Theresa May wants post-Brexit UK at ‘cutting-edge’

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Theresa May is to reach out to business leaders by pledging an extra £2bn a year in funding for scientific research and development by 2020.

In a speech to the CBI, Mrs May will outline a new fund that will back areas such as robotics and biotechnology and help commercialise new discoveries.

The investment will help put post-Brexit Britain at the “cutting edge”, the prime minister is to say.

Delegates will call on Mrs May to offer more “clarity” over Brexit.

Mrs May’s speech to the Confederation of British Industry in London comes two days before the government delivers its first post-EU referendum budget, in the form of the Autumn Statement.

She is to promise a new approach that is about “stepping up, not stepping back” when it comes to intervening in the economy.

Speaking about a new industrial strategy challenge fund, she will say: “Britain has firms and researchers leading in some of the most exciting fields of human discovery.

“We need to back them and turn research strengths into commercial success.”

Mrs May is expected to add: “We will also review the support we give innovative firms through the tax system… because my 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.”

Corporation tax is already due to fall from its current 20% rate to 17% by 2020.

In the US, president-elect Donald Trump said during his campaign he would seek to cut the federal rate to 15%, but it is understood the Treasury still thinks the UK would be more competitive, once extra US taxes are factored in.

Following a speech earlier in the year in which Mrs May called for workers to be put on the boards of major firms and vowed to curb excess corporate pay, the prime minister will insist in her speech that she will “always believe in business”.

But she will say firms need to do “more to spread those benefits around the country, playing by the same rules as everyone else when it comes to tax and behaviour, and investing in Britain for the long-term”.

‘No man’s land’

In his speech, CBI president Paul Drechsler, representing what is Britain’s largest employers’ group, will say businesses are committed to making the best of Brexit but there is a need for “clarity and – above all – a plan”.

“Today, businesses are inevitably considering the cliff-edge scenario – a sudden and overnight transformation in trading conditions.

“If this happens, firms could find themselves stranded in a regulatory no man’s land,” he will say.

That could cause practical difficulties at ports, airports, and logistics firms if different paperwork is suddenly needed, he will warn.

Labour leader Jeremy Corbyn, who will also be speaking to the CBI, will warn against a “mishandled, chaotic Brexit”.

He will also call for a more interventionist role for government in industrial policy.

He will expand on Labour’s proposal for a national investment bank, which he will argue would “help break the logjam in the British financial system” by lending to small and medium-sized businesses.

He will argue industrial strategy should not be about “picking winners” but should “set the missions, put in place the right institutional framework and support and provide businesses with the opportunities to develop our economy”.

 

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