In his letter to the chancellor ahead of the Spring Budget on 8 March, ICAEW chief executive Michael Izza says that the occasion is “an historic opportunity to put productivity growth at the heart of policy-making to ensure long-term prosperity beyond Brexit”.
He points out that businesses which export are more productive yet, despite government’s best efforts, “in many cases exporting remains beyond the reach or even awareness of most businesses”.
“For many new or prospective exporters, exploring overseas opportunities is costly and fraught with risks.
“Exporting requires capital upfront for expanded production, advice and research into new markets – these are substantial costs that businesses may not recoup in the short term and can act as a deterrent.”
One way of mitigating the risk would be to introduce an export voucher for small business which would provide an incentive to export and reduce the upfront costs.
The voucher would work in the same way that Growth Vouchers did so successfully, offering businesses a small subsidy to help them through the initial stages of the exporting process.
Izza also urges the chancellor to reconsider the timetable for all the regulations that are currently being implemented. He warns that the cumulative effect of the Apprenticeship Levy, the Making Tax Digital project and the duty to report payment practices, together with the uncertainty of Brexit, could well act to hold business back.
“Concerns over the time commitment required from a growing compliance list, or the confusion caused by the sheer churn in new regulation, all create an environment which does not incentivise the kinds of productivity-enhancing investment the government wants business to carry out.”
He suggests that the changes should be implemented over a period of at least 10 years, if not longer; the government should also channel more resources to the Regulatory Policy Committee so that it can better measure the impact of new regulations and provide more comprehensive advice on the timing of their implementation.