Theresa May bids to reassure business on Brexit 'cliff-edge'

Theresa May has tried to reassure businesses fearing a sudden change in rules once the UK leaves the EU.

Speaking at the CBI conference, Mrs May promised early agreement on the status of UK nationals in Europe and EU nationals in the UK.

"People don't want a cliff-edge; they want to know with some certainty how things are going to go," she said.

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:

• Invest £2bn annually in research and development by 2020
• Launch an Industrial Strategy aimed at spreading economic growth across the UK
• Examine how innovative firms can get long-term investment with a "Patient Capital Review"
• Launch a small business research initiative looking at how more innovators can get their first break
• Consult on plans to reform corporate governance, including executive pay and accountability to shareholders
• Deliver the "lowest corporation rate in the G20"

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.

"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".

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'

However, trade unions said they were disappointed by Mrs May's remarks.

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."

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."

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.

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."

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

Labour leader Jeremy Corbyn, who will speak at the CBI later, will warn against a "mishandled, chaotic Brexit".

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