PM 'breaks promise' over 'workers on company boards' plan
Theresa May has been accused of breaking a promise to British workers after ruling out imposing the appointment of employees to company boards.
The Prime Minister offered an olive branch to businesses who were concerned about the proposals but unions reacted angrily to the announcement.
Mrs May told business organisation the CBI that she wanted a partnership with firms as part of a "great national effort" - but warned that a minority of rogue bosses had damaged public opinion of the corporate world.
The Prime Minister said the Government was preparing to take action to tackle problems with executive pay and accountability and would ensure employees have a "voice" in the boardroom - but promised to "work with the grain of business" on the reforms.
Proposals will be set out in a Government Green Paper kicking off a period of consultation later this autumn. But Mrs May told the CBI conference in central London: "I can categorically tell you that this is not about mandating works councils, or the direct appointment of workers or trade union representatives on boards."
While those measures could be appropriate for some firms, others could continue to use existing board structures "complemented or supplemented by advisory councils or panels" to ensure that workers are represented.
Mrs May's comments appeared to represent a step backwards from her promise at the Conservative Party conference in Birmingham last month, when she said she planned to have "not just consumers represented on company boards, but workers as well".
But speaking on a visit to Cambridge after her CBI address, Mrs May denied she had watered down her pledge: "No, what I've always said is that we want to look at ways in which we can improve corporate governance, looking at a number of areas including workers' representation on boards.
"You can do that in a number of ways. We want to work with business on this, and that's why we'll be consulting later this year on the various ways in which we can do it to find a model that works."
GMB general secretary Tim Roache said: "The mask is slipping - nice speeches followed by broken promises will not help working people get fairness and dignity in the workplace."
Mrs May used her keynote address at the CBI, just two days ahead of Philip Hammond's Autumn Statement, to set out a range of business-friendly plans, including her ambition to ensure the UK has the lowest corporate tax rates in the G20 group of advanced economies and measures to boost productivity.
Following the rise in anti-establishment and anti-globalisation movements across the West, Mrs May said she would defend capitalism and free trade, but warned that the image of business had been "bruised" by poor behaviour from "a limited few" bosses.
She said the vote for Brexit reflected not only a desire to leave the EU but also a public demand for "change" in the way capitalism and the market system operate in the UK.
"If we support free markets, value capitalism and back business - and we do - we must do everything we can to keep faith with them," she said. "And with not enough people feeling that they share in the wealth created by capitalism - and with the recent behaviour of a small minority of businesses and business leaders undermining the reputation of the corporate world as a whole - the way to keep that faith is to embrace reform."
She added that when some bosses "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".
The PM's aim to keep UK corporation tax lower than its international rivals may mean going beyond the cut from the current 20% rate to 17% by 2020 already announced by former chancellor George Osborne, as US President-elect Donald Trump has said that he will slash the equivalent tax in America to just 15%.
Mrs May also said she aimed to deliver "a tax system that is profoundly pro-innovation".
The Autumn Statement would set out an agenda that is "ambitious for business and ambitious for Britain", including a £2 billion-a-year boost to investment in science and technology with a new Industrial Strategy Challenge Fund directing money towards priority technologies.
Mr Hammond will set out how the Government will take "big decisions" to invest in infrastructure, as well as continuing the work of reining in the deficit and supporting Bank of England efforts to support the economy, she said.
And she confirmed that the Government will set out its proposals for a "proper industrial strategy" in a green paper later this year, followed by legislative plans in a white paper early in 2017.
Mrs May announced the launch of a Patient Capital Review, chaired by Sir Damon Buffini, to help innovative firms get the long-term investment they need to transform breakthrough ideas into sustainable businesses. And she said that the Government was launching a review of its Small Business Research Initiative under Cambridge entrepreneur David Connell to ensure it does more to give innovators their first break.
In his address to the CBI, Labour leader Jeremy Corbyn said: "The Prime Minister's suggestion that Britain should chase after Donald Trump in a race to the bottom on corporation tax - to 15% or below - I think is reckless and short-term grandstanding."
He added: "We need to see genuine employee representation at board level, which the Prime Minister promised but I see she is apparently already backing away from it."