ICAEW joins industry leaders urging Bank of England to get tough on climate change

The Bank of England's incoming Governor has been urged to 'get tough' on climate change by over 100 industry leaders, including the Institute of Chartered Accountants in England and Wales (ICAEW).

by HLB McGuire + Farry

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The letter, which was signed by ICAEW Chief Executive Michael Izza, urged new Bank of England Governor Andrew Bailey to ‘take a lead and make it mandatory for firms to disclose climate risk promptly’. Fossil fuel assets should be excluded from any future tranches of quantitative easing and the assets the bank accepts as collateral, the letter added.

Among the 101 signatories are former government Chief Scientific Adviser Sir David King, former Bank of England Monetary Policy Committee (MPC) member Willem Buiter and conservationist Jane Goodall.

The letter said: ‘To mitigate the worst effects of the crisis and meet the goals of the Paris Agreement, the transition to a zero-carbon economy must be urgently accelerated. Governments bear the primary responsibility for driving this shift, via regulation, taxes, subsidies and public investment.

‘Banks and insurers and the financial system as a whole face catastrophic consequences if they fail to adapt. If warming is left unchecked, extreme weather events will cause devastating losses.’

 

 

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Business groups urge Chancellor to take ‘strategic approach’ to tax policy

Ahead of the 2020 Budget, the Institute for Fiscal Studies (IFS), the Chartered Institute of Taxation (CIOT) and the Institute for Government (IfG) have urged Chancellor Rishi Sunak to take a new approach to making tax policy.

by HLB McGuire + Farry

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The business groups have written a letter to the Chancellor, stating that the UK needs a tax system ‘formed through a considered strategy which reduces the burdens of compliance on business and can become a source of competitive advantage for the UK’.

In the letter, the groups asked Mr Sunak to maintain the government’s commitment to holding a single annual fiscal event, in order to ‘reduce the frequency of changes of direction’ in regard to taxes; take a strategic approach to making tax policy; and to extend the road-map approach to tax policy making.

The business groups have also called on the Chancellor to prioritise ‘full, open and early consultation’ on tax reforms. They stated that too many consultations begin when key decisions have already been made.

Tax reliefs and measures should be subject to more systematic evaluation, the groups said in the letter. They recommend that the government review whether tax measures are ‘achieving their objectives at acceptable cost’.

The letter can be read in full here.

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Coronavirus ‘gravest threat to global economy since financial crisis’, says OECD

The Organisation for Economic Co-operation and Development (OECD) has warned that the coronavirus represents the 'gravest threat' to the global economy since the 2008 financial crisis.

by HLB McGuire + Farry

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The OECD has called on governments around the world to act immediately in order to limit the spread of the virus and protect people and businesses from its effects.

Supply chains and commodities are likely to be affected as a result of the spread of the coronavirus, said the OECD. Global economic growth could fall to 2.4% in 2020, compared to the weak reading of 2.9% recorded in 2019.

The Organisation recommends that businesses allow employees to work flexibly in order to ensure they stay healthy. It also recommended that governments implement temporary tax and budgetary measures to ‘cushion the impact in sectors most affected’, such as travel and tourism and the automobile industry.

Commenting on the issue, Laurence Boone, Chief Economist at the OECD, said: ‘The virus risks giving a further blow to a global economy that was already weakened by trade and political tensions.

‘Governments need to act immediately to contain the epidemic, support the healthcare system, protect people, shore up demand and provide a financial lifeline to households and businesses that are most affected.’

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