Theresa May has placed the UK front and centre of the world stage for innovation with her promise to invest £2bn ($2.7bn) per year by 2020 in research and development funding, according to the Confederation of Business Industry (CBI).

"Businesses around the UK will strongly welcome a progressive partnership between industry and government, who together can build a modern industrial strategy tailored to the UK's great strengths," said Carolyn Fairbairn, the CBI's director-general.

The praise comes after the UK prime minister spoke at the business body's annual conference in central London on Monday (21 November).

The Conservative premier also promised to keep Britain's corporation tax at the lowest rate among the G20 economies.

The levy is set to fall from 20% to 17% by 2020, but President-elect Donald Trump promised to slash the US rate from 40% to 15%. A move which could see the UK follow suit.

But May also challenged British companies to reform their corporate governance practices, warning that the public could lose their faith in capitalism unless changes are made.

"UK corporate governance is admired across the world. Our businesses know that brilliant employee engagement, openness with customers and support for local communities are essential to success," Fairbairn said.

corporate tax rates around the world

"But firms recognise public concerns. The challenge now it to take the great practice that we see in so many places and apply it everywhere, eradicating the unacceptable transgressions that some companies do make."

The prime minister's flagship proposal is to have workers and consumers on company boards. May had suggested businesses would be forced to have employees on its boards, but she softened her language on Monday.

"While it is important that workers and consumers should be represented, I can categorically tell you that this is not about mandating work councils, or the direct appointment of workers or trade union representatives on boards," she said.

CBI 2016
British Prime Minister Theresa May addresses delegates at the annual Confederation of British Industry (CBI) conference in London Justin Tallis/ AFP

The government will table a green paper on the plan and consult with businesses from Autumn this year.

May, meanwhile, again ruled out offering a "running commentary" on her government's negotiations with the EU. But the prime minister did promise to offer businesses "clarity" on the talks, just minutes after the CBI's president Paul Drechsler called for such a move.

Fairbairn said it was "vital" that the on-the-ground expertise of business is "used to help get the best deal for the UK. We welcome the prime minister's commitment to providing clarity on her negotiation plans, where possible."

Labour leader Jeremy Corbyn is also expected to address the business leaders ahead of Chancellor Philip Hammond's Autumn Statement on 23 November.


- This article was altered to reflect the total corporate tax rate in the United States that stands at 40%, according to KPMG figures.