Jonathan Riley 17 May 2017 03:45pm

Election 2017: manifesto for a vibrant economy

The upcoming general election is a critical milestone in the UK’s journey towards life outside the EU and provides us with an opportunity to shape our country going forward

Caption: Jonathan Riley on the three economic priorities for a new government.

Government policy will be key to unlocking the UK’s potential and creating a vibrant and prosperous economy for all.

Over the last 18 months, Grant Thornton has been exploring how to shape a vibrant economy in the UK. Bringing together communities around the country, and involving people from the public, private and not-for-profit sectors we have been sharing views of what is already working, hopes for the future and how we can collectively make these a reality. We have used these conversations and insights to develop a draft manifesto of policy recommendations for the new government.

The overarching theme that these ongoing discussions have so far uncovered is the need for a guiding vision for the UK in this changing world.

Within the draft manifesto there are three core areas of priority: building trust and integrity in markets; unlocking sustainable growth at home and abroad and creating environments where people and businesses flourish.

As head of tax, one of my passions is working with government ministers, opposition parties and Whitehall to ensure that the voices of our clients and stakeholders are heard, particularly regarding their growth potential. Central to this is the need to develop a tax framework that reflects the modern economy.

The UK tax code has grown from 3,700 pages in 1995 to 17,000 pages in 2015. The tax system is increasingly out of kilter with today’s economy: it has not adapted to changes in employment status and corporation tax no longer works in global, digital economies.

This complex, archaic system makes it hard for people to know how to do the right thing. It also makes it and easier for aggressive and artificial tax avoidance schemes - which undermine trust in business - to operate.

In our manifesto we outline a need to focus on simplification of tax to enable business to pay the right amount at the right time. From the discussions we have been having with communities, we have highlighted three core recommendations to support this.

Firstly, government should hold a fundamental debate about our business tax system – to agree a new consensus on what assets or activities should be taxed (i.e. property, job, profit or sales). Next, apply the approaches taken by successive governments on deregulation to radically simplify tax administration. Finally, conduct a fundamental review of business tax reliefs, to significantly reduce the number and complexity of different schemes and to target tax incentives on an agreed set of strategic priorities.

Trust and integrity are at the heart of a vibrant economy. Trust provides the basis for adoption of innovative products and services, higher productivity, investment and license to operate. The collapse of trust in business and other institutions is a global one; according to the Edelman Trust Barometer 2017 only 33% of people trust business.

With this in mind, another aim outlined in the manifesto to encourage trust in markets is the need for effective corporate governance through culture and leadership rather than additional tick-box regulation.

Good, effective corporate governance provides the basis for both external trust in business and the internal processes for managing risk and protecting and enhancing value. Our analysis of FTSE 350 compliance with the UK Corporate Governance Code - over many years within our annual Corporate Governance Review - suggests that rather than additional rules, the challenge is for more companies to embrace the principles of the existing code.

During the election campaign, we want to extend the discussion even further, refining and building on these ideas ready to present to the new government. We value the thoughts of our local and regional private, public and third sector communities and want to hear their views and ideas.

Grant Thornton is proud to represent so many dynamic organisations and people. So many often struggle to have their issues and thoughts aired. This is another opportunity for us to let them to have their say.

You can read Grant Thornton’s draft manifesto (PDF) and submit comments by 31st May 2017. Join the conversation on Twitter using the hashtag #VibrantEconomy