Prime Minister Theresa May has indicated she favours introducing further research and development (R&D) tax breaks in a bid to make Britain the go-to place for innovators and investors
May is due to outline the first steps of the government’s new industrial strategy in her first speech to the CBI annual conference later today.
She will say the government is to launch a review of current R&D tax incentives ‘to ensure the global competitiveness of the UK as a home for scientists, innovators and tech investors’.
In the speech, May will say the government’s business and tax reforms since 2010 have delivered one of the most competitive corporate tax regimes in the world by cutting corporation tax and increasing R&D tax credits, from £1bn to almost £2.5bn a year.
Research shows each £1 spent on R&D tax credits stimulates between £1.53 and £2.35 of additional investment in the UK, May will tell her audience.
Other commitments to be announced as part of the strategy include an additional £2bn per year in government investment by 2020 for R&D, and the creation of a new industrial strategy challenge fund to back priority technologies - such as robotics and biotechnology - where the UK has the potential to turn strengths in research into a global industrial and commercial lead.
May will say: ‘It is a new way of thinking for government – a new approach. It is about government stepping up, not stepping back, building on our strengths, and helping Britain overcome the long-standing challenges in our economy that have held us back for too long.’
May is also using her speech to business leaders reiterate the need to improve the reputation of business. Looking ahead to the government’s upcoming green paper on corporate governance, the prime minister will say: ‘This will be a genuine consultation – we want to work with the grain of business and to draw from what works. But it will also be a consultation that will deliver results.’