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[...] We believe in capitalism – the means by which we drive economic growth, putting people into work to provide for their families.
And we believe in business – the entrepreneurs and the innovators who employ millions of people up and down this country – the basis for our prosperity.
The government I lead will always believe in these things.
But I am here today not just to reaffirm these core beliefs, but to say that – if this is what we value – we need to be prepared to adapt and change.
For if we support free markets, value capitalism and back business – and we do – we must do everything we can to keep faith with them.
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.
[...]
Leaving the European Union
I know that leaving the European Union creates uncertainty for business. I know that some are unsure about the road ahead or what your future operating environment will look like. And there will certainly be challenges – a negotiation like the one on which we are about to embark cannot be done quickly, or without give and take on both sides.
But there are opportunities too. Opportunities to get out into the world and do new business with old allies and new partners. To use the freedoms that come from negotiating with partners directly, to be flexible, to set our own rules and forge new and dynamic trading agreements that work for the whole UK. Opportunities to become the true global champion of free trade.
And opportunities to demonstrate how a free, flexible, ambitious country like Britain can trade freely with others according to what’s in their own best interests and those of their people.
That is our aim and our ambition. And I am ambitious for Britain.
I believe that if we approach the difficult negotiations to come in the right way, with the right spirit, we can strike a deal that’s right for Britain and right for the rest of Europe too.
And the right approach is not to rush ahead without doing the ground work, but to take the time to get our negotiating position clear before we proceed. It’s not to seek to replicate the deal that any other country has, but to craft a new arrangement that’s right for us and right for Europe – recognising that a strong EU is good for Britain. It’s not to provide a running commentary on every twist and turn, but to acknowledge that businesses and others need some clarity – so where I can set out our plans without prejudicing the negotiation to come, I will.
That’s why I have been able to set out the timetable for triggering Article 50 – before the end of March next year. Why I want an early agreement on the status of UK nationals in Europe and EU nationals here, so that you and they can plan with certainty. And why we have been engaging heavily with businesses over the past few months to understand your priorities and concerns, and why we will continue to do so.
A modern industrial strategy
[...] Our strengths are clear. We are an open, competitive, trading economy. We compete with the best in autos, aerospace and advanced engineering. We are breaking new ground in life sciences and new fields like robotics, artificial intelligence, and quantum computing. We are leaders in global professional services from architecture to accountancy from law to consulting.
We’ve world beating universities and the highest research productivity of the top research nations. We have a vibrant creative industry, producing an extraordinary level of talent recognised and respected the world over. And of course we’re leaders in global finance – not just banking, but investment management and insurance too.
But as we celebrate these strengths, so we should also be frank about some of our weaknesses.
We have more Nobel Laureates than any country outside the United States, but all too often great ideas developed here end up being commercialised elsewhere.
We are home to one of the world’s financial capitals, but too frequently fast-growing firms can’t get the patient long-term capital investment they require, and have to sell-out to overseas investors to access the finance they need.
We have truly world class sectors and firms, but overall business and government investment remains lower than our competitors.
We have outstanding firms and clusters in every part of this country, but taken as a whole our economic success is still too unbalanced and focused on London and the south east.
We have gold-standard universities, but we are not strong enough in STEMsubjects, and our technical education isn’t good enough.
And while the UK’s recovery since the financial crisis has been one of the strongest in the G7, our productivity is still too low. But if we want to increase our overall prosperity, if we want more people to share in that prosperity, if we want bigger real wages for people, if we want more opportunities for young people to get on, we have to improve the productivity of our economy.
So these are the long-term, structural challenges the Industrial Strategy aims to address. It is not about propping up failing industries or picking winners, but creating the conditions where winners can emerge and grow. It is about backing those winners all the way to encourage them to invest in the long-term future of Britain. And about delivering jobs and economic growth to every community and corner of the country.
That is the ambition – and we need your help to put it into practice. We cannot create a proper industrial strategy without listening to industry and we want to work with you and shape it together. So we will publish a green paper before the end of the year to seek your views before issuing a white paper early in the new year.
Research and development
[...] So in the Autumn Statement on Wednesday, we will commit to substantial real terms increases in government investment in R&D – investing an extra £2 billion a year by the end of this Parliament to help put post-Brexit Britain at the cutting edge of science and tech.
A new Industrial Strategy Challenge Fund will direct some of that investment to scientific research and the development of a number of priority technologies in particular, helping to address Britain’s historic weakness on commercialisation and turning our world-leading research into long-term success.
And we will also review the support we give innovative firms through the tax system.
Since 2010 we have made the Research and Development Credit more generous and easier to use – and support has risen from £1 billion to almost £2.5 billion a year.
Now we want to go further, and look at how we can make our support even more effective – because my aim is not simply for the UK to have the lowest corporate tax rate in the G20, but also a tax system that is profoundly pro-innovation.
[...] I want us to turn our bright start-ups into successful scale-ups by backing them for the long-term. To do this we need to better understand where the barriers are, so I am pleased to announce we will launch a new Patient Capital Review – led by the Treasury – that will examine how we can break down the obstacles to getting long-term investment into innovative firms. The review will be supported by a panel of experts, and I am pleased to announce that Sir Damon Buffini has agreed to chair that panel. [...]
So I can announce today that we will review our Small Business Research Initiative and look at how we can increase its impact and give more innovators their first break. And that Cambridge entrepreneur David Connell will lead the review and report back next year. [...]
Reforming corporate governance
[...] we will shortly publish our plans to reform corporate governance, including executive pay and accountability to shareholders, and proposals to ensure the voice of employees is heard in the boardroom.
The UK rightly has a strong reputation for corporate governance – the Cadbury, Greenbury and other reforms, built on the strong foundations of the Companies Act and the Corporate Governance Code, have made the UK a prime location for listing and headquartering. [...]
So there will be a green paper later this autumn that addresses executive pay and accountability to shareholders, and how we can ensure the employee voice is heard in the boardroom. [...]