Recognised as a bellwether of the real economy by senior figures such as the FCA’s CEO, corporate treasurers have set out their manifesto for a new government as the UK goes to the polls on 4 July.
Highlighting five key areas for action – funding, investment, resources, sustainability and technology – the ACT's policy and technical team, Naresh Aggarwal, Sarah Boyce and James Winterton, believe the plan for the new administration will enhance the UK’s position as an attractive place for corporates to do business.
Annette Spencer, chief executive of the ACT, said: “Treasurers want the next government to focus on clarity and predictability to give confidence for financial markets and investment; and a strategic and positive focus on skills development, especially in financial risk management and relevant technology skills. We have set out a summary of the key policy and economic areas which corporate treasurers tell us are the most important to support growth, productivity and success for UK business – a manifesto for the real economy.”
Only the very largest organisations have straightforward access to capital, driven in part by their ability to access international markets. For the UK to thrive, access to capital must be readily available to all.
The ACT asks that the next government:
actively supports market initiatives to enable the market to access diverse sources of capital (e.g. through simplification of the disclosure requirements to encourage low denomination bonds to be offered more widely)
expands the role of a government-backed bank or development fund to catalyse support for areas such as SME access to finance, scale up capital and blended finance
ensures that the UK listings rules attract and retain businesses, as well as their associated corporate treasury activities that help provide liquidity to UK financial markets
facilitates responsible use of working capital by mandating payment to agreed contract terms by all organisations
resolves market impediments such as customer redress and commerciality to enable the turbo-charging of the next stage of Open Banking that will encourage markets to innovate and provide more cost-effective financing, especially for SMEs.
Uncertainty leads to a lack of confidence and a reluctance to invest. Without investment, UK plc will fall behind its peers. Fundamentally, a thriving economy is built upon confidence and a willingness by new and existing businesses to invest.
To achieve this, corporates require:
stability: certainty and longer-term predictability of the fiscal and regulatory environment
tax rules that do not put the UK at a competitive disadvantage
proportionality and consistency at the heart of regulatory developments
simplification of key regulations and governance rules to reduce the burden – especially for SMEs
global alignment in regulations unless there is a clear case for difference.
Corporates require access to a deep pool of talent; workforces need upskilling to address particular skills gaps that have been identified by ACT members – these gaps include financial literacy, financial risk management and technology skills. Furthermore, this access to talent needs to be disseminated across the whole ecosystem to future-proof the UK economy, especially addressing skills gaps in smaller organisations (who typically form the supply chains of larger businesses).
The ACT asks that the next government:
supports access to professional qualifications to upskill current and future business leaders in financial risk management, by offering compelling subsidies for training
provides educational opportunities to enable SMEs to engage with technological developments
redesigns the immigration visa system to enable suitably skilled workers in areas such as green finance and treasury risk management to join the UK workforce more easily.
Transition towards a ‘net zero’ world is generally accepted as desirable. However, there is considerable confusion over how to achieve this and current efforts are proving counterproductive as reputational risk (e.g. perceptions of ‘greenwashing’) is hindering action. The government must take a leading role to ensure the provision of clear, uncomplicated pathways to achieving the objective.
To do so, the ACT asks that the next government:
accelerates the creation of a UK taxonomy to support business planning and transition [while maintaining stability and certainty as outlined in point 2]
leads work to improve the use of natural capital by large and smaller business as that will encourage investment in biodiversity and better stewardship of the UK’s natural resources
Technology is advancing at a rate that is difficult for many corporates to keep pace with. However, effective innovation and deployment of technology offers a competitive advantage and as such must be a priority.
The ACT asks that the government:
supports the market’s developments in the use of technology, through proportionate regulation and provision of resources such as sand boxes where appropriate
promotes the use of digital trade legislation to enable businesses to reduce the costs of trade
facilitates access to technology for SMEs in areas such as AI and cybersecurity
encourages the digitalisation of financial markets where it is appropriate and beneficial (e.g. share registers)
encourages the development of a single reporting access point to reduce the burden on businesses (especially SMEs) on a wide range of government and regulatory reporting (much of which is duplicated).
Download a copy of the ACT manifesto
Philip Smith is editor of The Treasurer
