PM promises businesses tax cut but cools on workers on boards plan

The PM has promised to cut business tax to the lowest level in the G20 but has come under fire for watering down plans to put workers on company boards.

In a bold pledge in her first speech to a CBI conference, Theresa May suggested the Government could cut corporation tax below the 15% promised by Donald Trump during his campaign.

However, she drew fire from the unions after appearing to cool on promises - made at the party conference last month and during her campaign to be prime minister - to put workers on the boards.

During the speech, Mrs May clarified her position, insisting the measure would not be about forcing companies to put workers on boards but about firms finding a "model that works for everyone" after a consultation.

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She (Munich: SOQ.MU - news) said plans would be set out at the end of the year.

In July, Mrs May promised: "If I'm prime minister, we're going to change that system - and we're going to have not just consumers represented on company boards, but workers as well..."

At the party conference last month she repeated the pledge, saying: "So later this year we will publish our plans to have not just consumers represented on company boards but workers as well..."

TUC General Secretary Frances O'Grady said: "Theresa May made a clear promise to have workers represented on company boards. The proposals in her speech do not deliver on this.

"This is not the way to show that you want to govern for ordinary working people."

General Secretary of the GMB Tim Roache said: "That the Prime Minister stood in front of big business today and watered down a pledge made just a few months ago shows us all we need to know."

Carolyn Fairbairn, CBI Director General, welcomed the consultation and said that "different approaches will work for different businesses"

She added that "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".

Mrs May's spokeswoman insisted this did not amount to a U-turn and said: "Look at what the PM has said the whole way through - this is about how do we ensure that workers, their views, are represented on boards.

"What she said today is consistent with that."

The Prime Minister also hinted at a transitional Brexit deal to avoid businesses falling off a "cliff edge" after the pro-EU CBI leadership called for an interim deal, with the UK remaining in the single market.

When asked about getting a transitional deal for the UK Mrs May said: "Obviously as we look at the negotiation we want to get the arrangement that is going to work best for the UK and the arrangement that is going to be best for business in the UK.

"And I'm conscious that there will be issues that need to be looked at."

Ahead of the Autumn Statement, Mrs May also announced that the £2bn of investment in science and research will be included in the Chancellor's offering on Wednesday.

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She said: "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."

In her speech, Mrs May promised an ambitious modern industrial strategy, with a new way of thinking for Government and new approach.

After her attacks on Mike Ashley and Sir Philip Green in her Tory conference speech, she also urged the CBI to help restore the reputation of business, which she said had been damaged by a small minority.

She said: "For when a small minority of businesses and business figures appear to game the system and work to a different set of rules, we have to recognise that the social contract between business and society fails - and the reputation of business as a whole is undermined.

"So just as a Goverment must open its mind to a new approach, so the business community must too."

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Later on Wednesday, Jeremy Corbyn will tell the CBI a Labour government would aim to re-create Harold Wilson's "white heat of technology" of the 1960s.

It is likely he will crticise Mrs May's cooling on the idea of workers on the boards framing it as a U-turn on her earlier pledges.

In his speech, Mr Corbyn will also promise intervention from Labour, as well as warning of the threat to the future growth and prosperity of the UK from a "mishandled, chaotic Brexit".

And he will say: "In 1963, Harold Wilson famously said if the country was to prosper, a 'New Britain' would need to be forged in the white heat of a scientific revolution."

The Labour leader, who this year revealed he has been reading Wilson (Oslo: WILS.OL - news) 's memoirs, is referring to the "white heat of technology" speech at the 1963 Labour conference, shortly before he became prime minister.

"More than 50 years later, we now face the task of creating a New Britain not just out of Brexit and a new relationship with Europe but from the challenge of the fourth industrial revolution - powered by the internet of things and big data to develop cyber physical systems and smart factories," Mr Corbyn will say.

"Labour wants to engage with business and the workforce at all levels to design an industrial strategy that meets the needs of 21st century Britain."

:: Full coverage of the Chancellor's Autumn Statement on Sky News on Wednesday from 10am