The Prime Minister’s Vision for Business

The Prime Minister has today set out her vision for UK business at the CBI Annual Conference, highlighting an additional £2bn per year for R&D by the end of this Parliament and confirming an Industrial Strategy Green Paper will be published before the end of the year.

You can read a copy of the Prime Minister’s speech here.

Main announcements:

  • A modern industrial strategy will get the economy firing on all cylinders, back Britain’s strengths in areas such as science and innovation (in her speech she said we compete with the best in aerospace), and tackle longstanding problems like low levels of productivity and the historic imbalance towards London and the south-east. A Green Paper will be published before the end of the year to seek views before a White Paper is issued early in the new year.
  • In Autumn Statement will commit to investing an extra £2bn in R&D per year by 2020 to help put post-Brexit Britain at the cutting edge of science and tech.
  • A new Industrial Strategy Challenge Fund, overseen by UKRI, will direct some of that investment to back priority technologies and address weaknesses in commercialisation. Government will consult on how the fund can best support emerging fields (incl e.g. satellites) where the UK has a proven scientific strength and there is a significant economic opportunity for commercialisation.
  • Announced HMT review of the support given to innovative firms through the tax system looking at the UK’s global competitiveness to see if this support can be even more effective. The PM set out her “aim is not simply for the UK to have the lowest corporate tax rate in the G20, but also one that is profoundly pro-innovation”. HMG highlighted research showing each £1 spent on R&D tax credits stimulates between £1.53 and £2.35 of additional investment in the UK.
  • Start-ups to scale-ups: Will launch HMT-led  Patient Capital Review, chaired by Sir Damon Buffini, to examine how break down obstacles to getting long-term investment into innovative firms. David Connell will review the government’s Small Business Research Initiative to look at increasing its impact and giving more innovators their first break.

 Corporate governance:

The PM also made clear she will ask British business to work with her: “helping to shape this new approach, setting the template for others to follow, and calling out what is bad in order to promote what is just and good.”

  • Publish Corporate Governance Green Paper for consultation later this autumn that addresses executive pay and accountability to shareholders, and ensures the employee voice is heard in the boardroom.
  • Called for voluntary improvements in practice – e.g. representation of women on company boards and in senior positions and broadening diversity.
  • Seeking to establish the best corporate governance of any major economy and important voices of workers and consumers should be represented – but not mandating works councils or direct appointments of workers or trade union representatives on Boards; question of finding the model that works.