By the time you read this, I’ll have just been at the Labour Party Conference in Liverpool listening to conversations and debates covering the economy, the upcoming Budget and the new government’s plans to deliver on its mission. Westminster returned for just two weeks in September before taking a three-week recess for conference season, but it was still a hugely busy month – for us at ICAS, as well as for the Scottish and Westminster parliamentarians. 

The month opened with First Minister (FM), John Swinney, delivering his programme for government, hot on the heels of a statement from the Finance Secretary, Shona Robison. Robison announced that around £500m of public sector cuts would be needed to balance the books, and that the government would have to use up to £460m raised in an auction of seabed plots for offshore projects – cash previously earmarked to tackle the climate crisis – to pay for the public sector pay rises promised before the summer. Meaning Swinney’s first programme as FM was made against a backdrop of cuts, at the same time as he promised to deliver better public services and reduce child poverty. Not an easy task in anyone’s books.

ICAS’ statement on the programme was picked up in various news outlets, including the Times. You can read it here.   

We also submitted our thoughts to the Treasury in the run-up to Rachel Reeves’ first Budget, on 30 October. We have called for a strategic road map for tax, setting out a clear vision, with likely timescales, of what the new government wants to achieve from the tax system. This should provide clarity and predictability around allowances, and business and corporation tax rates, to help businesses make informed investment decisions and plan their cashflows at a time of economic uncertainty. Tax policy needs to be strategic, long term and joined up, and administrative systems must work better, to avoid adding to confusion and complexity.

“Tax policy needs to be strategic, long term and joined up, and administrative systems must work better, to avoid adding to confusion and complexity”

We are also calling for a tax system that encourages business practices that will help achieve environmental goals, rather than work against them. For example, the current system can disincentivise retrofitting of existing buildings, even though from an environmental perspective refurbishment is often preferable to demolishing and building something new in its place.

Finally, we call again for more resources for HMRC to improve its service levels and make the move to a fully digitally transformed organisation. HMRC needs to provide an effective support and guidance service to all businesses, large and small. You can read our full submission here.

We made these points in person at roundtable events with the Exchequer Secretary to the Treasury (XST), James Murray, in London in July and again in Darlington in September. ICAS also gave evidence to the Scottish Parliament’s Finance and Public Administration Committee in September, following submission of our evidence to Managing Scotland’s Public Finances. In both cases, we highlighted the need for longer-term budget planning, a holistic approach to revenue generation and cost reduction and, where there are limited resources, significant trade-offs may need to be made, some of which may impact public services over many years.

We have also submitted evidence to the Scottish charity regulator, and participated in a government roundtable, on the case for raising the charity audit. And we hosted two events in September with the FRC on the latest periodic review of UK and Ireland accounting standards, reaching 170 of our members and enjoying good dialogue with officials.

The run-up to the budget will see us reiterating our case for a strategic tax road map. We’ll provide our immediate reaction to the Chancellor’s first major fiscal event in next month’s magazine.