Is business doing enough to reduce inequality?

With all eyes on the Chancellor’s budget yesterday, there was continued focus on inequality and what can be done to reduce it. With the living wage increasing by 4.4%, income inequality is predicted to be at its lowest for 30 years. As businesses, what more can we do to effectively lead the way in upholding equality? The living wage is one example, of businesses taking responsibility, realising the UN’s sustainable development goal of providing decent work. At ICAEW we’ve been thinking about this question and about that we might do to make a tangible difference.

 Audit quality forum: getting to the heart of the problem

 How can business reduce inequality? This was the challenge laid down a year ago by the Audit Quality Forum, as part of a series of events looking at what business needs to get right in order to increase confidence and trust. Trevor Philips, President of the Partnership Council of the John Lewis Partnership, recommends that businesses get to the heart of the issue by focusing on what the company is actually saying and doing.

 Tackling inequality by empowering workers

 Through the AQF event it became clear that there is a cross-over between our personal and professional values. As a professional body, we are in a strong position to reinforce this message to businesses.

 It also became apparent that the businesses that are the most successful and productive are those that share the decision-making, contributions and rewards across the organisation. There is no doubt that empowering workers increases productivity, as demonstrated by Apple and Google. And more companies could help tackle inequality by, for example, improving productivity to generate the growth necessary to raise wages and fund public services.

 UN Global Goals for sustainability

 According to the United Nations, inequality within countries has accelerated despite the fact that inequality between countries has actually decreased. How should business respond to provide decent work and economic growth? And what is the role for auditors who are in the privileged position of having unique insights into business? In order to reduce inequality, businesses should be paying attention to the needs of all workers – as outlined by Goal 10 of the UN Sustainable Development goals. Indeed, as our Audit Quality Forum debate concluded, this is just good business sense.

 Universal basic income

 What is society and our profession planning to do about these challenges? How can we help those left behind by globalisation; is the concept of a basic income a solution? In the last 10 years we have seen an increased debate globally. Our paper by Malcolm Torry, Director of Citizen’s Income Trust, considers the feasibility of introducing a universal citizens income in the UK and explores four different methods of implementation. It is the latest publication in our Outside Insights series, which gives alternative opinions a platform. With the increase in technology and AI, social and economic policy can no longer be conceived separately, and basic income is increasingly viewed as one viable way of reconciling two of their respective central objectives: poverty relief and full employment.