May unveils spending on technology
Prime Minister Theresa May pledged to invest £2 billion in research and technology and set out an ambition to cut corporation taxes further when she addressed business leaders at the CBI annual conference.
Mrs May revealed the outline of an industrial strategy that aims to make Britain the most competitive country in the world.
In a speech designed to bolster confidence at a time of uncertainty over the Brexit decision, the Prime Minister toned down plans to put workers on company boards.
In return, Mrs May told business leaders that they needed to keep up their own investment, embrace corporate governance reforms and help spread prosperity across the country.
Slashing the key business tax is seen as a way of luring and retaining companies warning that they may leave Britain following the decision to sever ties with the European Union.
She demanded that business shows greater responsibility and repeat her pledge to curb excessive pay.
“The reputation of business as a whole has been bruised,” Mrs May said, quoting research showing only 35% of low income workers trust business. “The behaviour of a limited few has damaged the reputation of the many. And fair or not, it is clear that something has to change.”
Outlining her plans she said: “Our modern Industrial Strategy will be ambitious for business and ambitious for Britain.
“It is not about propping up failing industries or picking winners, but creating the conditions where winners can emerge and grow.
“It is about backing those winners all the way, to encourage them to invest in the long-term future of Britain. And about delivering jobs and economic growth to every community and corner of the country.”
Mrs May unveiled an Industrial Strategy Challenge Fund to back priority technologies such as robotics and biotechnology.
There will be a review of research and development tax incentives.
Mrs May is keen to encourage investment at a time when economists are forecasting a sharp slowdown in growth.
On the key Brexit issue she said: “People don’t want a cliff edge; they want to know with some certainty how things are going to go.”
Carolyn Fairbairn, CBI Director-General (right), said: “The Prime Minister has laid out an ambitious and inclusive vision for the economy, placing the UK front and centre of the world stage for innovation. Alongside her backing for free, fair and open markets this will be a powerful catalyst for investment.
“Businesses around the UK will strongly welcome a progressive partnership between industry and government, who together can build a modern industrial strategy tailored to the UK’s great strengths. As well as the focus on science and innovation, this must be underpinned by the other key growth enablers including skills, education and infrastructure, which will help to increase productivity and spread prosperity across the whole country.
“Business will rise to this challenge by driving forward the UK’s economy and renewing the social contract: the irresponsible behaviour of the few can no longer be allowed to tarnish the reputation and the contribution of the many.”
On the importance of innovation investment, Ms Fairbairn said: “The UK is home to world-class science and research and hundreds of innovative companies, but we need to do better at turning our new ideas into commercial successes.
“The substantial funding increase for R&D will make sure the UK remains a world leader in innovation and sends out an important signal to global investors. A first priority for this new investment should be Innovate UK, which has an excellent track record in stimulating business innovation but is currently underfunded relative to its international peers.
“The creation of a new Challenge Fund will embed research and innovation at the heart of the Government’s industrial strategy. Business will have an important role to play in outlining the challenges and working with UKRI to coordinate different parts of the innovation ecosystem to meet them.”
On corporate governance, Ms Fairbairn said: “UK corporate governance is admired across the world. Our businesses know that brilliant employee engagement, openness with customers and support for local communities are essential to success.
“But firms recognise public concerns. The challenge now is to take the great practice that we see in so many places and apply it everywhere, eradicating the unacceptable transgressions that some companies do make.
“On employee engagement, different approaches will work for different businesses but a starting point is firms being able to outline and explain what approach they are taking – whether that’s employees on boards, employee committees, dedicated representatives, or other models that genuinely address the issue.”
On the EU, she said: “The way in which we leave the EU and on what terms will be critical to jobs and investment here in the UK. It’s vital that the on-the-ground expertise of business is used to help get the best deal for the UK and we welcome the Prime Minister’s commitment to providing clarity on her negotiation plans, where possible.
“With only two years for such a complex negotiation, the Government rightly has on its radar that we should seek a smooth transition which gives firms time to adapt.”
Chancellor Philip Hammond has ruled out a significant increase in public spending because of what he described as “eye-wateringly” high public debt levels.
However, he is expected to announce more spending on infrastructure, including the road network, in his Autumn Statement.