In advance of UK Chancellor of the Exchequer Rishi Sunak’s likely announcement on Wednesday of plans to restore the country’s economy, CIMA last week published a 20-point plan for recovery.
The document — CIMA Policy Suggestions for UK Economic Recovery — was sent to UK Prime Minister Boris Johnson and is centred on four critical areas to aid post-coronavirus economic revival:
- Providing businesses and consumers with the confidence to invest;
- Reducing uncertainty for businesses;
- Creating a more sustainable business environment; and
- Investing in skills to help generate economic growth and improve productivity.
Andrew Harding, FCMA, CGMA, chief executive–Management Accounting at the Association of International Certified Professional Accountants, said that in addition to tackling immediate issues such as restoring jobs and increasing consumer spending, the UK government “must also ensure that its recovery strategy encompasses long-term priorities”.
These include, Harding said, tackling the UK’s faltering productivity, widening skills gap, and failing social mobility “to deliver a truly inclusive, lasting economic recovery and propel our resilience to the next level”. He added: “This will be the uphill battle of the UK’s post-lockdown world.”
To provide business and consumer confidence, CIMA suggests that a temporary lowering of the VAT rate would encourage spending in the short term. Cutting employers’ National Insurance contributions would aid employment levels, CIMA argues.
An earlier government Growth Accelerator scheme for SMEs produced substantial return on investment, and a similar scheme should be introduced again, the plan said.
To reduce economic uncertainty, the document also recommends that the government outline its tax plans at least two years ahead, pause its plans for increased business regulation, and offer support to businesses to diversify their supply chains. In addition, the recommendations call for free movement of professionals as well as mutual recognition of professional qualifications in the UK’s future trade deals.
The plan advocates for encouragement of Integrated Reporting (IR) adoption by UK businesses. “Moves to integrated reporting would not only better help regulators and the move to net zero [carbon emissions by 2050], but we believe it would mean that UK businesses would have a more financially secure longer-term future and the potential for more investment,” the document said.
CIMA also calls for investment in green infrastructure, including for electric vehicle charging.
On skills, CIMA argues that the UK’s Apprenticeship Levy — a tax on employers used to fund apprenticeships — should be developed into an “Apprenticeship and Skills Levy”, so that as well as supporting apprenticeships, employers could also spend it on “recognised continuing professional development for reskilling of the current workforce”.
Spending on higher-level apprenticeships should be increased — as a route to enhancing the UK’s productivity and skills, according to CIMA.
The document said: “The higher-level apprenticeships are also a route to increasing social mobility and act as another access point to higher-level education for many students from diverse backgrounds.”
CIMA also suggested a “rebuttable right to retrain”, which would make it easier for employees to broach the conversation of training with their employer. “It resets the question by making the default position to be the approval of extra training and skills development,” the document said. It is rebuttable in cases where the employee is urgently needed for a core business need.
The creation and investment in skills clusters should be considered by the government to build on those already existing, such as the nuclear power and submarine sector in Barrow/wider Cumbria in the north-west of the UK and financial services and the professions in London.
Read the 20 recommendations in full.
— Oliver Rowe (Oliver.Rowe@aicpa-cima.com) is an FM magazine senior editor.