Britain is facing a momentously critical General Election. Beyond this vote, there are unprecedented challenges and opportunities ahead in the short and long term.
Regardless of the outcome, several areas will demand clarity, close attention, and innovative solutions from our next government.
1. Brexit quandary
Economic confidence has fallen heavily in recent years. ACCA’s Global Economic Conditions Survey finds that Brexit uncertainty is impacting capital expenditure and holding back business investment.
Whitehall has been profoundly preoccupied with political upheaval since the 2016 vote, leading to fundamental policy decisions being delayed or not taken at all.
Brexit has dominated the bandwidth of policymakers — the country needs its decision makers to focus on the myriad other issues that affect people’s lives and livelihoods.
For centuries, the UK has been able to attract talent from across the globe, which has helped create a world-leading professional community.
The strength of the UK’s academic and professional education continues to contribute enormously to our global standing.
Looking at our migration system, the UK’s international students bring tremendous value, making an immense contribution to our society, our economy, and university campuses.
They help to make the UK a more attractive place to study, as well as opening up routes into the highly skilled roles that enrich local economies.
Any immigration policy post-Brexit should allow for greater talent flow and mobility. Without this, our economy will not be competing with other developed nations as we all seek to grow world-beating businesses.
As a global professional body, ACCA is committed to providing access to education, so that anyone with the ability has the opportunity to become a professional accountant, wherever they are from.
We welcomed the current government’s expansion of post-study work visas for talented international students to build successful careers in the UK. It’s an important step in the right direction, but more action is needed to realise the full benefits of international education.
It’s vital that students are able to gain the mandatory experience necessary to gain professional qualifications —which can take up to three years — and we call for more flexibility from the next government to allow this to happen.
2. Climate emergency
In November 2020, the UN’s COP26 conference comes to Glasgow, placing the UK centre stage in leading the global climate change conversation.
As an advanced economy, Britain has many of the advantages required to be at the heart of sustainable
development. More concerted action by UK business and society is needed to find solutions to social and environmental challenges.
For companies to create long-term, inclusive, environmentally sustainable value, they must partner with finance and accounting professionals. Achieving the objectives of the UN Sustainable Development Goals will require measurement to deliver management and concrete results. This is core to what professional accountants are trained to do.
Reporting on climate risk, assessing natural capital dependencies, building circular business models, more effective evaluating of social impacts, and implementing purpose-led strategies are five approaches identified by ACCA in a research report called Social and Environmental Value Creation.
Taken together, these activities will build ethical businesses that want to decouple themselves from degrading our environment — but they will need the skills of professional accountants to be a part of the solution.
3. Vocational education
The new government will also need to reassess technical and vocational education, with a focus on building soft skills that can improve student employability in the job market.
If these new routes are to be successful, the next government needs to carefully consider the engagement of employers in the industry placement component.
The “on-the-job” elements of such programmes must be structured with the long-term productivity, resourcing and financial benefits for the employer in mind.
Ensuring that the placements constitute a meaningful contribution to the employer’s business and operations will ensure that both students and employers are able to benefit from the experience.
4. Economic growth
Whoever is chancellor, the Treasury will play a critical role in creating an environment where business, the economy, and society as a whole can continue to thrive as the UK leaves the European Union.
Our financial services industry contains multinational household names in retail, corporate, and investment banking, but also a range of smaller SMEs focused on asset management and the emerging fintech sector.
Should the UK progress to the future relationship talks, these SMEs will want as minimal disruption as possible, and access to highly skilled global talent. Businesses can accommodate some change, but it’s difficult, if not impossible, to effectively plan when 2020 remains so opaque.
It’s welcome that public spending has begun to be loosened within the current fiscal rules. Given the economic uncertainties facing the country, it’s likely that government departments will see a budget increase of at least the current rate of inflation.
However, it’s imperative that fiscal prudence is maintained under the next government as we emerge from almost a decade of austerity to cut public deficits left after the global financial crisis. A prudent approach is needed if public sector debt is to remain on a downward trend as a percentage of GDP.
The next government should also use the country’s new-found fiscal flexibility to do four things.
First, it should ensure a long-term rebalancing of the tax system to help tackle climate change — by shifting the tax burden from labour to natural resource use, pollution, and
consumption. It should also make targeted, managed investments in infrastructure, which is a major employer and driver of economic growth.
The new administration must modernise the support made available for small businesses, including incentives to invest in productivity and promote international trade.
Finally, businesses should also be allowed to use R&D funds to invest in digitising business processes and cloud technologies.
Whoever ends up holding the reins of power, there’s a clear desire to urgently and decisively resolve the Brexit quandary, and finally take steps forward into a new future.
What is also clear is that fresh thinking is needed to develop a sound vision for trade, talent and technology that will deliver for the economy and future generations.
This forward progression is critical for the UK’s economic and social development, and is the very foundation on which our national wellbeing will be built.