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Theresa May backtracks over workers on boards pledge Theresa May bids to reassure business on Brexit 'cliff-edge'
(35 minutes later)
Theresa May has backed away from a pledge to require companies to put worker representatives on boards. Theresa May has tried to reassure businesses fearing a sudden change in rules once the UK leaves the EU.
Speaking to the CBI's annual conference, Mrs May said firms would not be forced to adopt the controversial proposal. Speaking at the CBI conference, Mrs May promised early agreement on the status of UK nationals in Europe and EU nationals in the UK.
"This is not about mandating works councils, or the direct appointment of workers or trade union representatives on boards," she said. "People don't want a cliff-edge; they want to know with some certainty how things are going to go," she said.
Mrs May's pledge had met with a cool response from business lobby groups. Several business lobby groups have pushed for an interim deal to let them trade in the same way post-Brexit.
Mrs May said she understood companies' concerns and was "conscious that there will be issues that will need to be looked at".
"That will be part of the work that we do in terms of the negotiation that we are undertaking with the European Union," she added.
She also pledged to provide clarity on the government's plans where possible, but said there would not be "a running commentary on every twist and turn".
Downing Street declined to say whether Mrs May's comments about avoiding a "cliff-edge" meant she was seeking a transitional deal to cover the period between the UK's departure from the EU and the start of a new trade deal.
"She was reflecting the views we have expressed already about how we secure the best deal for the UK and how we seek to provide certainty where we can to businesses and people across the UK of the steps moving forward," the PM's official spokeswoman said.
In the wide-ranging speech, Mrs May also pledged to:
Workers on boards?
The prime minister also appeared to back away from a pledge to require companies to put worker representatives on boards, saying firms would not be forced to adopt the controversial proposal.
The prime minister said there were "other routes" that used existing board structures, but supplemented by advisory councils or panels.The prime minister said there were "other routes" that used existing board structures, but supplemented by advisory councils or panels.
"It will be a question of finding the model that works," she said."It will be a question of finding the model that works," she said.
Mrs May promised to shake-up corporate governance as part of her Conservative Party leadership campaign in July, and repeated the promise at last month's party conference when she said she planned to have "not just consumers represented on company boards, but workers as well".Mrs May promised to shake-up corporate governance as part of her Conservative Party leadership campaign in July, and repeated the promise at last month's party conference when she said she planned to have "not just consumers represented on company boards, but workers as well".
In the wide-ranging speech, Mrs May also pledged to: Despite widespread reports that the PM had backtracked on putting workers on boards, a Number 10 spokesman insisted that Mrs May had never committed to this. Her speech provided "clarification", he said.
'Clear promise''Clear promise'
Asked if she had dropped plans for the direct appointment of workers on boards, Mrs May said she had "clarified" that "we want workers' representation on boards", but "there are a number of ways in which that can be achieved". However, trade unions said they were disappointed by Mrs May's remarks.
She said the government would soon publish its plans to reform corporate governance, which would cover firms' accountability to shareholders, executive pay as well as proposals to ensure employees' voices were heard.
Trade unions said they were disappointed by Mrs May's decision.
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.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.""This is not the way to show that you want to govern for ordinary working people."
But CBI director-general Carolyn Fairbairn said "different approaches will work for different businesses" on employee engagement.But CBI director-general Carolyn Fairbairn said "different approaches will work for different businesses" on employee engagement.
"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.""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."
What is the Autumn Statement?What is the Autumn Statement?
A difficult trick to pull offA difficult trick to pull off
Views from UK businessViews from UK business
Financial upheaval ahead for familiesFinancial upheaval ahead for families
In her speech to business leaders, Mrs May also promised to boost productivity and cut corporation tax in exchange for help from businesses in tackling issues such as executive pay and shareholder accountability. Mrs May also promised to boost productivity and cut corporation tax in exchange for help from businesses in tackling issues such as executive pay and shareholder accountability.
"Just as the government must open its mind to a new approach, so the business community must too," she said."Just as the government must open its mind to a new approach, so the business community must too," she said.
The promises made by the prime minister include a "patient capital review" to help firms secure long-term investment. The review will be chaired by Sir Damon Buffini, the former head of private equity group Permira.The promises made by the prime minister include a "patient capital review" to help firms secure long-term investment. The review will be chaired by Sir Damon Buffini, the former head of private equity group Permira.
Mrs May also said the government would review the support given to 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."Mrs May also said the government would review the support given to 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.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. Labour leader Jeremy Corbyn, who will speak at the CBI later, will warn against a "mishandled, chaotic Brexit".
David Connell, a Cambridge entrepreneur, has been appointed to review the government's Small Business Research Initiative, aimed at helping more small firms grow.
Investment bank
Mrs May also indicated that the government will seek a transitional Brexit deal when negotiations with the EU begin in order to avoid the "cliff edge" that businesses fear.
She said the government would not provide "a running commentary on every twist and turn", but promised early agreement on the status of UK nationals in Europe and EU nationals in the UK.
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 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".