and Equalities Mims Davies MP. Although the BCM shows a slight drop in sentiment, confidence remains high as businesses continue to expect sales and profits growth to improve significantly in the year ahead.

Engagement with the Opposition

After attending the Liberal Democrat and Labour Party Annual Conferences in September, Iain Wright and Senior Policy and Public Affairs Executive Tom Leemanor Policy took the opportunity to engage with shadow ministers at October’s Conservative Party Conference in Birmingham. 

Wright attended the Business Day sessions, which included in-conversation events with Shadow Chancellor Jeremy Hunt and Shadow Secretary of State for Science, Innovation and Technology Andrew Griffith, as well as a range of policy round tables. ICAEW also co-sponsored an Enterprise Forum drinks reception at which Hunt and Shadow Secretary of State for Business and Trade Kevin Hollinrake were guest speakers. ICAEW maintains close contact with the official opposition and awaits the outcome of the Conservative Party leadership election, on 2 November. 

B20

The B20 Summit brings together business representatives from the G20 countries to discuss economic and business issues, setting the tone for future regulation and government action. ICAEW is a network partner to the B20 2024 Integrity and Compliance task force and ICAEW Policy Director John Boulton attended the recent summit in Brazil. The task force discussed sustainability reporting, ethics in AI and anti-corruption measures and has set out three key measures for the accountancy profession as we head into 2025. The task force policy paper outlines three critical areas for the profession:

1. Good governance for sustainability
2. Technical assistance and guidance for SMEs
3. Emphasis on mindset and ethical leadership

The B20 Summit will conclude in a communique to the G20 meeting in November. It remains to be seen which of its recommendations are carried forward into inter-governmental commitments. Behind this formal cooperation, the relationships and partnerships built during the summit provide new opportunities for sharing information and best practice, which ICAEW is participating in.